Headlines

Goss International has established a new direct sales and support organization in Brazil, which is the world's fifth largest country by geographical area and population (191,241,71). According to the company, over the past five years, printers and publishers in Brazil have ordered more than 100 new Goss printing units.

Headquartered in Sao Paulo, the new Goss International organization is responsible for the full range of Goss commercial and newspaper presses and print finishing systems. The group also manages Goss Lifetime Support aftermarket services, including parts, service and enhancement programs.

“This smooth transition to direct sales and support, with a strong continuity of personnel, streamlines processes and puts our customers in closer contact with our dedicated team in Latin America and throughout the world,” said Goss International CEO Jochen Meissner.

Vitor Dragone oversees the new Goss International organization in Brazil. Dragone, who has 20 years of experience in the graphic arts industry, was previously the director of web offset sales for Heidelberg do Brazil, formerly the agent for Goss products in the country. The Goss International team based at the new facility also includes many other former members of the Heidelberg do Brazil web offset staff. They are now directly connected with Goss International product development and manufacturing facilities in the United States, Europe and Asia; and with a staff of more than 300 people focused on the aftermarket Goss Lifetime Support services in the Americas.

Heidelberg, after announcing its new source of financing, published its financials for the first quarter of its financial year, which spans between April 1 to June 30.

While the company made a modest gain in incoming orders over the previous quarter (€550 million compared to €474 million), the numbers are more than 50 percent down from the same quarter in 2008, (which had sales of €1.151 billion).

"Our package of cost-cutting measures is proceeding according to plan," said Heidelberg CFO Dirk Kaliebe. "In the first three months of the financial year, we achieved a further reduction in personnel costs compared to the previous year, cut inventory levels, lowered research and development expenditure, and cut back significantly on investments. These savings contribute to compensating the impact falling sales are having on the result," he added.


Heidelberger Druckmaschinen AG has announced it has secured a credit line totalling €1.4 billion up until the middle of 2012. This is the finalization of the loan pledge by the German Federal and State Governments announced in June.

"Despite the difficult conditions on the financial markets, Heidelberg has succeeded in renegotiating its existing financing structure. The new financing framework will enable the company to bridge the period until the difficulties in securing loans within the financial system ease," stated Heidelberg CFO Dirk Kaliebe.

The financing package consists of three main components - a €300 million loan from the Special Program of the KfW (Reconstruction Loan Corporation) for large companies (with a 50 percent indemnity from the KfW to the banks), a €550 million loan supported by 90 percent guarantee pledges from the Federal Government and the States of Baden-Württemberg and Brandenburg, and a syndicated credit line from a consortium of banks, also for €550 million.

Heidelberg's German competitors, manroland and KBA, have both voiced concerns over this deal, and its potential to cause competitive imbalances in the press manufacturing sector.


Eastman Kodak released its second quarter results with a loss of US$191 million, as well as a 29 percent sales decline, when compared with the year-ago quarter. Sales in Kodak’s second quarter 2009 were US$1.8 billion (all figures in U.S. currency), compared with $2.485 billion in Q2 of 2008.

“We have every expectation that our cash flow pattern this year will mirror the pattern of previous years, with a sizable increase in cash generation in the second half of 2009,” said Antonio Perez, Chairman and Chief Executive Officer, Eastman Kodak. “During the second quarter we continued to execute on our strategy, with our consumer inkjet hardware and ink revenue growth significantly outpacing the market.” To that end, Perez pointed to the first sale of its Prosper S10 Imprinting System in July of this year, as well as a letter of intent from an unidentified customer to purchase a Prosper press.

Revenue from Kodak’s digital businesses totaled $1.173 billion, a 28 percent decline from $1.636 billion in the prior-year quarter, while revenue from its traditional business decreased 30 percent to $593 million. The company blamed these results on “industry-related declines” and “the negative impact on volumes related to the uncertainty of labour contract negotiations in the entertainment industry.”

During its second quarter, the Rochester-based company decreased “selling, general and administrative” expenses by 26 percent, as well as a 38 percent decrease in R&D expenses, which amounted to $84 million. Kodak held $1.132 billion in cash and cash equivalents as of June 30, 2009, while its debt level stood at $1.311 billion.

For its second quarter of 2008, Electronics For Imaging reported revenues of US$90.1 million, compared to US$143.8 million in the year ago quarter. In relating this significant quarter loss, the California-based company pointed to a delay in the commercial release of previously announced inkjet technologies.

“Our results reflect the continued challenges in our industry compounded by the delay in broad availability of our new line-up of inkjet printers. While our overall results are disappointing, we are pleased with the approximately 14 percent sequential growth in our inkjet business and the execution on our commitment to align spending with revenue, with operating expenses reduced by 22 percent year-over-year,” said Guy Gecht, CEO of EFI. “Despite the product delay, we remain very excited with the opportunities for our inkjet segment and the record number of industry-leading new products we plan to bring to market over the next several months.”


Domtar Corporation announced today that it is opening a market pulp sales office in Hong Kong, operating as Domtar Asia Limited, as of August 1, 2009. The company states the primary objective for the office is to provide direct sales and sales services to its current and future Chinese customers.

"By establishing a physical presence in Hong Kong, we are solidifying our commitment to a dynamic and growing Chinese pulp market," said David Liang, Vice-President of Domtar Asia Limited. "Not only will we be able to better serve our customers, through direct relationships and services, but we also have the opportunity to develop and grow our client base."

Liang, who has several years of experience in pulp sales, will head the Domtar Asia Limited office, supported by a staff of three. The offices are located at Millennium City 1, 388 Kwun Tong Road, Kowloon, Hong Kong.

According to Bloomberg, Heidelberger Druckmaschinen, the world's largest press manufacturer, may be in talks with manroland AG to merge the two companies.

The story stems from a report from the July 27th edition of Der Platow Brief, a Frankfurt-based financial newsletter. According to the newsletter, Allianz SE, which has a controlling interest in manroland and a 12 percent stake in Heidelberg, is pressuring the two companies to merge to protect its investments.

The Platow Brief does not cite any sources and neither company would comment on the rumour.

manroland AG was formed in 1979, but has roots in webfed technology going back to 1845. Heidelberg was founded in 1850 and controls 40 percent of the sheetfed offset press marketplace today.

Read the full Bloomberg story

A Michigan circuit court has awarded Valassis US$300 million for compensatory damages in its lawsuit against News America Marketing (NAM), a subsidiary of News Corp. A jury verdict agreed with Valassis’ claim of unfair competition and tortious interference by NAM.

Valassis is a media buyer delivering over 10-billion impressions annually, as well as a large direct-mail printer and a provider of newspaper polybags. "We are pleased with the jury's verdict, and we look forward to moving ahead with our two other cases, including the antitrust case in the Eastern District of Michigan where any compensatory damages will be trebled," said Alan Schultz, Valassis Chairman, President and CEO. “Furthermore, I am very proud of the efforts of our employees who have been competing on this uneven playing field for nearly a decade."

Valassis has additional lawsuits pending against NAM in the United States District Court, Eastern District of Michigan, asserting violations of the Sherman Act, and in the Supreme Court of the State of California for the County of Los Angeles raising claims under California's Cartwright, Unfair Competition and Unfair Practices Acts.

The Eastern District of Michigan case and the California case have not reached a trail stage.


Xerox Corp. today announced revenues of US$3.7 billion for its second quarter of 2009, which represents an 18 percent drop from second-quarter 2008. The company states this includes a 5-point negative impact from currency.

"We have seen sequential improvement with revenue up 5 percent from the first quarter,” said Ursula Burns, Xerox Chief Executive Officer. “However, assuming current economic conditions persist, we expect revenue will remain under pressure during the balance of this year.”

Equipment sale revenue declined 29 percent during the company’s second quarter, while operating cash flow reached US$609 million. Xerox ended the second quarter with a cash balance of $1.2 billion, and total debt was down US$347 million through the first half of the year. Xerox plans to reduce overall debt by US$1 billion this year.


Shortly after Unisource canceled its agreement to purchase Gould Paper Canada, xpedx Canada led by Mike Kearney steps in to purchase the paper distributor. xpedx Canada, a subsidiary of International Paper, on June 20 announced it had completed the acquisition of Vancouver-based Gould Paper Canada Ltd., a subsidiary of privately held Gould Paper Corporation, headquartered in New York City.

Gould Paper Canada, which employs approximately 65 people, and with distribution facilities in Vancouver, Calgary and Edmonton, will operate as part of xpedx Canada, a business of xpedx, International Paper’s distribution business and one of North America’s largest business-to-business distributors.

"This is an exciting opportunity for xpedx Canada to expand its market reach to three major western Canadian markets—Vancouver, Calgary and Edmonton," said Kearney, VP of xpedx Canada. "Gould Paper Canada has a strong reputation for providing great customer service."

Unisource Canada announced it had canceled a May 15 agreement to purchase Gould just two days after a new, June 14 agreement to purchase large-format equipment Mondrian-Hall.

 

 


After its June 13 filing under Companies’ Creditors Arrangement Act for bankruptcy protection, Fraser Papers of Toronto receives a reorganization extension from the Ontario Superior Court of Justice.

The extension is for 90 days through October 16, 2009, and was supported by PricewaterhouseCoopers, the court appointed monitor of Fraser Papers’ CCAA process. The company also announced that on July 13, 2009, the U.S. Bankruptcy Court for the District of Delaware, recognizing the CCAA proceeding as a foreign main proceeding, granted a stay of proceedings for Fraser Papers.

In a statement about the protection extension, Fraser Papers also noted the approval of additional financing from the Government of New Brunswick, which is to be targeted toward the completion of the company's lumber mill in Plaster Rock, New Brunswick. Fraser Papers expects construction on the modernization project to commence in the coming weeks, with completion targeted for the end of the third quarter.


Walmart will start offering printing services targeted at small businesses from its PhotoCentre locations in Canada.

"These new services are an integral part of our commitment to provide our customers the best assortment of on-demand printing services," said Crystal Taylor, National Manager for Walmart PhotoCentre.  "Whether it is photo, photo gifts or business printing items, Walmart offers our customers great products at low prices. Walmart PhotoCentre is much more than just photo printing." 

PNI Digital Media, headquartered in Vancouver, will provide the online gateway as well as templates for printing products aimed at the small business market as well as general consumers. Part of the Walmart PhotoCentre, Business Printing enables small business owners and consumers to easily order marketing and business materials using designs provided by PNI Digital Media. Products include business cards, notepads, letterhead, envelopes, fliers and posters. Walmart Business Printing also offers services such as colour, black & white copy services and coil-bound printing services.

Furthermore, the Business Printing service offers a broad range of promotional products such as customized calendars, fridge magnets, golf balls and mugs upon which companies can print their logos and other information on.

Each product is available in a range of standard sizes, and all orders are available for home or office delivery, or pick up at any of Walmart's 312 stores across Canada.

"With an average of 130,000 new small businesses opening across Canada yearly, we're excited at the growth potential of this marketplace" said Kyle Hall, Chief Executive Officer of PNI Digital Media.  "By leveraging the extensibility of our PNI Digital Media Platform, Walmart can instantly offer compelling products in a whole new market segment.  Over time we will see more services and products added to the PNI Digital Media Platform that are focused on solutions for small business." 


Two days after announcing an agreement to buy Mondrian-Hall, which itself filed for bankruptcy protection on July 8 of this year, Unisource Canada has now canceled an earlier agreement to purchase Gould Paper.

Unisource explained its decision in a single-sentence statement made on July 16: "Unisource Canada Inc. has been unable to reach a conclusive agreement with respect to the acquisition of Gould Paper Canada Ltd. in a timely manner and, as a result, has decided not to pursue the acquistion further at this time."

The original agreement to purchase Gould was made in mid-May 2009. On July 14, Unisource announced its intentions to purchase national wide-format equipment distributor Mondrian-Hall, which is a deal it expects to close by mid-August. On July 8, Mondrian-Hall filed for bankruptcy protection under the Companies' Creditors Arrangement Act., through RSM Richter.

The Supreme Court of British Columbia has been petitioned by Catalyst Paper over recently set property tax rates in North Cowichan, Port Alberni and Campbell River; and potentially Powell River in another filing. These are the four municipalities holding Catalyst Paper’s four British Columbia-based paper mills.

In a press release about the action, Catalyst argues, under Section 262 of the Local Government Act, “that the tax rates are unreasonable and therefore beyond the municipalities' jurisdiction. Catalyst has held long-standing discussions with each of these municipalities in an effort to address the issue of unreasonable tax rates imposed on major industry. The bylaws being challenged would perpetuate disparities that are unsustainable in light of extremely challenging economic conditions.”

The company continues to state that major industry tax rates have been set at a rate 20 times above the residential rate in North Cowichan, while the other three municipalities have seen a smaller increase that is still 10 times the residential rate. Referencing British Columbia’s provincial neighbour, Catalyst points out that Alberta typically caps such rates at four times the residential rate.

Catalyst estimates that the new bylaws would result in a 2009 property tax cost of $19.3 million. That estimate excludes school, district and other provincial levies – “This is a modest reduction of about 10 per cent from the previous year's payments of $21.7 million, and remains far higher than the cost of municipal services consumed - estimated at between $4 and $6 million in 2008.”

Commenting on the action, Richard Garneau, CEO of Catalyst, stated, “We've done all we can to impress on municipal governments that this is a shared problem and that the viability of the industrial economy in coastal BC is at stake. Excessive property taxes are diverting scarce capital that's needed to support the long-term viability of our operations as we face one of the most difficult markets in decades.

“Legal action was not our first choice. But the current bylaws suggest that our appeals for tax equity have not been heard, and continuing to pay excessive tax bills with borrowed money is just not sustainable or prudent, especially in current credit markets."

Based in Richmond, BC, Catalyst is the largest producer of specialty printing papers and newsprint in Western North America and also produces market kraft pulp. It claims to own Western Canada's largest paper recycling facility. The company's six mills have a combined annual production capacity of 2.5 million tonnes.

RRD Quebecor World

RR Donnelley & Sons Company states its proposal to acquire substantially all of the assets and assume certain liabilities of Quebecor World has expired.

"We are disappointed by the decision of Quebecor World to reject our June 8 proposal," said Thomas Quinlan III, President and CEO of RR Donnelley (RRD). "We believe that our proposal was undoubtedly in the best interests of creditors based on a comparison of the distributions under our proposal with the distributions under the proposed stand-alone plan of reorganization. We are particularly disappointed because of the efforts and concessions made by us to adapt our proposal in response to concerns that were communicated to us."

RRD’s original May 12, US$1.3 billion proposal to Quebecor World was soon followed with modified versions. RRD states these June 2 and June 8 modifications – amounting to about US$200 million in cash and stock – were based on “preliminary due diligence” and to respond to feedback from certain Quebecor World creditors.

"This would have been an excellent fit for RR Donnelley and the best opportunity for the Quebecor World creditors. However, given our view of the Quebecor World operations, a transaction ascribing a higher value to Quebecor World than we offered in our last proposal is simply not in the interests of RR Donnelley," said Quinlan. "We look forward to continuing to pursue other strategic initiatives."

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