British Pound Producer Now Seeks Competitor as Partner
We may not know the company name De La Rue, but we rely on what they produce every day. Holiday makers in particular will be familiar with several items produced by the UK company: the pound Sterling in their wallets and their British passports. Also, any alcohol or tobacco purchased will sport the security and tax stamps the British company manufactures.
Since De La Rue is the world’s largest currency manufacturer, the odds are high that whatever currency you exchange GBPs into, you’ll be pocketing a currency produced by De La Rue. The newly revealed Winston Churchill polymer pounds and the current currency are their products, however 85pc of their business goes to foreign markets. They undertake the design, production or issuing of the currencies of nearly 150 countries. The company makes so many banknotes a week that if they were stacked in a pile they’d be twice as high as Mount Everest. Now De La Rue is scaling back their own enterprise as the company’s fortunes face what has been their constant companion: fluctuating markets.
Currency Company Competition
In May the world’s largest banknote printer sold its cash processing business in a deal worth up to £3.6m in an effort to restructure and save costs. The cash sorting machines are used by the Bank of England and central banks worldwide to count and verify currency. They are also utilised around the globe to spot and cull counterfeit and discontinued notes to keep them out of circulation.
Printing currency is not as lucrative as it once was, and the demand for banknotes will decrease over time - especially with the polymer banknotes the company is increasingly producing which last much longer than paper does. De La Rue, facing fierce industry competition, is now in talks about forming a partnership with a competitor in order to battle what it terms “industry overcapacity”. Their long term rival, German company Giesecke & Devrient, is a firm De La Rue had once considered taking over but the deal was rebuffed by the Germans who, at the time, found it difficult to consider having their currency printed in the UK. Having closed their Malta site, De La Rue now prints banknotes in Gateshead in the UK, Kenya and Sri Lanka.
British Currency History
One of the most historic British businesses, the company has been printing banknotes for over two centuries. They have produced the paper used in banknotes and passports for 300 years and the company’s plant near Bath has been a mill for 1,000 years. Guernsey-born founder Thomas de la Rue moved to London to establish his stationary and printing shop in 1821. The businessman initially specialised in producing playing cards, but in 1855 began printing tax and postage stamps. In 1860 the company was printing its first banknotes for Mauritius and would go on to produce notes for the colonies as well as other emerging nations. In 1995 the company acquired Portals which was the world’s leading banknote paper manufacturer, having produced banknote paper for the Bank of England since 1724.
Although the company had produced currency for many countries, it wasn’t until 2003 that De La Rue won a seven-year contract to take over the running of the Bank of England’s printing plant in Essex; setting its course towards producing the pounds it does today.
Worth the Paper It’s Printed on
After a century of global growth, by the late 1950s De La Rue had expanded to 10,000 employees working in 24 factories in 14 countries. By 2009 the workforce had shrunk to under 4,000 as the company adjusted to the market’s currency needs against increasing competition. In 2010, while printing Indian rupees at their Overton plant, the company was forced to cease production when poor quality notes were produced. Confidence in the quality of De La Rue’s security paper was savaged when it was revealed that cost cutting measures had led to the inferior quality paper. The lapse in standards cost the company at least £35million. The danger was that if some of the poor quality paper notes were in circulation then counterfeiters could have a field day comparing it with high quality paper in order to master the security measures necessary for their forgeries. This is an industry where reliability, quality and reputation are essential to the company’s Central Bank customers.
Artisan Designers and Complex Security Measures
The process of creating a banknote begins with the De La Rue designers visiting the country, photographing its iconic places and speaking with the locals in an effort to capture the essence of a country in its currency. Evidence of this artisanal process is epitomised in the vivid and beautiful banknotes De La Rue designed for Fiji on polymer paper (which make it sturdier in the humid climate). Incorporating security measures like a holographic window with historical elements like a Fiji warrior make the note secure from counterfeiting as well as demonstrating a distinctive expression of national pride.
Security is a constant focus for the company, as they are always seeking new ways to defeat counterfeiters of both banknotes and passports. They frequently change features so that there is less time to replicate it. Colour changing is a dominant security feature, both in print and in thread bound into paper, because it is difficult to duplicate. Colour changing elements also offer design flexibility and can be combined with magnetics (that help machines read them) and fluorescent features. There are security elements that are obvious, like silver foil incorporated into notes, ultraviolet inks and holograms but there are also secret security measures that are known only to central banks and the security experts at De La Rue.