Rumors about the deal occurred in February 2017. The Sequana group began negotiations with Oberthur Fiducaire on the divestment of Arjowiggins Security BV, including its VHP banknote paper mill. VHP employs 130 specialists in Apeldoorn, Netherlands; its production capacity reaches 6,500 tons. At the end of July 2017, the deal was completed; the sum amounted to € 22 million (plus an earn-out).
The Oberthur Fiduciaire-VHP deal is an example of consolidation in the industry that is prone to frequent bankruptcies and closures. Small manufacturing companies and security printers, not large enough to invest in the hi-tech production capacity, are usually those who suffer the most.
The previous owner of VHP, Arjowiggins Security, has experienced financial difficulties in the last years. Pascal Lebard, CEO of Sequana, commented on the sale: “The measures announced on February 15, the sale of VHP and the rest of the security division, will solve the major difficulties that this division (Arjowiggins, ed.) has been facing for two years.”
The paper mill can expect a stable future now since Thomas Savare, CEO of Oberthur Fiduciaire, had some good reasons to buy VHP (renamed VHP Security Paper after the acquisition).
First, Oberthur is currently planning to expand its global presence and scale. Whatever proponents of non-cash payments tell us, demand for paper money is steadily climbing up, partly due to high inflation in some countries. Federal Reserve Bank of San Francisco said that virtually all countries of the world have increased the amount of cash in circulation in the past decade. This tendency is particularly visible in South Korea (up by 180% from 2006 to 2016), Mexico (139%), Chile (131%), Turkey (130%) and Colombia (109%). In the euro area, this indicator grew by 73%, and in the United States - by 52%.
Oberthur Fiduciaire has to be prepared for steady growth. Ever-closer control of quality management and security processes, which have become the main production strategy of the company, don’t make this task easier.
Although this approach has made Oberthur one of the leading private security printers in the world, ensuring sufficient control over production have never been easy task. From this perspective, the acquisition of VHP Security Paper provided the French company with full access to an early manufacturing stage – production of high quality banknote paper. “VHP Security Paper has been producing and supplying state-of-the-art banknote paper throughout the world for more than 200 years. It was the right choice and the perfect match for both Oberthur and VHP. We are very excited by this new acquisition which will furthermore consolidate Oberthur Fiduciaire’s position as one of the largest and fastest growing banknote printers in the world,” said Thomas Savare.
Another reason for the acquisition was know-hows of VHP Security Paper. Oberthur Fiduciaire has always paid great attention to its R&D activities: “For us, we use a collection of different barriers to fight potential forgers. There are a lot of technologies used to make the paper itself, the threads, the fibers, the printing techniques… It’s a very thorough combination of different security features. And our business is evolving constantly because we have to introduce new security features on an ongoing basis,” Savare noted.
For its part, VHP owns a number of innovative developments in the field of security printing. Among them are unique Bioguard (a treatment against bacteria and fungi for banknote paper), Vision and Pixel watermarks (a new generation of watermark technology), and a number of developments in other related fields. All intellectual property of VHP Security Paper is now owned by Oberthur Fiduciaire. Thus, the French company has further strengthened its arsenal of high-tech developments, and the banknote paper mill retained all the valuable innovations.
The Oberthur Fiduciaire-VHP deal is an example of consolidation in the industry that is prone to frequent bankruptcies and closures. Small manufacturing companies and security printers, not large enough to invest in the hi-tech production capacity, are usually those who suffer the most.
The previous owner of VHP, Arjowiggins Security, has experienced financial difficulties in the last years. Pascal Lebard, CEO of Sequana, commented on the sale: “The measures announced on February 15, the sale of VHP and the rest of the security division, will solve the major difficulties that this division (Arjowiggins, ed.) has been facing for two years.”
The paper mill can expect a stable future now since Thomas Savare, CEO of Oberthur Fiduciaire, had some good reasons to buy VHP (renamed VHP Security Paper after the acquisition).
First, Oberthur is currently planning to expand its global presence and scale. Whatever proponents of non-cash payments tell us, demand for paper money is steadily climbing up, partly due to high inflation in some countries. Federal Reserve Bank of San Francisco said that virtually all countries of the world have increased the amount of cash in circulation in the past decade. This tendency is particularly visible in South Korea (up by 180% from 2006 to 2016), Mexico (139%), Chile (131%), Turkey (130%) and Colombia (109%). In the euro area, this indicator grew by 73%, and in the United States - by 52%.
Oberthur Fiduciaire has to be prepared for steady growth. Ever-closer control of quality management and security processes, which have become the main production strategy of the company, don’t make this task easier.
Although this approach has made Oberthur one of the leading private security printers in the world, ensuring sufficient control over production have never been easy task. From this perspective, the acquisition of VHP Security Paper provided the French company with full access to an early manufacturing stage – production of high quality banknote paper. “VHP Security Paper has been producing and supplying state-of-the-art banknote paper throughout the world for more than 200 years. It was the right choice and the perfect match for both Oberthur and VHP. We are very excited by this new acquisition which will furthermore consolidate Oberthur Fiduciaire’s position as one of the largest and fastest growing banknote printers in the world,” said Thomas Savare.
Another reason for the acquisition was know-hows of VHP Security Paper. Oberthur Fiduciaire has always paid great attention to its R&D activities: “For us, we use a collection of different barriers to fight potential forgers. There are a lot of technologies used to make the paper itself, the threads, the fibers, the printing techniques… It’s a very thorough combination of different security features. And our business is evolving constantly because we have to introduce new security features on an ongoing basis,” Savare noted.
For its part, VHP owns a number of innovative developments in the field of security printing. Among them are unique Bioguard (a treatment against bacteria and fungi for banknote paper), Vision and Pixel watermarks (a new generation of watermark technology), and a number of developments in other related fields. All intellectual property of VHP Security Paper is now owned by Oberthur Fiduciaire. Thus, the French company has further strengthened its arsenal of high-tech developments, and the banknote paper mill retained all the valuable innovations.
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