This is the second part of an interview with BörsenRadio Network AG conducted on July 20th, 2010. Alfonso Ciotola is speaking about the company’s mill in Landqart, Switzerland which produces security and specialty papers such as banknotes. He is explaining what makes the “banknote of the future” so special and how this is supposed to deter counterfeiting.

As manager you have to travel a lot. What does your week look like?

I spend about 50% of my time in our Landqart mill in Switzerland, where we produce banknote paper, about 30% here in Dresden, and the rest elsewhere. We have built very strong management here in Dresden, which is able to represent me well.

Let’s talk about your other mill. I’m holding the “banknote of the future” in my hands, that’s exciting. It doesn’t have value yet but it’s a glimpse into the future. It has transparent holes, what are they for?

Those aren’t holes, but transparent windows. Central banks have been wishing for banknotes with transparent windows for a while, because they are really hard to copy. Together with the Swiss National Bank, for which we are the sole provider, we developed a technology. This technology allows us to create a material which contains two layers of banknote paper and a polymer in the middle, and to embed those transparent windows.

Is this still a dream of the future or will it be our real money soon? How often do central banks actually renew banknotes?

These aren’t dreams of the future. We’ve already installed the machine in Switzerland, and we have concrete projects not only with the SNB but with other central banks which will allow us to introduce this product to the market probably 2011/2012. So you’ll have this product in your pockets within the next two years. Central banks nowadays tend to take banknotes out of circulation earlier and develop new series with new security features, in order to prevent counterfeiting.

Is this new technique forgery-proof, or is it simply too expensive for counterfeiters?

It certainly is a very complicated process, which you need a complicated machine for. But even more complicated is the technology to produce the windows. You have to punch holes, as you called them, into two 35g thin paper layers and make sure that they are overlapping 100%.

How big is the business volume of this mill?

In Landqart we have a turnover of 85 Million Swiss Franc. With a new investment that we are going to do this year, we will bring the production capacity of banknote paper to a much faster machine, so we have to position the company on at least the same EBITDA level as Dresden.

Would you make a prognosis for the capital market? Do you know already from the forecast how big the turnover will be 2010?

I think it depends a lot on the development of the commodity prices. We have a very good workload here in Dresden and in Landqart as well, and I think we can expect at least the same as last year.

SOURCE: BörsenRadio Network AG

An arial view of the Landqart Mill in Switzerland.

Fortress Paper owns and operates two paper mills in Europe – the Dresden Mill and the Landqart Mill. Each with a specific task, the mills are responsible for Fortress’ output of paper products including wallpaper, banknotes, security paper, and more. This article takes a closer look at the Landqart Mill in Landqart, Switzerland.

For over 100 years, the Landqart Mill has been responsible for the production of security and specialty papers. Encompassing products such as banknotes, visa papers, tickets, passport paper, watermarked paper, bristol board and more, the Landqart Mill has developed a strong reputation for being a leader within the security paper industry. The mill has also become a global player in the growing market for trademark protection.

LANDQART, A SHORT HISTORY
The Landqart Mill was originally constructed in 1872 with one paper machine, with a second one being added almost 25 years later. By the twentieth century, the Landqart Mill saw a steady increase in business, adding yet another paper machine to maximize output.

With Europe thriving under a technology boom in the 1960s, Landqart was able to confront the world market more efficiently. The existing mill merged with other paper factories on the Sihl River and switched their focus from a manufacturer of graphic paper to a reputed supplier of security paper. The production of banknotes was key to the new developments at Landqart – so much so that the mill became the sole provider for the Swiss currency in 1979.

In 2003, the Landqart Mill opened a high performance heat embossment plant for the application of film in strips or as patches onto security paper. This technology was implemented into banknote production, allowing the mill to produce high-tech, anti-counterfeit bills.

In 2007, Fortress Paper – a Vancouver-based security and specialty paper company – purchased the Landqart Mill and has been developing, testing, and producing new innovative security products on site ever since.

LANDQART TODAY
The Landqart Mill produces banknotes of over 100 currency denominations for more than 25 countries around the globe. In addition to still being the sole provider of the Swiss currency, the mill is one of only nine suppliers of banknote paper for the Euro currency.

Using its extensive knowledge of security papers and features, the mill also develops products for more commercial purposes, such as electronic passports. This January, Fortress Paper announced the signing of a contract that will see the mill produce approximately 2,500,000 e-passports over the next five years (read “Fortress Paper Announces EPassport Contract”).

On top of that, Fortress also announced in February that it had received funding to rebuild one of its primary paper machines at Landqart, the PM1. Currently used for lower margin specialty papers and low to medium security papers, the rebuild of the machine will increase the mill’s production capacity four times over – from 2,500 tonnes per year to 10,000 tonnes per year (read “Fortress Paper Announces Signing of EUR18.5 Million Loan for PM1 Rebuild”).

USING STEAM TO GO GREEN
Producing security papers and banknotes aren’t the only innovations with which the Landqart Mill engages. The mill has also developed a unique strategy to combat its environmental emissions with the use of steam.

Steam is an important component of creating paper. It’s used as a primary source of heat in the process of converting pulp to paper and while many paper mills would burn fossil fuels on-site to generate this steam, Landqart actually re-uses steam that comes from a nearby refuse incinerating plant.

The steam has to travel nearly 7km through a pipeline that connects the plant to the mill. Landqart agrees that the pipeline is perhaps “unconventional,” but is going a long way – literally – to protect “natural resources and reduce CO2 emissions into the environment” in the production of paper which they are using to create – among other things – banknotes.

SOURCES:
Landqart: Swiss Special Paper
Fortress Paper Ltd.
Landqart: “Responsibility for Nature and Environment”

Fortress Paper Ltd. (TSX:FTP) www.fortresspaper.com (“Fortress Paper” or the “Corporation”) announces the signing by its wholly-owned subsidiary Dresden Papier GmbH (“Dresden”) of a loan agreement for EUR 18.5 million (CDN $26.5M) with GE Capital Bank AG in connection with the rebuild of Landqart AG’s (“Landqart”) papermachine no. 1 (“PM1″) to produce banknote papers. The loan agreement is for a 7 year term, fixed for the first 3 years at 7.09% per annum beginning after final drawdown which is anticipated to be early 2011. During the drawdown period, interest only payments will be required at 6.20% per annum.

The Dresden loan in conjunction with the previously announced Dresden factoring agreement for up to EUR 12 million, the Landqart factoring agreement to be finalized together with cash on hand will provide the necessary financing and cashflow for the rebuild of the PM1 machine. The rebuild increases Fortress’ banknote production capacity from the current 2,500 tonnes per annum to approximately 10,000 tonnes per annum.

PM1 is currently utilized for lower margin specialty papers and low to medium security papers. The rebuild is expected to be completed by the end of 2010, with banknote papers production from this rebuilt machine scheduled to begin in the first quarter of 2011.

SOURCE:
MarketWire: Fortress Paper Announces Signing of EUR 18.5 Million Loan for PM1 Rebuild

Fortress Paper President & CEO, Chad Wasilenkoff, on BNN. Click to watch.

Fortress Paper’s President & CEO, Chad Wasilenkoff, talks to the Business News Network (BNN) about his company’s focus on non-woven wallpaper & security paper, and speaks about upcoming innovations at their Landqart Mill in Switzerland.

Watch the BNN clip HERE, or by clicking on the image to the right.

This week Fortress Paper Ltd. announced a 52 per cent rise in quarterly profits, showing that while many companies are struggling during this period of economic downturn, they are thriving.

The company – which produces non-woven wallpapers as well as security and specialty papers (such as bank notes) – reported net income of $3.5 million for the third quarter of 2009, an increase of $1.5 million from the same quarter last year. The increase in profits earned shareholders $0.38 per share, up more than ten cents from last year.

Fortress Paper credits a strong quarter in banknote paper sales from its Lanqart mill coupled with consistent positive results at their Dresden mill:
“As the year has progressed it has become apparent that our mills have been able to endure the economic crisis and produce healthy results,” the company said in a press release this week. “The market for security papers, which includes bank notes, passport paper and other high security papers, continues to show strength and our order book for wallpaper base is experiencing its highest level of demand since the economic downturn.”

SOURCE:
Fortress Paper
FORTRESS PAPER ANNOUNCES RECORD THIRD QUARTER 2009

Posted By: T. Murphy