It was 30 years ago this year that the first polymer banknote was issued in Australia, and that note was invented, trialled, and issued by Note Printing Australia (NPA) and its predecessor organisation, Note Printing Branch. Coinciding with Australia’s Bicentennial celebrations, the new note made an enormous statement about the nation and has been a point of national pride ever since.
NPA nurtured the commercial origins of the polymer banknote business which is today known as CCL Secure. Since the early 90’s, polymer substrate has steadily worked its way into the banknote market, with the entry of DLR also giving a major push to the adoption of polymer worldwide. Currency News spoke to NPA’s CEO, Malcolm McDowell, about the tumultuous early years, the polymer ‘revolution’, and the future of the organisation.
Q: Can you share some insights into the 20-year development period for polymer substrate and how it came to be issued?
A: When Australia moved to decimal currency in 1966, counterfeiters had an unprecedented opportunity to forge high quality banknotes while the public was getting used to the new currency. As a result, Australia had a 400ppm+ counterfeit rate on the $10. In 1967, Herbert ‘Nugget’ Coombes, the first Governor of the Reserve Bank of Australia (which was formed in 1960) assembled a think-tank at a well-known alpine retreat called Mt Thredbo, and it was there during a brainstorming session that plastic notes were first suggested. A young scientist working for the CSIRO (the Government’s R&D division) David Solomon, was intrigued by the idea and took up the challenge with support from management. It took 20 years of development involving material science, the development of new inks, learning how to apply OVDs to plastic, a secret printing plant in Port Melbourne, and the production of $3 and $7 test notes. The organisational breakthrough came in 1982 when David convinced the new RBA Governor, Bob Johnston, to participate in a blind feel test of a polymer note versus a paper note. Bob couldn’t tell the difference, and in considering the enormous body of the work the CSIRO had put behind the technology, agreed to employ scientists at NPA to begin the technology transfer. In 1987, the RBA paid the CSIRO A$8 million for the rights and the technology.
Q: What was the impact with the Australian public at the time?
A: By all reports, it was mixed – a great sense of pride but also if you understand the Australian sense-of-humour, great enjoyment in finding and making fun of a weak spot. In this case, there was great fascination with the OVD which was the first to appear on banknote, however the advent of the scratch-off lottery tickets saw many people for amusement or curiosity use coins to scratch away the foil on the new note. In the short-term, the OVD received extra coats of varnish to better protect it but the long-term solution was the use of a corona-discharge unit to enhance the surface energy of the polymer film which led to much higher levels of adhesion.
Of course, this original note is a classic collector’s item. The RBA sold 850,000 commemorative packs of this note for A$14 each which returned more than half the Government’s investment from the previous year so it was a great financial success for the RBA. The media of the day focused heavily on the design, rather than the world-leading technology, and it is fair to say it turned out to be the most iconic banknote design in Australia’s history. Nothing else comes close in my opinion.
Q: How and when did NPA begin operations at its current location?
A : The Note Printing Branch as it was known then was operating across five floors in a building in the inner-city suburb of Fitzroy. In the 70’s, management realised they needed a purpose-built facility and in 1981 the current high-security site in Craigieburn was completed. Today, this high security site includes NPA’s 40,000m2 main production building and a 3000m2 staff centre, as well as the RBA’s recently completed National Banknote Distribution Centre, and CCL Secure’s polymer substrate production facility. Right next door to our site is the Innovia Films’ production plant that manufactures the polymer film for CCL Secure’s Guardian® polymer substrate – one of only two sites in the world. Taken in its entirety, with every facet of the polymer banknote printing process accounted for in this one area, the Craigieburn site is the world’s most unique banknote precinct.
Q: After 300 years, bringing an alternative banknote substrate to the market must have been challenging. How did NPA help that adoption?
A: Yes, it was a radical disruption to the market and while the industry took decades to accept polymer was here to stay, there is no doubt in my mind that without the ownership and support of the RBA and by extension Note Printing Australia, polymer banknote technology would never have been adopted worldwide. The RBA’s patronage, and NPA’s technical know-how and printing experience, gave polymer banknote technology the stamp of approval and performance delivery needed to be adopted by other nations. PNG, New Zealand, Singapore and Brunei were early adopters of polymer banknotes, all of which were printed by NPA. The Banco de Mexico’s commitment to polymer and its ownership stake in a polymer substrate production facility was also a milestone moment.
Q: How do you account for the ‘revolutionary period’ where polymer seemed to breakthrough with adoption of polymer in Canada and the UK?
A: In reference to your previous question, this development was a moment of true acceptance for the industry. Over time, I think the facts around polymer banknote performance became Irrefutable and after 20 years in the market led by other influential central banks such as Australia, Mexico and New Zealand, these banks decided the time was right. Like the RBA, the Bank of Canada and Bank of England are both highly resourced, highly technical, and are looking for products that meet the highest standards and requirements. Both went through a comprehensive process of substrate selection and decided polymer was right for them. Happily, both are now having extremely positive experiences with their new banknotes.
Q: With this history, what does NPA now offer the market?
A: A great deal! We’re an organisation that cares deeply about the well-being of the people and nations that use our banknotes and passports. As a 100% subsidiary of the Reserve Bank of Australia, NPA has built its policies and normal business processes around exacting G20 Government standards that make us well placed to deliver banknotes of any denomination and to any security level to the highest quality. NPA focuses on creating outstanding customer experiences by understanding and addressing specific challenges and problems to come up with banknote solutions that make our customer’s lives easier. Across the last decade, NPA has invested for the future and today has one of the world’s most advanced print lines, the capability of which is evident with Australia’s NGB series. NPA regularly brings first time technology to polymer banknotes based on our strength in industrialising innovative security technologies.
Importantly, NPA’s unique history in producing highly complex polymer banknotes has allowed the organisation to develop leading-edge know-how and experience in its design, development and manufacturing processes.
Q: How does NPA structure its currency production and management in Australia?
A: With a senior management team covering all the usual functions, as CEO I am accountable to NPA’s Board of Directors who represent the interests of the Reserve Bank of Australia. Under the leadership of a single Head of Operations, banknote and passport production operates as separate business units. From a banknote perspective NPA offers the full suite of services from design, prepress and plate making through to production, quality assurance, single note inspection and automated packaging. We also have high grade vaults for ongoing secure storage within the secure production facility and overall site.
Q: What’s next for NPA, particularly after the new Australian series is complete?
A: The current Australian banknote series is in full swing and understandably this work accounts for the vast majority of our capacity, however we are still printing for other central banks. In the future, NPA plans to maintain a strong presence across the world in bidding for and winning some extremely interesting and exciting banknote series and projects. We have a lot of advice and experience to offer central banks who are looking to create a banknote or banknote series that will remain strongly counterfeit-resistant and highly functional for a minimum 12-15 year period.
We also produce the world-class chip-enabled Australian ePassport for the Department of Foreign Affairs and Trade (DFAT), under a long-term supply agreement. We will be looking to develop an export market for passport booklets and associated service opportunities, particularly in our region.