27 Jun 2014

Arch rivals in cost-cutting deal

1:01 pm on 27 June 2014

An unlikely alliance in the newspaper business will see the country's two major print media companies, Fairfax and APN Media, join forces to save money on printing costs.

Under an agreement announced on Friday, APN, which owns The New Zealand Herald, will print copies of Fairfax's Waikato Times and Sunday Star Times newspapers at its Ellerslie print site in South Auckland.

Fairfax chief executive Greg Hywood says sharing a print site with a competitor is common practice in overseas markets.

He said the move allowed Fairfax to boost its print capability in the upper North Island and gain additional scale and efficiencies without the need for capital investment.

APN said the deal would help utilise spare capacity at its Ellerslie facility where a significant equipment upgrade recently took place.

It would also help the company hit its target of $20 million in cost savings this year, after it already cut $40 million in printing costs in 2013.

The print media industry is under pressure to cut costs because classified advertising revenue across the board has transferred to the internet and websites such as TradeMe and Seek.

Both papers expressed optimism in the ongoing viability of printed newspapers.