Good morning ladies and gentlemen.

I am very pleased to be here this morning with the newsprint producers association. As you surely know, you, the newsprint producers and we here, at transcontinetal printing - serve the same market – newspaper publishers - and our future success depends on how that market responds to the challenges it currently faces.

A number of years ago, Transcontinental printing began to see newspapers as an industry with a need – a need that we felt, we were uniquely equipped to meet.

Please allow me to tell you the story of the Transcontinental printing newspaper group.

Since its creation in 2000, Transcontinental’s newspaper group has more than doubled its revenues and is now the #1 contract printer of daily and weekly newspapers in canada, with over 6 million copies printed every week.

With specialized newspaper plants in halifax, quebec city, montreal, ottawa, toronto, vancouver and 5 other cities – our foorprint is truly sea-to-sea.

We are proud to print canada’s national newspaper, The Globe and Mail, in atlantic canada, quebec and its main market, ontario.

Since october 2003, the daily La Presse is printed by Transcontinental at its brand new and dedicated metropolitan facility here in montreal.

In 2005 Transcontinental launched its aggressive plan to develop and create partnerships for its unique newspaper outsourcing business model into the united states - and in april of 2005, we signed a 10-year agreement to print The New York Times for the ontario and western new york state markets.

In 2006 we announced the landmark signing of a 15-year exclusive agreement with the hearst corporation to print The San Francisco Chronicle – one of the world’s great newspapers.

The trend to partner with an outside print supplier is clearly established.

The Transcontinental newspaper printing group has the knowledge, the team, the track record and the resources to bring their unique model to us newspaper publishers.

Why has our model been gaining ground?

How does a publisher benefit from a partnership with Transcontinental?

First no further capital expenditures are required by the publisher - not now - not in the future. Publisher investment can be focused on product development, cross media platforms and brand extensions.

Access to state-of-the-art equipment and technology.

It provides better cost control - better predictability of expenses.

Improved quality of the newspaper - greater colour and overall presentation.

The avoidance of significant start-up costs including training and two-plant parallel operations.

A simplified communication process with print production team.

A solution-oriented plant staff - always aiming to exceed publisher’s expectations.

An increase in colour revenues.

Increased speed of production – which translates into later editorial deadlines and earlier deliveries.

An increase in inserting flexibility and the capacity to move from mass marketing closer to one-on-one marketing.

And finally, better opportunities for Transcontinental to leverage the productive capabilities of the assets in other market or products.

What it means is that the publisher focuses on publishing and product development and we, at Transcontinental, take care of manufacturing, each partner then focuses on its main expertise.

Transcontinental is much more than a print outsourcing service provider…

…Transcontinental is a partner offering solutions and a unique business model

* * *

Now, part of my role as president of Transcontinental printing products and services sector is to keep an eye on the future – especially future technologies that will impact our business model – that will impact newspapers.

In this role, I meet clients, industry experts, gurus and leading edge technology developers.

Ladies and gentlemen – there is something I need to share with you this morning.

I have seen the new newspaper…

The new newspaper.

It is portable…

It is lightweight…

It is refreshed daily…

…with hi-res colour images,

…with innovative advertising concepts brought to life by the most creative agencies…

…with authoritative information on Local, national and international news.

On business.

On arts & entertainment.

And on sports.

…it can be folded without losing image clarity

…it can be read without an exterior power source

…it can even be read in the bathtub with little to no risk

…the new newspaper is a culmination of leading-edge technology and human creativity.

Ladies and gentlemen,

I give you

The new newspaper!

Fresh from our state-of-the-art facility in east-end montreal, the copy of La Presse meets all the aforementioned attributes.

It is in fact, the new newspaper.

* * *

Let me elaborate on what I just said.

This does not, however, change the basic facts that the industry is in transition.

What does the future hold?

What will it take to re-invent the newspaper further?

What will it take to generate new energy and excitement?

One thing that is clear is that those who adapt to changes in the marketplace will survive and thrive.

And those who stay with old ideas and old models will not.

Reader and advertiser expectations push us towards greater levels of quality.

For the publisher this means constantly enhancing the editorial product.

For us, it means better, more consistent print quality, greater flexibility and product innovation.

We are proud that with our long-standing partner, The Globe and Mail, we have been named for three consecutive competitions to the world quality colour club – an exclusive club with only 50 members worldwide in each competition. I might add that in the most recent competition, just last year, The Globe and Mail was named the number 1 production quality newspaper in north america and number 2 in the world.

But, as you know, quality is a moving target and it always moves in one direction.

In a recent planning session, I challenged some members of my newspaper team with the following question:

We are building newspaper models for the future – let us look at the past and ask ourselves what were the quality expectations of newspapers a mere 15 or 20 years ago? …what will be the quality expectations in the future?

Well 20 years ago, most papers were satisfied with a few process colour pages that were not more than an 8th of an inch out of register.

Today our standards are much higher.

Tomorrow, the standards will be higher still.

If television can create a buzz around hdtv – and now even radio is coming out with cd-quality hd-radio – why can’t newspapers come out with hd-newspapers?

You, the paper producers, have a role to play here. We need you to bring higher-quality grade papers – like s.c.c. - to the newspaper market at more stable and economical prices.

The return for you will be greater and more predictable volumes of these grades and a brighter future for the industry that we both serve.

This will enable the industry to attract younger readers – keep the readers they already have and bring categories of advertisers that they do not serve well today – cosmetics, fashion, and clothing - all of this without any readers dirtying their hands.

Many newspaper executives across north america are in the process of convincing themselves that the sky is falling on the industry… we at Transcontinental printing do not share this negativity.

We must make room for innovation in this industry – to create new momentum and optimism.

To conclude,

While the latest nadbank readership surveys show that daily newspaper readership is actually increasing when both free distribution and paid circulation numbers are combined, paid circulation is generally slowing down and growth opportunities are difficult to find.

Some compelling paid dailies – our partners La Presse and The Globe and Mail being shining examples - are holding their own quite well.

But across north america advertising revenue is facing challenging market conditions and increased competition from other media.

Maintaining advertising revenue will depend on a newspapers’ ability to offer a product of better quality – both from a production and editorial point of view.

Newspapers must offer quality enhancements including brighter paper, more colour, better design and provide innovative advertising value such as scented paper, in-line coupons, pop-up pages, multiple gatefolds etc.

newspapers have to provide more targeting for inserts and more zone programs.

Improved targeting of the advertisers’ audience is critical as newspapers fight with other media alternatives.

Those who adapt will survive and succeed.

The Transcontinental print partnering model helps publishers manage the technological and financial risks Associated with huge capital investments and brings innovation to the forefront of a traditionaly conservative industry.

Rest assured that Transcontinental printing aims to be part of a new wave of optimism and prosperity in the north american newspaper industry.

By bringing higher quality stocks at a more affordable cost, you, the paper producers, can be part of this as well.

Thank you.