Eighty-six printing and maintenance employees will be made redundant as a result of the closure, which will take effect from March 12. The Spencer Street operations printed many of Fairfax's Victorian community publications such as the Dandenong Journal and the Werribee Banner. Fairfax said the closure would not affect any of the company's publications in Victoria. The net cost of the closure in the second half of 2003/04 was expected to be between $6 and $10 million, but net annualised savings of more than $3.5 million were expected to be realised, it said. Also, the minimal carrying value of the assets at the plant was expected to be covered by transfer and sale of plant and equipment. A spokesman said Fairfax was reviewing options on what to do with the Spencer Street site, but was yet to make a final decision. "We made every effort to maintain a viable printing business for our community publications at Spencer Street," Fairfax chief executive officer Fred Hilmer said. "Unfortunately, continued in-house printing of these papers is now uneconomic giving the shift in demand and supply for printing in the Victorian market, particularly over the past year." It is understood that the reason for the closure included the fact the facility was not able to meet the market's growing demand for colour and stitch and trim products. The Fairfax spokesman said "other arrangements" had been made for the printing of the community newspapers, adding that Fairfax's Tullamarine printing operations did not have the capacity to take on the additional publications. However, he would not comment further on whether this meant printing from Spencer Street would be outsourced. Shaw Stockbroking analyst Brent Mitchell said it was possible Fairfax could use its new relationship with junior publisher Text Media Group Ltd. Fairfax is completing its acquisition of Text. "Obviously it changes with the acquisition of Text Media," Mitchell said. "That aspect of it gives them a bit more size and a bit more negotiating power if they want to outsource it. "It is possible that their own publications could go to the same printer as Text Media." He said it made sense for Fairfax to consolidate the printing of its and Text's publications with one printer for economies of scale and convenience. Fairfax is in the midst of a $65 million takeover bid for Text, having snapped up more than 90 per cent of the group and has installed its own representatives on the target's board. The acquisition of Text, which publishes The Melbourne Weekly magazine among other titles, will deliver Fairfax some strong advertising revenue streams in the Melbourne market.