Industry News, Part 2

Feb 1, 2005 12:00 AM, AP Staff

News from: Morgana Systems, Kodak, GCIU, Domino Amjet, Intl. Paper, basysPrint and Future Graphics.

IP to sell Fine Papers to Mohawk
International Paper (Stamford, CT) has signed a non-binding letter of intent to sell its Fine Papers Business to Mohawk Paper Mills Inc. (Cohoes, NY). The Fine Papers Business includes the writing, text and covers papers and artist papers segments. The transaction is subject to approval by the International Paper board of directors as well as completion of due diligence and financing arranged by Mohawk. International Paper and Mohawk expect to complete the transaction during the first quarter of 2005, subject to conditions and regulatory approvals.

Included in the transaction are International Papers’ Hamilton, OH, paper mill; Saybrook, OH, converting center; and Westfield, MA, Artist Papers converting operation. The sale also includes the Strathmore, Brite Hue, Via and Beckett brands.

The Fine Papers Business produces approximately 65,000 tons per year of Strathmore, Beckett, Via and Brite Hue brands. The business employs approximately 500 people.

Morgana targets growth in North American market
UK-based print finishing equipment manufacturer and supplier Morgana Systems Ltd. has established a new sales and service organization for the United States and Canada. The company aims to triple its sales in North America within two years.

Morgana has set up a new showroom, workshop and warehousing complex in Toronto and is planning to establish similar facilities in Chicago and Atlanta.

Company director Paul Garratt explains, "While the USA is already one of our largest export markets, we feel that there is tremendous potential for growth given the strength of our product range."

Morgana also has been appointed U.S. distributor for the Nagel range of bookletmakers and drills. Morgana will showcase its full range of digital finishing products at the On-Demand and Print 05 exhibitions, this year.

Kodak to own KPG, Creo
Eastman Kodak Co. (Rochester, NY) has announced that it will become the sole owner of Kodak Polychrome Graphics (KPG) (Norwalk, CT) through redemption of Sun Chemical Corp.’s 50 percent interest in the joint venture.

Under the terms of the transaction, Kodak will redeem all of Sun Chemical’s shares in KPG with a total of $817 million from closing through 2013. The transaction is expected to close in April 2005. Kodak expects this to add approximately $1.1 billion to its 2005 revenue, reflecting approximately nine months of Kodak ownership and the elimination of intercompany sales from Kodak to KPG.

Enhanced operations
Antonio M. Perez, president and COO of Eastman Kodak Co., says, "Bringing KPG together with Kodak’s existing graphic communications businesses—Kodak Versamark, NexPress and Encad—will enhance our operations, extend significantly our coverage worldwide, complement our present portfolio, and strengthen Kodak’s ability to serve our customers."

Kodak initially plans to operate KPG as a wholly owned subsidiary, part of the company’s Graphic Communications Group (GCG). Kodak is developing plans to integrate operations across its subsidiaries in the GCG. The KPG management team will remain intact, with KPG CEO Jeff Jacobson leading the organization and reporting to James Langley, president of Kodak’s GCG and senior vice president at Eastman Kodak Co.

Additionally, Eastman Kodak Co. has entered into a definitive agreement to acquire Creo Inc. (Vancouver, Canada).

Under the terms of the agreement, Kodak will pay approximately $980 million in cash, or $16.50 per share, for all the outstanding shares of Creo. The transaction, which has been approved by Kodak’s and Creo’s respective boards of directors, is to be carried out by statutory plan of arrangement under Canadian law and is subject to regulatory approvals, the approval of Creo’s shareholders, and court approval.

At a special meeting on March 29, 2005, Creo shareholders will consider and vote on the proposed transaction.

"Today we conclude a strategic review process that began last summer," says Amos Michelson, Creo’s CEO. "The proposed transaction will not only generate immediate return for Creo shareholders but also will benefit our customers through the combination of leading prepress equipment and consumables. The economy of scale gained by combining resources will allow us to speed up product development and deliver new innovations and breakthrough solutions to the market."

Digital pillar
Daniel A. Carp, Kodak’s chairman and CEO, says, "Graphic Communications represents one of the three pillars of Kodak’s digitally oriented growth strategy. The purchase of Creo strengthens that pillar and essentially concludes the company’s acquisition plan announced in September 2003."

Creo has more than 25,000 customers and offices in 30 countries worldwide. Upon the closing of the transaction and the completion of the organizational structure of Kodak’s GCG, Creo’s operations will become part of the Graphics Solutions & Services operating unit of GCG.

GCIU members vote to merge with Teamsters
A majority of Graphic Communications International Union members have voted to merge the GCIU with the International Brotherhood of Teamsters (IBT).

GCIU president George Tedeschi says he is "extremely gratified that a majority of our active members showed the wisdom and foresight to approve merger with our good AFL-CIO sister union. We know that by becoming an IBT conference, the GCIU will have a powerful new alliance for organizing and negotiating decent wages and benefits for our members."

Tedeschi adds, "[The merger] will provide new power and resources to ensure that Quebecor World—as well as other workers—win the right to organize a union free from harassment, intimidation and coercion."

According to the agreement, Tedeschi and other officers continue to serve GCIU members in their current offices. The GCIU is an autonomous conference within the Teamsters union, allowing the GCIU and its locals to maintain their autonomy and identity, including authority over their contracts.

Domino Amjet receives accolades from Quad/Graphics
Quad/Graphics (Sussex, WI) has honored inkjet printer manufacturer and printing systems supplier Domino Amjet, Inc. as a Supplier of the Year for its performance and working relationship with the company.

Arthur Noe, director of corporate purchasing at Quad/Graphics, says, "After a rigorous and thorough review of its supply base by an internal cross-functional selection committee, Domino was judged as the ‘Best of the Best.’ This award recognizes Domino’s exceptional performance and excellent working relationship with Quad, and we are grateful for their continued commitment and contribution to the success of our company."

Management changes at basysPrint
Dr. Horst Steppat is the new managing director of basysPrint (Boizenburg, Germany), following the December 2004 resignation of previous managing director Friedrich Lüllau. Steppat will report to Dick Tilanus, CEO of PunchGraphics (Lier, Belgium).

Future Graphics celebrates 10th anniversary
Future Graphics celebrates its 10th anniversary, growing from a part-time venture into a $3.5 million company. "We started out with only one customer," says Future Graphics’ partner and vice president Kenny Stancil. "Our first job was printing and binding a simple 32-page, black-and-white booklet for the North Carolina Real Estate Commission. At night, we fed 80,000 booklets one at a time by hand into an early 1900s saddlestitcher after we put in a full day working on our regular jobs."

The company continued its growth by opening a new 50,000-sq.-ft. printing and mail-house facility adjoining the Mudcat’s Five County Stadium in Eastern Wake County. They also added three new presses, two with six-color capability and one that prints on two sides simultaneously.

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