Week of April 24, 2000
  Blockbuster Deal of the Week
   from Site Selection's exclusive New Plant database

Roll the Presses: Quebecor Shuffles Off
to Buffalo with 400-Job Expansion

The pressmen are shuffling off to Buffalo - or at least they should be, considering the 400-job expansion recently announced by Quebecor World (www.worldcolor.com).

Quebecor World is a subsidiary of Montreal-based Quebecor Printing (www.quebecorprinting.com), the world's largest commercial printer. And the company's expansion in Western New York underscores that industry's dual push: a simultaneous drive toward both specialization and centrality. Unlike the U.S. steel industry, for example, which resuscitated itself by creating smaller plants, the printing sector is pushing hard for the economies of clustering.

(As anyone who's ever paid for web printing knows, centrality makes obvious bottom-line sense for printers. The big costs come in setting up the presses. Once they're rolling, the cash ka-chings add up with stunning rapidity.)

Explained Kevin J. Clarke, vice president and general manager of Quebecor World Buffalo, "This major expansion is part of Quebecor World's strategy to consolidate operations into larger and more specialized plants. By creating this mega-facility, we can achieve greater efficiency and increased economies of scale, as well as position ourselves to better serve our customers."

Quebecor's consolidated approach seems to be working. In recent years, the company's sales and income growth rates have both topped 20 percent - a noteworthy performance within the global printing industry's intensely competitive environment.

Move Consolidates Quebecor's
Mass-Market Paperback Production

Quebecor World's new Buffalo mega-facility will specialize in two main products: mass market paperback books, including AAA Tour Books, and newspaper inserts and coupon books.

The completed new facility will serve as the consolidated base for all of Quebecor World's U.S. mass-market paperback manufacturing and distribution operations. With the expansion, the plant's paperback printing capacity will increase to more than 400 million books annually.

And the addition of two wide-web gravure presses at the Buffalo facility will increase the plant's printing capacity by approximately 50 percent for newspaper inserts and circulars. That expanded capacity will improve service to retail customers on the East Coast, according to company officials.

New Labor Pact Major Factor

As in most location decisions, labor was a huge concern.

Unlike most location decisions, though, this one put its major labor issues to bed with a few strokes of a fountain pen. Before Quebecor World went public with its expansion plans, it hammered out a new, nine-year labor pact with the unions that work inside the Buffalo plant. Unsurprisingly, company officials diplomatically praised the unions' cooperative stance at the expansion's formal announcement.

"The company applauds the unions' progressive approach to this agreement, which has yielded many beneficiaries, including current and future employees, the union itself, Quebecor World and our Buffalo plant customers," said David S. Boles, president of Quebecor World's North American Retail and Sunday Magazine Group.

State, County Providing Incentives

Despite the 400 new jobs that the expansion will create, Quebecor World's announced capital expenditures of US$15 million for the project is a comparatively low figure. That $15 million figure, according to company officials, includes "equipment relocation costs," environmental upgrades and the hiring and training of new and existing employees.

In addition, that $15 million total includes location incentives from New York's Empire State Development Corp. (www.Empire.state.ny.us) and from the government of Erie County (www.erie.gov).

Speaking at the Buffalo expansion's announcement, Gov. George Pataki noted, "Not only does this project reflect our commitment to work together with business; it also demonstrates what can be accomplished when the state, labor unions and private industry work together. We are very pleased to be supporting this project."

Erie County is providing tax exemptions and $1 million in retraining assistance through the County Work-force Development program. Erie County Executive Joel A. Giambra, whose administration is supplying those incentives, trumpeted Western New York's business climate at the Quebecor World expansion announcement.

"We stand ready to facilitate investment, especially by companies that already know the value of our Erie County work force," Giambra said.

Buffalo Only One of 20-Plus
Quebecor World Plants

Greenwich, Conn.-based Quebecor World (formerly known as World Color Press) certainly seems among the ranks of Erie County-familiar companies. Even before the newly announced expansion for the Buffalo plant, the facility employed 900 and spanned more than 850,000 sq. ft. (76,500 sq. m.).

Quebecor World had a wide range of other existing plants that could've conceivably contended for the U.S. expansion. According to Hoover's Online (www.hoovers.com), the company's heaviest existing manufacturing concentrations include:

  • six facilities in Illinois (in Elk Grove Village, where the company has two plants, along with single plants in Des Plaines, Effingham, Itasca, and Salem);
  • three facilities in Georgia (in Atlanta, Augusta, and Oakwood);
  • three facilities in Tennessee (in Covington, Dresden, and Dyersburg);
  • two facilities in Kentucky (in Lexington, and Versailles) and
  • two facilities in Ohio (in Cincinnati, and Oberlin).
In addition, Quebecor World also has a major manufacturing presence with its facilities in Corinth, Miss.; Jonesboro, Ark.; Oklahoma City, and Warren, Mich.

In addition to its pluses in labor and incentives, Buffalo also offered advantageous geographic positioning. Quebecor officials noted that the Buffalo site "given its proximity to the border, is ideally located for U.S./Canadian cooperative manufacturing efforts."

Project construction will begin immediately, with a Dec. 31, 2000, target completion date, company officials said.

As part of the expansion, Quebecor World has already set up at its existing area plant what company officials called "a manufacturing transition team . . . to ensure a smooth transition of work to the Buffalo plant."

©2000 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.