South Korea Country Report 2012

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Discovery Reports

KOMSCO prevents counterfeiting

Discovery Reports

PUBLISHED : Tuesday, 16 October, 2012, 3:05pm
UPDATED : Thursday, 23 May, 2013, 5:52pm

Innovation is the first line of defence against evolving threats. Korea Minting, Security Printing and

ID Card Operating Corporation (KOMSCO) capitalises on the power of technology to develop sophisticated security measures protecting against counterfeit currencies and documents.

Government-owned KOMSCO has built its business for 61 years on customer confidence. With its name synonymous for quality, KOMSCO has been a trusted partner of central banks, governments and commercial organisations in supplying banknotes and coins. KOMSCO is a financially sound company with a debt ratio of less than 30 per cent.

Its know-how in manufacturing banknotes served as a platform for KOMSCO's expansion to electronic passports, cheques, gift certificates, tax stamps and other paper products.

"We are the only total security solutions company in South Korea. What we manufacture are not simply products but culture, pride, trust and value of the Republic of Korea," says president and CEO Yoon Young-dae.

KOMSCO is one of only four companies in the world capable of providing products and solutions ranging from mintage to banknote printing, from banknote papermaking to ID solutions, including in-house research and development (R&D) capabilities.

Technology development is central to KOMSCO's operations. The government established the Technology Institute of KOMSCO in 1967 to house the company's R&D arm, which has 80 employees.

KOMSCO also boasts an anticounterfeit centre and four research teams responsible for investigation projects such as anticounterfeit technologies. KOMSCO is increasing its R&D investments to create next-generation security features.

The operations complex of KOMSCO comprises the head office, the Kyungsan minting and printing complex, the Puyo paper mill, the ID solution complex and the technical research institute.

Among the highest quality banknote producers worldwide, KOMSCO combines art and technology in manufacturing banknotes. From paper to security inks to printing techniques, KOMSCO equips its banknotes with multiple layers of protection, making them impossible to counterfeit. KOMSCO's banknote paper is made from a cotton-based banknote substrate.

Aspiring to be a global-leading security solutions company, KOMSCO pushes the envelope not just in banknote design but also quality and protection features. The technical know-how going into a KOMSCO-produced banknote is built through many years of research and industry collaboration.

The 50,000-won banknote, first issued in 2009, is produced by KOMSCO in line with the government's plan to issue high-denomination banknotes. It contains 22 security features including hologram stripes, moving images in the windowed thread, novel numbering and colour-shifting ink, among others.

Some of KOMSCO's other core technologies in banknote security are fluorescent security fibres, RGB infrared inks and Intaglio latent images, which are incised onto a surface.

"Banknote printing is a very strong point for KOMSCO. Our researchers study security features day and night at our in-house research institute. We sometimes apply the more advanced security features of other countries but we always strive to develop our own set of features," Yoon says.

Knowledge transfer is an important component in developing new security features for banknotes. Exploring research initiatives, KOMSCO works with organisations such as Swedish currency manufacturer Crane Currency, technology leader Honeywell, chemical company Clariant and the Russia-based Computer Holography Centre.

KOMSCO also collaborates with hardware manufacturers to develop cash processing machines equipped with banknote recognition systems. Enhancing the productivity and security in cash processing environments, KOMSCO delivers end-to-end protection with its automated teller machines, automated currency exchangers, banknote sorters, banknote counters and paper counters.

To expand its proficiency, KOMSCO has also been a regular member of the Pacific Rim Banknote Printers' Conference. Through this venue, KOMSCO promotes information exchange to increase co-operation with world security printing and minting related organisations.

The minting expert

The expertise of KOMSCO when it comes to money extends to circulation coins. The company also produces medallions and cultural jewellery for artistic and commemorative purposes.

Among the most respected in the minting industry, KOMSCO is capable of high-speed production to meet the demands of local financial institutions. The company also exports legal coins to Asian countries, particularly Thailand where KOMSCO won in the competitive open bid of US$12 million worth of coins.

KOMSCO's automated minting and printing complex in Kyungsan has a total production capacity of 1.7 billion coins annually. The company modernised its ISO-accredited minting plants and finished two fully-integrated production systems. The new automated system handles end-to-end production processes from inserting coin blanks and minting to inspection and packaging.

Different kinds of metal are used in making coins. KOMSCO chooses metals that are both durable and cost-effective. Its use of copper-clad aluminium in the 10-won coin saves the Bank of Korea millions of dollars annually in production costs.

Signifying KOMSCO's role in the global minting industry, the company hosted the 25th Mint Directors' Conference, the most prestigious international conference in minting and other related industries, in 2008. KOMSCO works with developed and developing countries to establish new processes and standards for the minting industry. A company dedicated to showcasing Korean culture, KOMSCO is a partner in preserving the country's history by producing collector's coins.

Commissioned coins for the 2002 Fifa World Cup and the 2002 Busan Asian Games turned the spotlight towards KOMSCO as a world-class coin maker.

KOMSCO also pioneered the Korean Money Fair (KMF) to encourage the growth of related industries including banknote printing, security papers and coin collecting. The fair has attracted 15,000 to 20,000 domestic and international visitors annually.

The third KMF will be held from October 26 to 28 in Seoul on a large scale along with international conferences on security technology.

KOMSCO secures documents

KOMSCO's security paper is used globally for additional applications outside of its use for banknotes. This is why a guaranteed supply of high-quality cotton pulp is a must for company operations. To minimise the effect of fluctuating oil costs on the price of cotton, KOMSCO established Global KOMSCO Daewoo in one of the largest cotton-exporting countries in the world, Uzbekistan.

Following stringent quality and security regulations, KOMSCO's paper mill still commits itself to complying with ISO environmental standards.

KOMSCO has a high level of accountability for every step of its process, from finished sheets right down to destroyed paper.

Attesting to its capabilities in securing documents, KOMSCO serves as the official passport issuer for the Republic of Korea. For this special designation, KOMSCO issues standard and electronic passports and has developed technology for chip operating systems and integrated systems solutions for data protection and access.

The company uses cotton only or cotton and cellulose blends in passport security paper. One security feature of KOMSCO-issued passports is a multitonal watermark, a customised mould-made watermark that creates a multitonal effect when placed in a fixed position. This is one of the most effective measures in preventing passport counterfeiting.

A KOMSCO-issued passport also features laser-perforated numbering, holographic protection foil and hidden images. Different methods of printing are employed by KOMSCO such as micro-printed text, Guilloche decorative patterns and rainbow printing.

For e-passports, KOMSCO developed the KCOS e-passport solution. It is an e-passport operating system compliant with International Civil Aviation Organization and European Union regulations. KOMSCO even offers an automatic inspection system to validate e-passports and the holder's fingerprints, and further extends the applications of this system for ID cards.

ID cards are also among KOMSCO's specialities. As the official national ID card manufacturer in South Korea, KOMSCO built a data capturing system for ID documents that can capture photos and transmit data to the server in real-time. KOMSCO uses security features such as laser engraving of biometric features and encrypted digital codes in the ID cards it manufactures.

Exporting as a growth avenue

KOMSCO first exported its products in 1970. The company has successfully exported to 40 countries at a value of more than US$391 million. Along with national ID cards and passports, banknote and banknote paper exports to developing countries hold great promise for the company. KOMSCO's experience in supplying to territories such as Hong Kong, Singapore, Thailand, Taiwan, Indonesia and Vietnam exemplifies a strong strategy in supporting Asian countries.

"Most developed countries want to make their own money themselves so they have their own factories. The less developed countries do not have the best facilities, driving them to import from other countries. This is where we come in," Yoon says. "In some sense, our market is all over the world, those countries that need our help."

Aiming to share its expertise and do its part in eradicating counterfeiting on a wider scale, KOMSCO offers training programmes for less-developed nations to help them raise technical levels and tighten security. The main markets of KOMSCO are Southeast Asia, west Asia, the Commonwealth of Independent States, the Middle East, Africa and South America.

KOMSCO seeks partnership opportunities within the mainland. Although the mainland has its own banknote and ID producing facility, KOMSCO wants co-operation on a technical development level.

"I visited China last April and found out that the mainland and South Korea share the same sentiment about co-operating with each other and helping boost developments in both countries," Yoon says.

Yoon envisions KOMSCO as one of the top five companies in the world, with revenues of up to US$1 billion in 10 years. To achieve this goal, KOMSCO will continue to develop new products to be growth engines, explore new markets, design new technologies and implement new production systems.

"To usher in the company's new generation, KOMSCO's personnel have a responsibility to understand and manage the needs of our customers. This is the basis for KOMSCO's future growth. Our employees are committed to keeping communication channels with customers open to discover how to improve services, products and features," Yoon says.

KOMSCO (Korea Minting, Security Printing & ID Card Operating Corporation)