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Busy presses allow PMP to knock back low-margin work

Tuesday, 18 November 2008
By Print 21 Online Article

Five-month Coles WA contract was priced at below acceptable margins, says Brian Evans, ceo PMP.

Moving to hose down reports that PMP had lost a valuable catalogue printing contract to rival IPMG, he claimed the job’s pricing was simply unacceptable. “If I didn’t have full presses it might be different, but our volumes are 20 per cent higher than last year so we have to make commercial decisions about work that is unattractive,” he said, in explaining why he did not compete for the job.

“We do lots of work for all different Coles brands throughout the country and we value our relationship with them. This was a fairly small, short-term contract where the pricing was way below what we considered reasonable.”

The response comes as rivalry between the two web printing giants intensifies. Following the commissioning of the big MAN Roland heatset web presses last year, PMP won back much of the work lost during its troubled upgrade. This year it snatched one of the largest print runs in the business from Hannanprint, the valuable Ikea catalogue job. Industry sources speculate that the proposed IPMG Warwick Farm gravure plant is in part a strategy to reclaim the iconic contract.

Evans (pictured) speculated that the pricing on the Coles WA catalogue is based on a fairly optimistic view of the value of the Australian dollar next year. He points out that PMP is the largest buyer of paper in the country and as such is able to leverage its business to get the best price.
“It’s a volatile paper market at the moment. We hedge our prices as best we can and we like to think we get it right, but if you price it wrong you can lose a lot money,” he said. “Who knows what the prices will be in the New Year?”

He believes prices for print will stabilise and says PMP will continue to gauge the value add per tonne and knock back work that simply keeps the presses turning.

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