Bucking the Consolidation Trend

A handful of investors, including myself, have decided to reverse the consolidation of five printing plants absorbed by Quebecor World through acquisition. Those plants include: Acme Printing Co., Wilmington, MA; Central Florida Press, Orlando, FL; Packaging Graphics, Pawtucket, RI; Nova Marketing Services, St. Louis; and Premedia Services, Detroit. With annual revenue over $135 million and 600 employees, these facilities specialize in commercial printing, packaging, fulfillment and premedia services.

Quebecor World tried to integrate the companies by centralizing many functions. Because these companies serve five different business markets within commercial printing, we believe refocusing them on their core business will restore their past success as private companies.

The first step in Matlet Group's buyout of these firms is to restore the operations' management teams back to their former local ownership. We're giving the reins back to those individuals responsible for the firms' initial success. The Matlet Group will provide purchasing power to the entire group in areas such as benefits, key supplies, etc., along with handling financial reporting requirements to lenders.

Each plant has a president and senior management team that has familiar and long-standing relationships with customers and suppliers. Near-term plans call for maintaining staff levels at each facility. We're actively recruiting additional sales representatives for all divisions and plan to add at least six to 10 positions across the various divisions.

While the staff at the plants acquired is a huge asset, it is clear we need to provide the people with improved systems, more and better training and improved quality-management systems. Employees need better tools to continue to produce the high-quality finished products—catalogs, brochures, inserts, blister cards, annual reports, menus, etc.—our customers expect.

Our immediate focus for the next 12 to 18 months will be to devote appropriate resources to support and rejuvenate the core business of each location. Major upgrades in technology, equipment and software are planned for each facility. This will involve capital investments of over $10 million on new equipment and upgrades for our pressrooms, binderies and finishing areas. We've already made a major capital purchase of an 8-color MAN Roland press, allowing us to network with our existing MAN Roland presses.

These first few months have made one thing abundantly clear: timely decision-making is valuable. Matlet Group's executive management team is small enough so that we are able to consider and execute strategic decisions quickly. This should translate into many improvements at each facility in the months and years to come.

Our return of local ownership means more than just the restoration of former managers and facility names. It entails a renewed sense of purpose to provide the highest quality products and services available in the industry and will serve as the core of our business strategy.

It is our belief these efforts will improve quality, price competitiveness and customer responsiveness at each facility. Only then can this endeavor be deemed a success.