A license to print money (but keep it quiet)
Posted on 10/20/2014
GATESHEAD makes more money than any other town in Britain, but you will struggle to find anyone who will talk about it.
Sitting a few hundred yards from Retail World on Team Valley is the largest commercial banknote factory in the world.
It’s all bit hush-hush. I can only tell you a fraction of what I saw when I was given a rare glimpse inside De La Rue – the North-East factory with a licence to print money.
This year the Gateshead plant marks its half century.
Nearly 600 people work here, about two thirds of them in the banknote facility that converts blank sheets of paper into dinars, dollars and much more.
The company, which traces its roots back 201 years to Thomas de la Rue’s London straw hat shop, has won scores of awards for its quality and innovation.
The Gateshead factory, which has a sister plant in Debden, Essex, makes about ten million banknotes a day – up to 3.1 billion a year.
Each note possesses a unique serial number and is produced to the most exacting standards. This year alone the firm's North-East will make 75 different denominations for clients across the world.
To keep up with the demand for increasingly high-tech security features, De La Rue has invested about £5.5m in the plant over the past three years.
We often talk about firms in our region being hidden gems. It is part of a business reporter’s job to shout about the great companies that often go unnoticed.
For obvious reasons, De La Rue is about as low profile as a Stock Exchange-listed company can be.
Securing access to this place was no mean feat. Getting a job here is nearly as tough as joining MI5.
Background checks on job applicants are so detailed it means the recruitment process for production line staff can take up to eight months.
Once people secure a job here they are advised to talk as little as possible about their workplace, and are even encouraged to come up with the name of an alternative employer to tell friends or family.
One worker tells me that he had led his children to believe he worked for Pyrex, which was fine until the glassmaker went bust and his kids fretted that dad was headed for the dole queue.
Security here is Fort Knox tight. Again, I can’t disclose much detail, but it’s safe to say that the typical factory visits I’ve been on don’t require multiple body searches.
I’m allowed inside only after I’ve produced my passport, emptied pockets, had my photograph taken and gone through a series of security gates where more ID checks are taken.
Across its production sites De La Rue makes banknotes, stamps, secure documents, such as passports, as well as security protection tags. The next time you buy a posh bottle of whisky, or an electronic device, there is a good chance that the security sticker proving its authenticity was made by De La Rue.
The first thing you notice inside the plant is the light. It’s a gloomy early autumn day outside, but the factory floor is as bright as an operating theatre. Being able to spot potential flaws before the production process goes too far can save the company a small fortune. It’s warm too – unusually so for a factory – as the air conditioning is set precisely to match the air temperature of the factory where De La Rue makes its paper. This prevents the sheets from shrinking or warping.
I’m standing on the factory floor with a member of the production team whom we shall call “Niall”. In front of us, sitting about the height of a wheelie bin, is a 3ft sq pallet of blank paper – known in the trade as substrate – which will soon pass through a series of intricate processes to make notes for an island nation 6,000 miles away.
“If this pile was converted into £10 notes how much would it be worth?” I ask Niall, who leafs through a few reams, makes a quick calculation in his head, and replies: “About £4.5m.
“But once you’ve worked here for a while, you stop looking at it as real cash,” he adds.
“We respect our clients and are completely focused on giving them the highest quality product, but to us at the end of the day, it’s just Monopoly money,” he says, as I stare wide-eyed like a golden ticket guest of Willy Wonka.
I’m steered towards a high tech printer – that cost a few reams itself – thrumming away gently as it makes notes that will soon be accepted in exchange for a glass of beer or a litre of milk.
Beside the machine sit sheets of uncut notes that have gone through the first stage of printing. It’s only when I look at the partly finished product that I realise how complex this process is, and how the notes themselves are mini works of art. Some bear deliberate faults to help central banks trace forgeries; or luminous characters, textures, holograms or flashes of vibrant colour injected onto the paper. Some are embossed with images of statesmen or animals that closer investigation reveals are made up of tiny words. The detail is dazzling.
The challenge facing De La Rue’s skilled team is to pull off a delicate balancing act to delight their customers, fox the most determined of forgers, and do it on an industrial cost-effective scale. It is a business that blends craft with science. Put simply – they must find a way to make money that makes money.
Last week, the firm’s share price plummeted nearly a third after it issued a profits warning amid tough market conditions. Printing a few extra quid to stash in its own coffers wasn’t an option.
To drive efficiency and quality the Gateshead plant has adopted ideas from the car industry. One wall is covered with the kind of inspirational mission statements, flow charts and key performance measures that you’d find at Nissan in Sunderland.
Away from the main production area are small side rooms – one contains washing machines testing the durability of notes left in the pockets of jeans – while another is an oasis of calm where craftsmen tap away to remove tiny blemishes from the surface of the metal printing plates that bear the notes’ original image.
We pass a printer churning out this year’s Christmas stamps, and head to the end of the production line where finished blocks paper, now worth thousands of pounds, are being fed into a guillotine, before being stacked on pallets awaiting dispatch.
Bound into bundles they suddenly look less exotic, more real. The people who will use them will probably never give the details on the notes a second glance. They will barely notice that the grain on one side is more pronounced, or that the ink on a note fresh from a cash dispenser will smudge if rubbed hard enough.
They certainly won’t think about Gateshead. But they should.
This article was originally written by Andy Richardson and was published October 1, 2014 on the Northern Echo website, "Business: Spotlight On" section.
This is a guest article. The thoughts and opinions in the piece are those of their author and are not necessarily the thoughts of the Certified Collectibles Group.