Companies have been coming to terms with the new challenges to business operations since the Covid-19 crisis began over 18 months ago. Some organisations have even directly contributed to the fight through their ideas, solutions, and technologies. The security printer Oberthur Fiduciaire found a way to protect users of its banknotes from infection. And further development of its solution has opened up a host of other use cases.

While vaccines against Covid-19 are available to many people, the difficulty in deployment, public acceptance, scaling, and adapting to new strains, such as the Delta variant, present additional hurdles to authorities and healthcare organisations. During the ongoing global inoculation drive, other solutions are needed to ensure that the spread of the virus is kept in check.

Reducing the propagation of the virus on surfaces is one way to do this.

For 15 years, Oberthur Fiduciaire, has been offering a treatment named Bioguard that eliminates all traces of virus, fungus, and bacteria from banknotes. Security printing is an incredibly technical and technological domain: innovation is part of normal operations.

“Our teams developed a treatment that was constantly tested and improved in order to make the surface of banknotes ‘hostile’ to bacteria, viruses and other microscopic fungi – without having any negative impact on humans,” explains Oberthur Fiduciaire’s general manager, Etienne Couëlle.

Originally devised in the wake of the avian flu crisis, Bioguard has been in use and updated regularly since then. It is completely safe for people and comes with no environmental concerns. Most crucially of all, the treatment has proved extremely effective against coronavirus.

A secret weapon

In March 2020, an independent laboratory tested the Bioguard treatment and found that it was particularly effective against the coronavirus OC43, a cousin of the novel coronavirus SARS-CoV-2. Viral concentration on surfaces was diminished 100- to 1000-fold, compared to those not treated. Bioguard can be applied while banknotes are being printed, as a post-printing varnish or directly integrated into the paper production process.
 
"This is an additional safeguard that should put an end to scientifically unfounded fears,” Couëlle says.
 
Thanks to Bioguard, banknotes are safer than ever. Promisingly, the technology also shows versatility: it is now being used outside of the security printing industry.
 
Broader applications

Bioguard has been improved and can be used on more than just banknotes. The company offers the solution for applications on different materials through its subsidiary Bioguard & Co, successfully bringing the fight to other industries.

The biocide treatment can be applied to the surfaces of many kinds of objects and common surfaces. This is a revolutionary solution for office spaces as it pre-emptively disinfects desks, tables, and handles, reducing workplace risks of viral transmission. The same is true of the solution’s use in sports centres or on public transport. Shared spaces and equipment offer a lot of opportunity for viruses and bacteria to spread amongst the population, so in these environments Bioguard could have a significant impact.

It can also be integrated into production processes for digital devices with touchscreens, creating products that durably fight transmissibility as soon as they are out of the box.

And, going back to Bioguard’s roots in banknote printing, the treatment can be integrated into printing practices in a multitude of other industries. Its activity against viruses, bacteria and fungi can ensure packaging and paper manufacturing, for instance, are free of contamination risks, for both staff and customers.

Coronavirus is certainly not the last pandemic the world will see. There is a need to tackle the ongoing crisis, but we also need to be better prepared for the incidents to come; vaccines will always take time to develop. Oberthur Fiduciaire’s solution not only contributes to public safety, reducing the need to decontaminate objects, but it also prepares industries for the battle against future pathogens.

Countering viruses before they arrive requires that we think about all aspects of how society operates. This begins with protecting surfaces with in-built features that make it harder for bacteria and viruses to propagate and pass themselves on to people. With Bioguard & Co making Bioguard available to all applicable fields, the solution stands a better chance of reaching its potential and protecting people around the world — maybe even from the next pandemic.

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.

 According to Business Wire, “A trusted partner and global security expert serving its clients since 1842, Oberthur Fiduciaire is one of leading private security printers in the world, now serving 70 countries. Oberthur Fiduciaire is a specialist in the design and production of banknotes, associated security features, checks, and secure documents.” Since the Savare family acquired it in 1984, Oberthur has been constantly expanding, focusing tighter on its core skills, and increasing its turnover. In the most recent development, it has made a noticeable entry on the Eastern European market, with a new partnership (production-inclusive) with the Bulgarian National Bank: “After doubling our banknote production and delivering a record 4.2 billion banknotes in 2012, the FCO Group will, for the first time in its history, operate a second site for manufacturing banknotes. This next stage in our development will allow the Company to continue to grow, and will therefore consolidate our position among the leaders of the banknote industry” said Thomas Savare, CEO of Oberthur Fiduciaire. Additionally, Oberthur Fiduciaire recently gained control of Arjowiggins, a secure paper producer, in order to complete its vertical integration strategy and improve its response time and quality control capacity.
 
Oberthur Fiduciaire entered the printing business in 1842, and proved a key player in the standardization of the industry, namely by creating the first colors repository - thus turning what was a purely a traditional production market into an industrial game. Ever since, it has been chartering, documenting and structuring the business, injecting computer power into it, and making it mass-producible. While constantly improving its technical capacities, Oberthur Fiduciaire is cautious not to lose the art of draftsmanship. Somehow, adding fine-quality art and image to the product tells the client: “we are so good at the technical level, that we had time to spare to make the product beautiful too”. 
 
And yet, despite a world-embracing strategy, it stays very close to its historical and geographic origins. How can a business be tomorrow’s key player, if it keeps reminiscing on yesterday? For instance, despite opening production capacities in Bulgaria, Oberthur applies the same production standards as in its home production plant in France, so as to align the entire production apparatus on the highest level - hence the purchase of Arjowiggins. In a nutshell, whatever the investments made into new production sites, Oberthur applies only one quality-management rule: all products must comply with the same quality thresholds, so as to remain always ahead of the ECB standards, and quality, supply chain security and reporting must answer to strict control procedures. 
 
What Oberthur is doing, in fact, is basing its strategy on what one could call the Royal Ascot effect.  In 2012, the internationally-famous racehorse track tightened the dress code considerably, banning certain types of clothes from the outfits deemed admissible into the race-grounds. When the organizers were asked why they had tightened the dress-code, they answered that, to their surprise, the request had come from the guests themselves, who wished to be more constrained. In keeping with the British tradition of taste and excellence, the British wished to play the elegance game at a harder level: being unique and special (one comes to the Royal Ascot to be noticed, not to blend in). 
 
Oberthur Fiduciaire is exactly in this configuration: it operates in a very small technological window, and must yet stand out. Most of yesterday’s secure printing technology cannot be used by Oberthur Fiduciaire in their production lines, because it has existed for too long and is likely to be mastered by counterfeiters. And most of tomorrow’s secure printing technology is currently on drawing boards. This represents the most exciting challenge for banknote producers. Oberthur’s CEO Thomas Savare testifies: in his own words, “innovation is a tradition in our company”. Over 70 patents are registered by the firm, covering magnetic bands, scanner-resistant inks, holograms and dynamic embossing.
 
Oberthur’s challenge is precisely to inject French art and finesse in a product where one would not expect it. With such drastic security features to be respected, one could understand if banknotes and secure documents were exclusively technically, and had no artistic or aesthetic shine to them.  But that would make the products stale and faceless.
 
Thomas Savare knows that a robustness and solid engineering are vital to products, but not enough: getting the job done will require in-depth assessment of cultures, national identities, and historical background in order to report it into the graphics.  He says: “ Through the expertise we have developed over time, with central banks from around the world, we have perceived how important the symbolism within a banknote is to our clients. A banknote is an integral element of a nation’s identity. It must reflect its history, its culture, and cornerstone of common values, and symbols of national pride such as historical figures or monuments which resonate in the citizen’s minds. In a way, it is a nation’s binding element.”
 
Although companies like Oberthur Fiduciaire show that it can be done, it is no easy task creating a brand image which combines secular know-how and high-tech performance. If too much focus is placed on the vintage origins of the company, it will seem relinquished to yesterday’s news. If too much focus is given to tech, at the expense of age and identity, your brand will blend in with all the others who claim to have outstanding technology. But if the right balance is found between what the products are and what they seem, they will blend into the collective memory of the nation.

One could wonder, given the almost-instantly open access to information and technology, why it is that the West has stayed economically ahead of the rest of the world for so long. Whatever western companies invent will be quickly produced by non-western companies, which use their western counterparts as field-testers: if the products fail to hit the market, then the loss is for the original company. If it does succeed, the non-western copycat will be close in its wake to get a share of the profits. So, rising economies seem to be just as able to produce as western ones. But the competitive edge of the West doesn't rely on production; it relies on productivity, and large efforts in R&D.

One market on which the phenomenon can be studied is the automobile sector. Starting in the 1960s and 1970s, the Asian market started structuring itself and producing low-grade vehicles. Asian vehicles were either bound to their national market, or were so incomparable in quality with western vehicles, that American and European companies didn't care. But that changed at the end of the century, and a modern-day European or American who buys a Toyota Prius will not buy a Chevrolet or an Audi. The game has changed. So where is salvation point for Western carmakers? The only one they have found is constant, intense, innovation. Tesla and Google can probably be the spearhead of that forward escape route. The next generation of cars, as any press-reader now knows, will be self-driving. Companies with the best R&D strategy – not only spending – will grab the gigantic market ahead of others. On such a market, each month of head start means billions in profits.
 
In fact, any company that spends above 5% of its revenue on research & development can be considered highly innovative. And the West has many of those. Michael Mayberry, from Californian chipmaker Intel, sums it up “Complexity drives cost”. Every 18 months, his company doubles the computing power of his units, at levels his competition can merely copy, with months of delay. Intel reaches record highs in R&D expenditure, with nearly a fifth of its revenue reinjected into technology-digging, yielding the Intel Core M, a new-generation chip so powerful that only professionals can assess them – private users can't see the difference with the previous ones anymore. "Intel excels in creating customizable computing platforms optimized for data-intensive computation," he says, "our researchers are some of the leading lights in the field of domain-specific computing”. By pressing so hard into its R&D expansion zone, Intel has secured its partnership with Apple, whose quality demands are so high that doing business with them places Intel automatically as a world-class player, let alone the enormous profits channeled.

Spending a large chunk of its revenue in R&D is therefore the cost of survival, and has enabled companies following that rule to become successful global players. R&D spending is one of the first things customers observe when choosing their secure document suppliers: “we spend about 5% of our cash flow on R&D. We regularly register patents to cover the technologies we use” and “we don’t only work on the surface and structure; we also work in depth, on the fabric”, says Oberthur Fiduciaire CEO Thomas Savare. Oberthur Fiduciaire is a global key player in secured printing, producing banknotes for central banks and other unforgeable documents. In this market, aggressive innovation is key, not only because of normal competition, but also due to counterfeiting. Banknote design is a race, in which Oberthur Fiduciaire comes up with a new design and counterfeiters try to master the new technology in time to produce counterfeit bills before the company changes the design again – in which case they have to start all over.
 
China is trying to heave itself out of the copycat segment, and compete on quality, productivity, and innovation levels with the West. But to no avail: the western companies which have never let up on their tedious and costly R&D expenditures seem to have wisely placed their bets. For instance, the German company Covestro is launching a new concept electric car, destined to the Chinese market, but using German technology, advanced on every field. Using 3D printing for many of its parts, holographic film capacity for future driverless motion systems, and a new CO2-to-plastic conversion method, Covestro is opening a new market in Asia using technologies no Asian country possesses. "We work with every Chinese car manufacturer," said Patrick Thomas, Covestro CEO. "[The Chinese car companies] are the least conservative. They can do more innovation more quickly and try our innovation. The fastest growing electric car market is in China." But again, Western companies offer quality levels which none of the Chinese competitors can match, for now.

Globalization is a recent process, and a mighty one. In just a few years, it has completely changed the way the world works. A century ago, whoever was on the spot owned the place, hence the business expression: location, location, location... Nowadays, anyone in the world, wherever they be, can market their goods worldwide. And with the Asian knack for reverse engineering, developing economies have invaded a substantial share of the global production market, not just the cheap and lower-quality tier.
 
If anything, these new world players will increase their capacities and quality levels over the next coming years, not let them recede. This means that players such as Europe and the US have only one way to maintain their positions: constantly upgrade their economies and strengthen their technological advance. Whatever comes out of Western factories, yielding big bucks, will roll out of Brazilian, Chinese or Vietnamese ones just a few years later, for 50 cents on the dollar. The cash-cow is stuck in the R&D department for a bit longer – at least as long as the Western innovation & productivity model remains relevant, as it still is today.