BANKNOTE PRINTER DE LA RUE ANNOUNCES CUTBACKS

De La Rue will shut a printing press in Malta, with the possible loss of 300 positions, and reduce its total production capacity from eight billion to six billion banknotes per year.

The FTSE 250 company proposed doing this by cutting the number of production lines from eight to four - leading to the closure of production in Malta.

The new system, which will use more efficient modern printing machines, will have the flexibility to produce seven billion notes a year if necessary, but anything above that will have to be outsourced to external partners.

Chief executive Martin Sutherland said: "As the leading commercial designer and printer of banknotes and passports, our manufacturing footprint review has identified significant opportunities for improvements in capability and efficiency".

The company has struggled in recent years, particularly due to the rise of contactless and cashless payments. Dwindling demand for banknotes intensified competition among the suppliers and put pressure on contract prices. NYSE Post

To read the complete article, see:
Banknote printer De La Rue axes production, jobs NYSE Post http://nysepost.com/banknote-printer-de-la-rue-axes-production-jobs-63572 (http://nysepost.com/banknote-printer-de-la-rue-axes-production-jobs-63572)

It has a licence to print money, but De La Rue will produce much less of it after cutting half its production lines.

The move is designed to preserve the banknote printer’s cash while providing currency for the Bank of England and dozens of governments.

The restructuring is expected to save £13 million a year as De La Rue reduces annual printing capacity from eight billion notes to six billion.

Demand for cash is falling as more people use debit cards and mobile phones to pay for small items. The increasing use of longer-lasting polymer notes also has hit profits. De La Rue won a contract with the Bank of England last year to print “wipe-clean” polymer £5 and £10 notes in Debden, Essex, but the group has been hit by a glut of banknote paper as well as the lower value of the euro, which has boosted its continental rivals.

De La Rue, which traces its roots back more than 200 years, will close its banknote printing operation in Malta, although it will move its passport technology work from the northeast of England to the Mediterranean island as part of the restructuring. It will maintain its factories in Gateshead, Kenya and Sri Lanka. About 300 jobs are at riskin Malta and Gateshead, which will cost De La Rue £8 million.

To read the complete article, see:
More plastic means less need for cash for De La Rue (www.thetimes.co.uk/tto/business/industries/supportservices/article4630416.ece?shareToken=f4827e44fce901cdf50c2406b13ecebd)

The move to cut cash production comes as economists begin to debate eliminating paper money altogether. It all comes down to negative interest rates.

Central banks, particularly in Sweden and Switzerland, have targeted negative interest rates as a way to turn savers into spenders and get the economy moving. The logic goes that by making people pay interest to banks for keeping deposits, they will change their behaviour and spend the money it instead.

The only problem is that anyone can escape having to pay money on savings by taking it all out in the form of cash and hiding it in a shoebox somewhere, making the negative-interest-rate policy less effective.

The Bank of England's Andy Haldane and European Central Bank's Benoit Coeure have each identified cash as a problem for central banks wanting to push the boundaries of monetary policy.

So while De La Rue battles the rise of technology, there may be a bigger problem for bank notes and cash looming beyond that.

To read the complete article, see:
We got another major sign that cash is dying (www.businessinsider.com/de-la-rue-the-worlds-biggest-banknote-supplier-is-cutting-production-by-25-2015-12)

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