The Korea Minting, Security Printing and ID Card Operating Corp. (KOMSCO) will look to export anti-counterfeiting and safety related technologies as it seeks to find a new growth engine, its chief executive said Monday.
"The amount of manufacturing of bills has plunged sharply since 2009 when the country began to supply the high denomination 50,000 won note. This resulted in a sharp decline in sales in past years," KOMSCO CEO Kim Hwa-dong told reporters at a lunch meeting.
KOMSCO produced 2 billion notes in 2007, but the figure nosedived to around 600 million notes recently. If there are no countermeasures, the declining note output will weigh on the company's bottom line, the executive said.
"In an apparent crisis, earnings which arise from notes halved to 28 percent of the company's total sales from 60 percent during the mentioned period," he said. "That's because people increasingly prefer to use credit cards for purchases rather than spending cash. It is further driving down sales."
KOMSCO posted 427.6 billion won ($395 million) in sales last year, little changed from 427.1 billion won a year earlier. Exports fell to 34.9 billion won from 42.5 billion won during the same period, company data showed.
This year, it is targeting to report 470 billion won in sales helped by 66 billion won in exports.
To achieve that goal, KOMSCO is aggressive in exporting papers used to make local notes and papers used for public documents largely in emerging markets such as Indonesia and Papua New Guinea, the CEO said.
"We are in talks to export our products and technologies," he said without elaborating.
KOMSCO signed a deal with the Indonesian government in February to supply 8 million "security papers" with enhanced security functions for 880 million won over the next three years, he said.
KOMSCO has produced bank notes for the Indonesian government in the past several years, but it is the first time for the company to provide the security papers to a customer outside the country.
Moreover, "We are also exporting Korea-made gold bars to a local home shopping channel in Indonesia next month as part of our business diversification strategy," he said.
The 50,000 won notes went into circulation in June 2009. But many of the high-value notes are presumed to be kept by tax evaders or those who want to keep cold cash on hand due to record-low interest rates and growing economic uncertainties following the 2008 financial crisis.
KOMSCO, set up in October 1951 as the sole producer of Korea currency, has developed anti-counterfeiting technology in the field of currency, national identification, security products and quality certification of gold bars.