The first time counterfeiting hit the radar of the Bank of Canada in major way was in the 1980s. In an effort to combat the up-and-coming technology of colour photocopying, the bank introduced a new series of banknotes with finer detail and new security features.

“Fine details in the face and hair of the Queen and former Prime Ministers depicted on the bills were too finicky for photocopiers to handle and appeared fuzzy in reproductions. A shiny gold metallic patch placed on each bill turned dark when replicated, further thwarting the forgers,” Globe & Mail writer Grant Robertson writes.

As technology advanced, Canada’s currency did not. Home computers became more affordable, graphics software was readily available, scanners were commonplace and ink-jet printers became the default for many households. Counterfeiting suddenly became easier than ever.

By the late 1990s, “the number of fake Canadian bills rose as high as 117 parts per million (PPM). Most G20 nations used 50 PPM as their benchmark to stay below,” says the Globe and Mail.

In 2002, 16 years after their last series was issued, the Bank of Canada introduced a new series to thwart the “computer-savvy do-it-yourself counterfeiter.”

Again, new security features were added to the note to ensure it would prevent forgeries. In particular, the new series featured a shiny holographic stripe down one side of the bill that shimmered in the light as well a watermark that appeared hidden but showed up when held to the light.

Four years later, in 2004, counterfeiters were learning to replicate the holographic stripe setting in motion the need to create a new series. In an attempt to create a product that was not only more secure but also a product that was more durable. For banks, the cost of producing new banknotes to replace damaged or used notes can be expensive. Polymer notes are typically two and half times more durable, according to the Bank of Canada.

In November, the Bank introduced the first polymer banknote in a developing series – a new $100 bill that contains several state of the art security features such as raised ink, a large transparent window that also contains a colour-shifting metallic portrait, hidden numbers in the transparent window that match the note’s denomination, transparent text, a frosted maple leaf window that also contains hidden numbers, among others.

Developing new banknotes in a timely fashion is one way for banks to stay ahead of counterfeiters.

“Counterfeiting rates have fallen steadily in Canada in recent years,” says the Globe and Mail. “The country now reports a parts-per-million ratio of below 40, which is finally in line with what most G20 nations consider acceptable.”

To read the full Globe and Mail feature, click HERE.

SOURCE:
The Globe & Mail: “Funny money: How counterfeiting led to a major overhaul of Canada’s money

In part three of the Globe and Mail’s Small Business Editor Katherine Scarrow’s feature video interview with Fortress Paper CEO Chad Wasilenkoff, where she called Chad Wasilenkoff, Fortress Paper a “born entrepreneur”.

Fortress Paper CEO Chad Wasilenkoff discusses growing up an entrepreneur, and why he’s always looking for a good deal in part 3 of Talking to Entrepreneurs

To watch part three of ‘Talking to Entrepreneurs’ please click HERE.

Watch Other Videos In The Series:

Part 1: ‘Fortress Paper chief turns tired mill into major venture.’ Watch video HERE
Part 3: ‘Entrepreneurial paper chief explains contrarian investing strategy’. Watch video HERE

Globe & Mail Small Business Week Interview Featuring Fortress Paper (Part 2)

In the series the Globe and Mail’s Small Business Editor Katherine Scarrow sits down with Fortress Paper CEO Chad Wasilenkoff to discuss various aspects of his company.

Speaking about his nature as a self-proclaimed “contrarian investor,” Wasilenkoff presents a snapshot of
Fortress Paper’s inception in a time of unprecedented decline in the forestry sector.

“In troubling times like that, there’s always going to be some interesting mill, some interesting product, and somebody has to have something unique, so you just have to pick out those hidden gems,” he says in the interview.

Watch the entire video HERE.

SOURCE:
The Globe And Mail: “Fortress Paper Chief Turns Turns Tired Mill Into Major Venture”

This week, The Globe and Mail selected Fortress Paper as a microcap company poised to do big things in the coming months:

Fortress Paper Ltd., which has mills in Germany and Switzerland, makes security (such as currency notes) and specialty papers as well as wallpaper.

“It definitely has above-average profitability compared to other businesses that operate in the pulp-and-paper segment,” said Ralph Lindenblatt of Bissett Investment Management, a unit of Franklin Templeton Investments Corp.

The stock is “very attractively valued,” trading at 11 times trailing earnings, he added.

SOURCE:
The Globe and Mail: “Microcap growth at a reasonable price”

At a 125-year-old factory in the shadow of the Swiss Alps, veteran watchmakers, trusted for their keen attention to detail, pore over the drums that will embed detailed watermarks into pristine sheets of paper stock. But not just any paper stock. Fortress Paper’s Landqart mill manufactures the security paper used to print passports, banknotes, bonds and even the certificates of authenticity that ship with each shiny new Rolex watch.

For Fortress Paper, the Vancouver-based company that owns and operates Landqart, the business is about as different from Canada’s beleaguered pulp and paper industry as a company can get.  “With those traditional commodity papers, raw material goes in—pulp, water, chemicals—and when the finished product comes out the end, you package it and sell it,” says Chad Wasilenkoff, Fortress’s 37-year-old CEO, on the phone from his office in Vancouver.

“With banknote printing, it starts in the design phase.” Among the complex procedures that go into the creation of a future euro, Swiss franc or passport are treatments to bolster the paper’s resistance to wear and tear, as well as the application of watermarks and OVI (optically variable ink) strips, which cause the notes to change colour when tilted. “We view ourselves as a technology company on a paper platform,” says Wasilenkoff. Orders are booked solid through 2010.

The young CEO has made a career out of breathing new life into fragile companies in distressed sectors. After revitalizing Titan Uranium Exploration Inc., Wasilenkoff began looking for undervalued niches within the forestry industry. In 2007, Fortress purchased Landqart AG, a century-old security paper company with some old-world cred (Landqart is the exclusive manufacturer for the venerable Swiss franc, and has supplied euros to 10 of the 27 European Union member states—though, for security reasons, Wasilenkoff isn’t allowed to say which ones). Now, Wasilenkoff is banking on innovation to put Fortress Paper in as many wallets worldwide as he can.

In December, Fortress unveiled a new product called Durasafe at the Banknote 2009 conference in Washington, D.C. The new paper is more durable than most currencies in circulation, and allows banks to incorporate nifty—and difficult to counterfeit—features like transparent windows of varying size and shape. Fortress has invested almost $15 million over the past seven years perfecting the new notepaper. “Unfortunately, in this industry, you can’t sell anything with a PowerPoint presentation,” says Wasilenkoff. “You have to have all the equipment, all the manufacturing, full-scale production samples for these national banks to review. Then they go and do their thing and, if it works, the orders start to roll in.” Consider it the latest twist on the old adage that you need to have money to make money.

SOURCE: Dave Morris Report on Business / The Globe and Mail