One provides the canvas, the other produces the artwork. For two years now, the two companies have merged their operations, thus providing each other with new technological tools. In an industry where technological advance is key, the alliance between the two high-tech firms has enabled them to further consolidate their offer.

Oberthur Fiduciaire, a leader in banknote printing

The French secure banknote printer is one of the few who have thrived in the ultra-competitive global market. The technological pressure, made high by the constant threat of counterfeiting, is such that few manufacturers were able to keep their security devices competitive and relevant. Oberthur Fiduciaire made the choice to invest heavily in research and development, based on the belief that no other market put added value at a more central position, and to always keep its supply chain under tight control. As a result, Oberthur Fiduciaire now supplies tens of central banks around the world, and has recently developed its presence in Europe, with the simultaneous signature of a strategic partnership with the Bulgarian government and the takeover of a production plant in Sofia. The World Banknote Summit website writes on Oberthur, “…now serving 70 countries. Oberthur Fiduciaire is a specialist in the design and production of banknotes, associated security features, and secure documents. Oberthur Fiduciaire’s know-how and expertise, integrity and trust, have long been recognized by central banks and governments across the world.”

Joint venture

As part of its strategic growth and in order to further strengthen its technological security capabilities, Oberthur Fiduciaire announced its acquisition of VHP paper mills in 2017. “Innovation is not just an in-house process. We are also innovating and strengthening our supply chain by working with high quality manufacturers. I am thinking in particular of the purchase of the Dutch company VHP Security Paper two years ago. The advantage is twofold with such an operation. First of all, we acquire additional technical excellence, as VHP has been a reference in the manufacture of security paper for a long time. In addition, we are thus strengthening the control of our supply chain, which is also increasingly appreciated by Central Banks.” explained Thomas Savare, Managing Director of Oberthur Fiduciaire in an interview last October.

The latest technological devices developed by Oberthur Fiduciaire place it ahead of its game. Owner of many patents, the printer uses high-definition security features, and regularly completes its inventory on a regular basis. The latest innovations include the Foil patent (which uses a punched-out ribbon as an identification marker). The association with VHP has also provided Oberthur with an enhancement of its technological tools such as Vision or Pixel watermarks (a custom-built development on watermark technology). Thus, the French company has further strengthened its arsenal of high-tech developments, while the banknote paper mill has retained all the valuable innovations. Definitely a win-win operation.

Higher standards

The Dutch company also benefited from the impetus of Oberthur Fiduciaire by successively obtaining ISO standards in the fields of safety, quality and environmental management. Last year, VHP has obtained the ISO 37001 standard. This norm, which has been held by Oberthur Fiduciaire for two years now, is a safeguard against corruption, a sensitive issue in the fiduciary printing industry. Henk Baas, Head of Safety and Quality at VHP said: “Our customers around the world are demanding that we demonstrate that we are doing everything in our power to prevent corruption. Our parent company in France was one of the first to be certified to this standard in March 2018 and we began installing and implementing it in August.” Indeed, the security of operations is just as essential as the security implemented in the banknotes themselves. Thomas Savare has explained this choice by saying: “We believe it is essential to adopt international standards established by trusted third parties. In this respect, the ISO standards we have put in place, whether in terms of quality, respect of the environment, safety or the fight against corruption, with ISO 37 001 for example, are, in my opinion, much more relevant arguments than any statements that we could make.”

Producers must constantly renew their security device inventory in order to stay ahead of counterfeiters. The strategy which has always been in play is to design security details which will take as long as possible to detect, understand and reproduce, for counterfeiters, and change them on a regular basis with new ones, thus rendering forged notes too expensive and useless. In this regard, the VHP partnership is an additional Oberthur asset, in the eyes of its clients.

As mundane as they may seem, banknotes are in fact a treasure trove of technology and their production relies on a subtle balance between publicity (building a name is often a very long process in the industry) and secrecy, to protect industrial know-how. The manufacturer must also keep control of industrial processes, its technology and its supply chain, all at the same time. The integration of the VHP paper mill is therefore a major upgrade in Oberthur’s production apparatus.

Categories: Economy & Finance, Strategy