Saturday, July 2, 2022
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    InterviewThe alternative to paper notes

    The alternative to paper notes


    Polymer notes are an alternative to paper notes and African countries have become among those that have picked up on the trend. CCL Secure is a company that manufactures and supplies the polymer banknote substrate Guardian for over 25 countries around the world. The Reporter’s Tewedaj Sintayehu deliberated on the traits, significance and possibilities of adopting the notes in Ethiopia with the Business Development Manager of CCL Secure in Australia, Hakam Saadi. Excertps:

    The Reporter: Would you briefly introduce us to CCL Secure?

    Hakam: CCL Secure is part of CCL Industries, a publicly traded company on the Toronto Stock Exchange with a market capitalization of USD 10 Billion. CCL Secure is the world’s number one supplier of polymer banknote substrate with GUARDIAN which was first launched in Australia in 1988. GUARDIAN is made from Clarity C, a BOPP film exclusively developed by our sister company, Innovia Films. CCL Industries operates 190 production facilities in 40 countries and employs over 22,000 people. CCL Secure has dedicated manufacturing sites in Australia, Mexico, and the United Kingdom.

    The Reporter: What are polymer notes and what is their difference with paper notes?

    Hakam: Polymer banknotes are made with BOPP film (polymer) rather than cotton paper. Unlike cotton paper banknotes, they last 3-5 times longer, are 100% recyclable, and remain cleaner and more presentable in circulation – in fact they can be wiped clean with a damp cloth. They are proven more secure (less counterfeits) in every market they are introduced. Cost savings of over 50 percent can be expected over the life of the polymer banknotes versus paper due to the longevity.

    The Reporter: How durable is it when dipped in water and chemicals? Is it easy to tear? Are they foldable enough to be kept in pocket?

    Hakam: Polymer banknotes are impermeable and not impacted by water or the normal array of chemicals. They are highly resistant to initial tears and cannot be torn by hand unless an initial tear is initiated with a sharp object. They are foldable and suitable to be kept in pockets or wherever as they are used in many markets where wallets are not customary. They can be pressed flat again if desired.

    The Reporter: Counterfeiting is one of the major challenges of Ethiopian currency notes. How would the polymers help this cause?

    Hakam: The Bank of England did a three-year study of different banknote substrates before launching the £5 on GUARDIAN in 2016 followed by the £10 on GUARDIAN polymer in 2017. During that study, the Bank of England interviewed all the Central Banks using GUARDIAN polymer banknotes.  Every Central Bank using polymer and recording levels of counterfeit noticed a decline in banknote counterfeits.  This is also the experience of the Bank of England having now launched the £20 and £50 on polymer.


    The Reporter: Wouldn’t the plastic like nature of polymers make it harder for the seeing impaired to identify some features on the notes?

    Hakam: In fact, the opposite.  A tactile emboss of dots – like brail – is introduced in most new polymer banknotes which will allow the seeing impaired to identify the value of the Banknotes – even in Canada where all the banknote denominations are the same size.

    The Reporter: Aren’t polymer notes more expensive to print than bank notes? How can a poor country like Ethiopia afford it? Would it require changing ATM machines?

    Hakam: Polymer banknotes are not more expensive to print than their cotton paper alternatives. In fact, although the substrate is slightly more expensive, a Central Bank would pay about 25% more per banknote, but they will last about 4 times as long. Savings in Ethiopia for a whole series of polymer banknotes could potentially reach circa. USD 250 million over 10 years. Whenever a new banknote is introduced, a new design – whether on paper or polymer, would require some minor software changes to recognize the new notes. No hardware changes are required to ATMs, or counters or other machines.

    The Reporter: Tell us about other countries that have used polymer notes.

    Hakam: GUARDIAN Polymer banknotes have been issued in more than 170 denominations in over 30 countries. 11 countries have issued their full series of notes on GUARDIAN including Australia, Brunei, Canada, Costa Rica, England, Mauritania, and New Zealand.

    The Reporter: Trust is a big issue in printing currencies. What is the reputation of your company like? What sort of complaints have you received?

    Hakam: CCL Secure was a founding member of the Banknote Ethics Initiative (BnEI), an initiative established to provide ethical business practice, with a focus on the prevention of corruption and on compliance with anti-trust law within the banknote industry. CCL Secure has helped Central Banks and Issuing Authorities around the globe transition from paper to polymer. We have a strong reputation for working in partnership with Banks and printers to ensure a seamless move to polymer. With 3 sites, 4 production lines, and our own base BOPP supply from our sister company Innovia Films – CCL Secure is the most trusted polymer banknote supplier.

    The Reporter: What improvements could polymer notes use?

    Hakam: The key improvement would be to be better understood. Central Banks are conservative and often slow to adapt to change. It has been said that polymer banknotes are now at the tipping point with the Bank of England introducing polymer on their full series, and most Central Banks are in the process of consideration or implementation of new polymer designs like recent launches in Saudi Arabia (SAR 5), Egypt (LE 10), Angola (AOA 200, 500, 1000, 2000), Namibia (NAD 30) just to name a few.

    The Reporter: Why do you think it is recommendable to Ethiopia?

    Hakam: Ethiopia is a large country with harsh conditions that are very demanding for any banknote – whether paper or polymer, and GUARDIAN can make it easier for the Central Bank to keep a clean note policy (keep banknotes circulating in good condition), reduce counterfeit, recycle instead of landfill or incineration, and save hundreds of millions in USD all in foreign currency. The Birr 5 would be ideally suited for a new banknote called SPARTAN – designed for the coin/note boundary and build for the world’s harshest conditions. Based on public information and on our own hypotheses and assumptions, we predict that a switch to SPARTAN could generate an accumulated procurement cost savings, within 10 years and all in foreign currency, of USD 30 million on the 5 Birr denomination alone.

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