Transcontinental scoops Rogers printing contract from Quebecor World
Last Updated: Friday, February 15, 2008 | 5:53 PM ET
The Canadian Press
Transcontinental Inc. has won an important round in the battle of Quebec's printing giants after wrestling from rival Quebecor World a long-term contract to print all the magazines of Rogers Communications Inc.
The six-year deal with Rogers, which is Canada's largest magazine publisher as well as owner of the country's largest cellphone network and cable company, is valued at $210 million.
"It's a huge contract," Transcontinental president and CEO Luc Desjardins said in an interview Friday.
"Even though there is no process, for us it's the beginning of a partnership with Rogers that we're very proud of and hopefully if we could make it grow that's what we're looking for."
Rogers has more than 70 magazine titles, including Chatelaine, Maclean's, L'actualite and Canadian Business. Transcontinental's magazine titles include Canadian Living, Elle Canada and Elle Quebec.
The contract with Rogers takes effect Feb. 1, 2009, at which time Transcontinental will become the largest printer of catalogues and magazines in Canada.
The magazines will be printed primarily at Transcontinental's massive RBW Graphics facility in Owen Sound, Ont. Work will also be completed in Western Canada and in Montreal.
Transcontinental plans to invest up to $25 million on press and finishing equipment. But no decisions have yet been made on increasing employment.
Quebecor World struggling
The previous Rogers agreement with Quebecor World — a company that filed for bankruptcy-court protection last month — was valued at $240 million when it was announced in November 2002, extending a long-standing relationship.
Rogers said the change in printers has nothing to do with Quebecor World's financial problems and a review was initiated more than six months ago.
"This was a regular run of course decision that we made," said Suneel Kahnna, spokesman of Rogers Publishing. "It's in no way tied to recent events of Quebecor World."
Quebecor World has printed Rogers magazines even before they purchased Maclean-Hunter in 1994.
Quebecor World spokesman Tony Ross said the company submitted a "complete proposal" but that Rogers made their selection based on price.
"We continue to sign new customers and renew existing ones across all our businesses and we expect to make additional announcements in the weeks to come," he said.
But analyst Adam Shine of National Bank Financial said Quebecor World's financial problems will make it increasingly difficult to renew customers, let alone sign new customers.
"As such, the Rogers win by Transcontinental isn't likely to be the only such scoop from its competitor in coming months," he wrote in a report.
Transcontinental shares lost one cent to $15.61 in trading Friday on the Toronto Stock Exchange. Quebecor World shares lost 1.5 cents to 33 cents.
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