BANKNOTE PRINTER DE LA RUE SAYS CASH IS STILL KING

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V19 2016 INDEX E-SYLUM ARCHIVE

The E-Sylum: Volume 19, Number 1, January 3, 2016, Article 29

Kavan Ratnatunga forwarded this article from The Telegraph about UK banknote printer De La Rue. Thanks! Despite recent restructuring, layoffs, and the threat from electronic payments, the company says the banknote printing industry is still very much alive. -Editor

You might not know the company’s name, but you are definitely familiar with its biggest product – the £64bn of UK banknotes in circulation.

De La Rue is the company which produces the £5, £10, £20 and £50 notes for the Bank of England; and despite the rise of contactless payment and people’s willingness to pay by plastic, it has no worries about the future of printed money.

“Even though we’re using credit and debit cards more than ever, people still have cash in their wallet,” says chief executive Martin Sutherland, pictured left. “It’s convenient, it’s free at point of use, classless – not everyone has a bank account - and most of all, it’s reliable.

“Cash is the payment mechanism of last resort, it will still work when there’s a power cut or the card reader won’t scan.”

His confidence is backed up by data. Industry analyst PIRA says the banknote market in western Europe is growing at about 2.5pc a year, with much higher rates in regions with more developing nations.

De La Rue is the biggest commercial printer of banknotes in the world – in some countries print works are state-owned – and it’s also one of the most historic. The company has been printing banknotes for more than two centuries, while the paper business – De La Rue produces the paper used in notes and passports – is 300 years old. Looking further back, the company’s plant near Bath has been a mill for 1,000 years.

“There’s an amazing longevity and history to this business, so we must be doing something right,” says Sutherland, who was appointed to the top job in August 2014 with a brief to transform the underperforming company. Since then he’s launched a strategy that has involved concentrating banknote printing at three “centres of excellence” in Gateshead, Kenya and Sri Lanka, capable of producing 8bn notes a year. The company also runs the Bank of England’s plant in Debden, Essex.

Just over a year ago De La Rue had its 10-year deal with the Bank of England - believed to be the company’s biggest contract – renewed for another decade. Many believe such a high-profile client gives De La Rue a cachet that helps it win other business, though Sutherland is keen to flag up the company’s constant research and development work.

“We are generally seen as the leading designer of banknotes and passports but we have to be innovative about the security features we introduce because we are in an arms race with counterfeiters,” he says. “The longer a particular feature is in circulation, the more time they have to work out how it is done and how to reproduce it, so we have to be constantly introducing new ideas. We’re a counter-counterfeiting business.”

As well as “covert” security measures known only to central banks and De La Rue itself, there are more obvious features, such as the silver foil running through notes, holograms and ultraviolet inks.

Sutherland highlights a recent introduction called “active”, a visual affect where depending on how you view a note, it shows a different colour. “Think of it as an animation,” says the chief executive, who flatly refuses to even hint at what direction “covert” measures take in the future.

“Producing banknotes is a genuinely artistian process,” he says, adding that De La Rue’s designs will visit and photograph countries as well as meet the locals in the nations they produce money to “understand the essence” of those areas.