Paper Money

Swiss National Bank purchases polymer-paper producer

Switzerland has taken a major step in ensuring that it has sufficient quantities of the substrate on which its bank notes are printed — it purchased the firm that manufactures the special blend.

When Switzerland introduced its new bank note series in 2016, it extolled the virtues of its innovative, three-layer paper and polymer sandwich substrate known as Durasafe. Three of the six denominations, the 10-, 20-, and 50-franc notes, have been printed on the substrate. However, the bank now has a problem as it plans to issue more of those denominations and to issue the 100-, 200-, and 1,000-franc notes.

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The only maker of the paper-polymer substrate it needs is a Swiss company called Landqart AG. In November the company announced that it lost an international order that accounted for 16 percent of its orders for 2017 and 30 percent for 2018. The result was what was described in Switzerland as a liquidity shortage and a “direct and existential threat.”

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The bank said in a statement, “The SNB has decided to acquire the company because, otherwise, issuance of the new Swiss banknote series would not have been guaranteed across the entire production stream. By taking this step, the SNB is ensuring the continued supply of cash and, hence, the fulfillment of its own statutory mandate.”

The bank bought 90 percent of the company, with banknote printer Orell Füssli Holding Ltd. acquiring the remaining 10 percent, for a total purchase price of 21.5 million Swiss francs or $21.76 million.

Landqart claims to provide security paper to 50 countries. The bank says it does not plan to own the company forever. It also has a one-third interest in Orell Füssli. 

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