Consolidation in B.C.'s commercial printing sector continued recently with Mitchell Press buying Teldon Media Group's printing operations for an undisclosed sum.
Commercial printers believe the transaction will make the sector more sustainable and reduce excess capacity. Every part of the commercial printing sector has been hit hard in recent years.
Commercial printers such as 11-year-old 3S Printers Inc. recently shut their doors and had their assets auctioned off. Paper merchants have not fared much better. For example, Xpedx closed its Canadian operations in Vancouver, Calgary and Edmonton at the end of 2011, and paper mill operator Catalyst Paper continues on life support thanks to creditors overwhelmingly voting to support a financial restructuring plan in late June.
"It's a right-sizing of the printing industry," Mitchell Press co-COO David Mitchell told Business in Vancouver July 3.
Metropolitan Fine Printers Inc. (MET) president Nikos Kallas agreed. He told BIV that each closure reduces the sector's capacity and increases its sustainability.
"Closings and bankruptcies have helped the market," he said.
"We're no longer seeing sales peaks and valleys where one month we do well and the next month we lose double what we'd made."
MET bought Larsen's Book Binding in May, in part to diversify its service offerings.
Mitchell Press' purchase, however, is a sad end for the Teldon printing division, which five years ago had great hopes and an uptick in business when Quebecor World closed its Marine Drive plant and laid off 170 staff.
Twenty-one Teldon staff will be hired at Mitchell Press, which will also buy a printing press used to produce large-run, full-colour magazines and move it from Teldon's Richmond facility to its Burnaby head office.
About 70 staff previously worked in Teldon's print division and more than 70% of those will remain employed.
Outside of the 21 who will work at Mitchell Press:
•four were offered jobs at Pacific Bindery Services;
•approximately 25 will be offered jobs in Teldon's marketing division; and
•approximately 20 have been laid off.
"We worked very hard to find everyone a position, but unfortunately that couldn't happen," said Teldon spokeswoman Jane Griffiths.
Mitchell Press launched in 1928 and is a third-generation family-run venture. In 2008 it moved from offices spread over six floors in Kitsilano to a facility in Burnaby. It will now be the only printer in the Lower Mainland capable of printing magazines on high-speed web presses.
Transcontinental Printing also provides the service, but it does the work out of Manitoba.
Transcontinental's only Vancouver presses are instead optimized to produce flyers and newspapers.
Teldon Media Group generated approximately $38.8 million in revenue in 2011; between $10 million and $20 million of that came from its printing division.
Teldon will continue to publish Alive Magazine and have a marketing division that produces calendars.
Mitchell Press last year generated more than $20 million in revenue, and Mitchell estimates that its Teldon acquisition will help the company increase sales by about 60% this year. •
