News Archives
March 2004

March 30, 2004
Transcontinental closures in Nova Scotia
HALIFAX—Transcontinental is closing two printing plants in Yarmouth and New Minas, Nova Scotia, that were acquired from Optipress this past January. The closures, to be carried out in the coming months, will eliminate about 93 jobs from the two communities. The company is adding approximately 40 jobs to the plant near Halifax, which was expanded last year, and says it plans to spend $3 million on new equipment at Nova Scotia plants as part of a reorganization within the province. Transcontinental says the laid-off employees are being offered the chance to relocate to the Halifax plant, pursue positions elsewhere in the company, or take severance packages or early retirement.

PLM’s fourth quarter results show ups and downs
MARKHAM, ON—Net income for PLM Group’s fourth quarter ended December, 2003, was $0.1 million compared with $1.7 million for the same period in 2002. However, sales in the fourth quarter increased 13% to $28.7 million compared to $25.4 million in the same period a year ago. The impact of recent acquisitions, Mailer Magic and Optium, increased sales, but also drove up selling and administrative expenses to $4.5 million from $2.4 million. PLM says it is cautiously optimistic about the company’s prospects for 2004. Although its new digital services and sales staff are poised to take advantage of opportunities in the coming months, management believes that results in the short term will be depressed compared to previous years as a result of market weakness and downward pricing on paper.

March 26, 2004
Budget a major disappointment for printing
OTTAWA—Tuesday’s Federal budget announcement was a major disappointment to the printing industry, which was expecting the accelerated depreciation provision to include computer-assisted manufacturing equipment, including CTP devices and digital presses. CPIA president Pierre Boucher said that the Ministry of Finance has almost 100% confirmed to him that only basic computers and other computer-related equipment, such as Internet and broadband, will be captured in the new measure. After years of lobbying, Boucher says the provision is a disappointment, but that on a positive note the provision says it is open to further measures in the future, meaning that there is pressure on the government to sit with the CPIA and other groups to work together at responding to the industry’s needs. “It’s a matter of helping the industry in Canada to be more productive, more creative and more competitive,” Boucher said. Jayson Myers, chief economist, Canadian Manufacturers and Exporters, was also expecting automated manufacturing equipment to be included in the change. He told PrintCan that he was hoping we would see the budget “actually making some very positive steps to bring depreciation rates into line not only with expected useful life of equipment, but into line with the tax treatment of major competitors in the United States.” As the provision stands now, computers can be written off at a rate of 45% of the undepreciated value, compared with the previous rate of 30%. The write-off for computer-related equipment will be increased to 30% of undepreciated value from 20%.

Remi Marcoux steps down as chief executive of Transcontinental
MONTREAL—Remi Marcoux, the highly regarded founder of Transcontinental Inc. has stepped down as chief executive. The responsibility will now fall to Luc Desjardins, 51, who has served as president and COO since May 2000. Before joining the company, Desjardins worked for ten years with Mail-Well. Marcoux will remain executive chairman and will also retain his controlling interest in Trancontinental. He bought Transcontinental with two former partners in 1975, which was a struggling printing plant at the time. Several Marcoux family members hold executive positions at the company, control 62% of the voting shares and own 15% of the equity.

March 22, 2004
Distinguished cabinet minister and adviser had beginnings in printing
OTTAWA—Mitchell Sharp, who had been a Liberal cabinet minister and an adviser to prime minister Jean Chretien, died on Friday, March 19 at the age of 92. Sharp had spent his last month in hospital with prostate cancer. During his almost 60-year career, he had served as foreign affairs minister, finance minister and government house leader. Many people may not know that his first peek at working life began in the printing industry. Sharp’s father worked as a printing-shop manager and editor of a weekly newspaper. To help support his family, in 1925, Sharp dropped out of school at 14 and worked as a printing plant messenger.

March 19, 2004
New ownership for DATA
BRAMPTON—PrintCan has learned that Workflow Management Inc., the Florida-based parent company of the DATA Group, is in the process of being sold to a private investment group. John Greenhough, former president of DATA says the company is anticipating the sale as a positive financial move for Workflow, which was affected by a slowdown in the envelope business after 9/11. A shareholders’ vote will take place on March 30. Greenhough predicts the sale will create more investment capital for DATA business in Canada. DATA, formerly Data Business Forms, is a provider of document management and print services. The company employs 1250 people and has annual sales of $210 million.

Transcontinental has disappointing first quarter
MONTREAL—Transcontinental’s first quarter earnings showed a 13% profit decrease. The company’s earnings fell to $26.4 million from $30.3 million in last year’s first quarter. The drop is being blamed on tough market conditions, currency exchange, an unexpected drop in auto advertising and a delay in book orders for its printing plants in Canada and Mexico. President Luc Desjardins told the Montreal Gazette that results in the first quarter were related to timing issues and that he’s confident the results will improve in the coming quarters. Despite the drop in earnings, the company maintained its full-year earnings guidance and boosted its annual dividend by 29%.

March 16, 2004
Major tax break for printing industry in the air
OTTAWA—The federal government is considering a tax change that will allow businesses to write off certain types of equipment more quickly. The new accelerated depreciation of equipment such as heavy machinery and computers will be a tax break for companies who invest in new equipment. For printers who were replacing equipment with the fast-changing pace of technology before they were able to write it off, the change will amount to some much-needed cash flow. Pierre Boucher, president of the CPIA, says the association has been lobbying for accelerated depreciation for several years and considers the change a major victory. A similar tax change was implemented last year in the U.S., which was good news for the American printing industry, but, according to Boucher, was causing an increasing gap between Canada and the U.S. in terms of appreciation. The changes to the Income Tax Act will be confirmed on March 23, when the budget is announced in Ottawa.

New Quebecor World CEO
MONTREAL—Pierre Karl Peladeau has been appointed president and CEO of Quebecor World, replacing Jean Neveu, who was serving as interim chief since March 2003. Peladeau, 42, is leaving his position as president and CEO of Quebecor Media for Quebecor World, but will remain head of parent company, Quebecor Inc. In 2003, Quebecor World, which prints Harry Potter books and Time magazine, had a net loss of $31.4 million and revenues of $6.39 billion. Peladeau’s history with Quebecor World includes running European printing operations from 1994 to 1997. As CEO of Quebecor Printing in 1999, he was responsible for the $2.7 billion acquisition of World Color Press, which doubled the size of the company.

March 12, 2004
Kodak plans to sell NexPress direct
ROCHESTER, NY—Eastman Kodak plans to run NexPress Solutions and Heidelberg Digital as a wholly owned subsidiary with a direct sales force, a Kodak spokesperson told PrintCan. The subsidiary is still to be named, and no name will be announced until after the deal receives regulatory approval, likely in early May. However, NexPress will have its own booth at drupa in May. Anthony Sanzio, director of corporate media relations at Kodak, says the company plans to offer employment to current Heidelberg employees, including sales reps, and will establish its own sales channel. Other possibilities may be explored in future, says Sanzio. Brian Ellis, director of marketing at Heidelberg Canada, says Heidelberg and Kodak have signed a transition business agreement, whereby Heidelberg will provide support and marketing services to Kodak for one year to ensure there’s an easy transition and continuity for customers.

Quebecor union campaign tension continues
MONTREAL—Quebecor World and Justice@Quebecor, a union-sponsored campaign for workplace justice have issued contradictory statements regarding the facilities in Covington, Tenn., and Corinth, Miss. According to the Justice@Quebecor website, Quebecor World employees alleged that the company refused to file workers’ compensation claims, retaliated against workers for filing compensation claims, failed to report injuries and discouraged workers from reporting injuries. Quebecor has issued a statement strongly denying the allegations and says that its practices meet all state standard and uses the services of leading insurance companies to manage workers’ compensation claims. The two sides also counter each other regarding the death of an employee at the company’s Clarksville, Tenn., plant who was crushed in a shrink-wrapping machine in 2002. The Justice@Quebecor website says a Tennessee OSHA investigation faulted Quebecor. However, Quebecor says that the OSHA investigation into the accident found the company not at fault.

March 8, 2004
Heidelberg sells digital and web divisions
HEIDELBERG, Germany—Heidelberg has announced that it has sold its digital division to Eastman Kodak and its web offset division to Goss International. The sale to Kodak covers 2,000 employees worldwide, the digital black-and-white business, Heidelberg’s 50% share of Nexpress Solutions in Rochester, New York, and its Nexpress operations in Kiel. Payment for the deal is based on a performance formula: if all sales goals are met over the next two years until December 31, 2005, Kodak will pay a maximum of US$150 million in cash. The deal with Goss has so far only been agreed to in principle and definitive terms are expected to be finalized over the next few weeks. The transaction includes Heidelberg’s commercial web and newspaper presses, and the web finishing business in the U.S. Nearly 2,100 employees in the U.S., France and the Netherlands will be transferred to Goss. Heidelberg will become a new shareholder of Goss International, holding just under 20% of the company’s shares. More details will be announced on PrintCan as they become available.

Aprinco changes to stay afloat
Scarborough, ON—As of late last week, Aprinco Book Bindery had shut down and will be operating as Aprinco & Company. The company will no longer be providing stitching and will source out folding requirements to Di-Cut Industries. Aprinco & Company will specialize in perfect binding, mechanical binding and cutting and will be moving to a new location in Scarborough in April. President, Ben Chung, said the closure was due to too much overhead. Approximately 20 employees were let go. The assets of Aprinco Book Bindery have been taken over by receiver, BDO Dunwoody.

March 5, 2004
Gandalf assets up for bid
TORONTO—Gandalf Graphics, a large-format Markham-based print shop that had annual sales of more than $25 million, has gone into bankruptcy. Receiver, Richter-Usher & Associates, was appointed mid-February and is accepting offers, whole or piecemeal, for the shop’s assets due on March 8. According to Gandalf vice president, Gordon Tamblyn, the bankruptcy was caused by one major client who couldn’t pay a substantial bill leaving the company unable to fulfill its own payments. An associated company to Gandalf, Adanac, a 40” sheet-fed shop which operates out of the same location, is not threatened by the closure. Tamblyn says that Adanac has hired some former employees of Gandalf on a contract basis.

Offset counterfeit operation busted
MONTREAL—Plates, negatives and two presses worth more than $45,000 were seized this week from a print shop in Dorval, QC suburb that was producing bogus U.S. money. According to the RCMP, the $3 million worth of fake $100 U.S. notes was made by skilled criminals using offset technology in the way real money is made as opposed to high-tech photocopiers, which many counterfeit operations use. The fake bills, produced in the print shop’s off-hours haven’t reportedly turned up on the streets yet. Three people were arrested after a joint investigation that the RCMP carried out with the U.S. Secret Service. The $100 dollar notes were missing just a fake serial number.

New Transcontinental company major direct mail contender
IVYLAND, PA—CC3, a direct marketing provider that was bought by Montreal-based Transcontinental last December, has officially changed its identity to Transcontinental CC3. The new entity’s combined operation, which include Transcontinental’s U.S. litho printing capabilities and a 95,000-sq.-ft. facility in Texas, make it one of the largest direct marketing services providers/printers in North America. The company is capable of printing more than 11 million litho printed forms and laser personalized letters per day.

March 2, 2004
Canada takes back the stamps
OTTAWA—Contracts to print Canadian postage stamps were recently awarded to two Canadian-based companies: Canadian Bank Note Company and Lowe-Martin Group. Controversy over the stamps being printed on U.S. soil was brought to the attention of Parliament by the CPIA in 2002 and 2003. Canada Post has since decided to not extend the existing contract with the American facility. The CPIA objected to the stamps being printed in the U.S. because it violated the NAFTA marking requirements, in which the country of origin must be indicated on the material. As well, the association said that stamps should be considered a heritage item and be printed in Canada. This past December the Canada Border Services Agency issued a ruling that the packaging of the stamps must indicate the country of origin.

Kinko’s pursues Toronto and beyond
TORONTO—Kinko’s has opened a new flagship store, the company’s tenth Toronto location. The shop, in the heart of the city’s financial district on Bay St., is targeting consumers, local market businesses and large corporations. The 3,834-sq.-ft. branch has 17 staff members and includes a closed-door commercial production centre, which caters to higher volumes and sensitive-business document production for commercial customers. The location will, of course, also include FedEx drop boxes, from Kinko’s parent company. The company’s director of sales and marketing said in a Globe and Mail article that Canada is one of Kinko’s prime expansion markets. The new Toronto store is Kinko’s 19th location in Canada with three additional branch openings planned for later in the year.

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