Fairfax Media and News Corp say they’ve dismissed a proposal by their hired business advisor Deloitte to close five newspaper printing plants across NSW, Victoria and Queensland.
Print21 has seen a draft copy of a confidential 18-page document titled Project Rain, prepared by Deloitte Consulting in January 2018, which outlines a range of consolidation options including five site closures over the next two years. Under a plan that would reshape the local newspaper publishing landscape, Fairfax plants at North Richmond and Beresfield in NSW would be shut down and consolidated into News' Chullora, and News Corp’s Port Melbourne print site, located on valuable real estate land, would be folded into Fairfax Ballarat. Another proposal is the closure of both News Corp’s Murarrie site in Brisbane and its Warwick plant in south-east Queensland.
The consolidation would consist of closing five sites across NSW, VIC and QLD and setting printing agreements in each state, says the Deloitte report.
There are two options outlined for News Corp’s Queensland business. Murarrie in Brisbane, which prints the Courier Mail, would close in December, with the publishing operation transferred to News’ Yandina site and Fairfax's plant at Ormiston. A second option would consolidate Fairfax Ormiston into an expanded Murarrie. “Two options available and decision required,” says Deloitte in a note.
Between 300-400 print workers would be made redundant under the plan, according to an industry source.
In what's described as a 'theoretical best case scenario,' the report proposed beginning extension work at Fairfax Ballarat VIC and at News Corp’s Yandina QLD in March 2018.
Approached for comment, the companies issued similar statements dismissing the Deloitte proposal as 'redundant.'
“Deloitte assisted Fairfax and News Corp with some scoping work around printing options,” said a Fairfax Media spokesperson. “Both companies have previously announced to the market that we have been exploring options around printing. The plans and assumptions outlined in the document are completely redundant and were found not to be feasible. Fairfax and News continue to have productive discussions around printing options.”
A News Corp spokesperson said: "The document you refer to is a redundant scoping document and none of the material it contains is of any relevance today."
The unions are less than convinced. “It seems strange that they would pay a lot of money to a company like Deloitte to prepare a report and then put it on the scrapheap," says the AMWU’s national print division secretary, Lorraine Cassin.
The AMWU will meet with senior management at News Corp next month to discuss the consolidation plans. “There’s all sorts of rumours out there about what they’re looking at and what sort of collaboration will be taking place, which is affecting the morale of our members," says Cassin. "We don’t want to be blindsided by an announcement and what we’re saying to the companies is: be transparent, let’s deal with this together.”
Fairfax and News Corp have been talking for some time about sharing print facilities and collaborating on newspaper distribution in Australia. In February, Fairfax appointed a team of advisers to pursue ‘deeper strategic opportunities’ with News after posting a 54 percent fall in net profit to $38.5m in the first six months.
“We expect greater industry cooperation will deliver significant benefits,” Fairfax chief executive Greg Hywood told the ASX at the time. “We have progressed our recent positive discussions with News Corp Australia to seek industry-wide efficiencies in printing and distribution. We have had successful collaborations around shared trucking and printing titles for News in Queensland. Building on this collaboration, we have appointed advisers to pursue deeper strategic opportunities.”