We operate in three main markets – currency, identity and product authentication – all of which have strong prospects for long term sustainable growth.
Globally, the total amount of cash in circulation has been growing at c4% a year over the past decade and is expected to continue to increase at a similar rate in the future years. GDP and population growth, as well as the replacement of worn notes, are the main drivers of demand for cash.
Most banknotes and the substrates on which they are printed are produced by state owned print works and paper mills of the respective issuing countries. The rest of the demands is met by commercial banknote printers and paper makers.
Around 11% of the c172bn banknotes issued globally in 2015 were printed by a hand of commercial printers. We are the clear market leader here, with 27% market share.
97% of the banknotes in circulation are printed on cotton-based paper with the remainder on next generation substrates such as polymer. Around 45-50% of the substrate market is supplied by commercial paper or polymer manufacturers. We are one of the top three commercial paper makers, with market share ranging between 12% and 15%, and one of the only two polymer substrate providers in the world.
In recent years, customers are increasingly seeking to access the benefits of added-value security features such as threads and holograms. Almost all countries buy security features with IP licences from the commercial market. We are the third largest commercial supplier for security threads and the fourth largest for holographic features.
The global identity market, including passports, ID cards, and the associated digital solutions, is valued at around £3.7bn and expected to grow at c6% a year. More than half of the identity market is available to commercial manufacturers in forms of printing or individual components.
With an annual growth of c8%, the passport market remains attractive. Customers increasingly value security features and the systems and services surrounding the physical product. The transitioning from Machine Readable Passports to chip-based ePassports further drives demand for full integration of end-to-end solutions.
The national ID market is expected to grow at c5% a year to £3.2bn in 2020. Technological advances in recent years have enabled new types of ID schemes, combining traditional ID functionality with payment and cross border identification.
Product Authentication Market
Globally the significant increase in counterfeit goods and illicit trade means that governments are losing billions of dollars in tax revenues. At the same time, legitimate businesses and brand owners are being undermined and consumer confidence is being eroded.
Both the tax stamp and brand protection markets are highly fragmented, with most operators offering only partial solutions such as serialised labels and tamper-evident packaging. However, there is a growing trend towards integrated, end-to-end solutions that provide a combination of highly secure labels and unique ID together with systems that can track, trace and authenticate products throughout the supply chain. Online shopping is also driving authentication through a touch point of consumer’s smartphones.