Transcontinental: No change in core strategy

Transcontinental Inc. remains committed to its newspaper outsourcing strategy despite the slowdown affecting the industry and despite concerns that its contract to print the San Francisco Chronicle may be in jeopardy.

“There is no change to our core strategy,” Ted Markle, Transcontinental’s senior vice president, newspaper group, told News & Tech.

“I think it’s a situation where, through this time of transition, there will be winners and losers in this industry, and because of the long-term nature of our kinds of relationships with publishers, we are going to be sure to partner with the winners.”

Transcontinental’s first U.S. project, to print and package the San Francisco Chronicle at a $200 million plant in Fremont , Calif. , is in flux because Hearst Corp. has threatened to close the money-losing paper. Transcontinental earlier said it has contingency plans in place in the event Hearst does pull the plug, and that it would also be “indemnified” against possible losses.

“Everything is on schedule in Fremont ,” he said. “We are excited and pleased about the progress we have made and the team we are building.” At this point, he added, “We’re sticking to our plan.” The plant is scheduled to open in June.

Transcontinental is trying to weather its own challenges. The company, which also prints The Globe and Mail, La Presse and certain editions of The New York Times, lost more than $6 million during the first quarter, compared with a $34.1 million profit in the same period a year earlier.

“We are going to see what the marketplace looks like and we will adapt accordingly,” Markle said about the near future. “We’re not putting things on hold; what we are doing is staying very close to the industry and are monitoring how things are developing. When the industry comes back, we’ll be ready.”

In the meantime, Transcontinental is starting to produce product at its Transmag plant in suburban Montreal that’s anchored by triplewide Colorman presses from manroland. One of the presses is also equipped with a UV drying system. That press, Markle said, will be operational later this year.

Markle also said that Transcontinental hopes to identify — soon — the press vendor it will use to print The Globe and Mail under terms of its contract extension with the national paper. Transcontinental said it would buy new presses and adopt other technology to establish “a new and innovative Canadian platform” anchored by presses capable of printing both newspapers and advertising inserts (see News & Tech, October 2008).