Korea’s minting agency diversifying business

Challenged by the expanding cashless society, South Korea’s state-run minting agency is diversifying its business domain and actively tapping more export destinations to offset a sharp drop in demand for coins and banknotes.

Rapidly increasing credit card usage and the digital payment revolution are making Koreans’ wallets slim. Under its initiative in finding a prospective niche, the Korea Minting, Security Printing & ID Card Operating Corp. is strengthening its non-minting segment. 

Among the initiatives are gold bar and anticounterfeiting technologies in the field of currency, national identification and security-related products.

“KOMSCO aims to be one of the world’s top five security solution companies over several years by carrying out a full-fledged introduction of cutting-edge technologies and taking a strategic approach to the global market,” said its chief executive Kim Hwa-dong.

The agency’s drive to bolster its information technology solutions and export came as cash issuance volume in the country declined. The volume of banknote issuance tumbled to the 600 million level, compared to around 2 billion notes in 2007.

According to data from the Bank of Korea in January this year, cash payments accounted for only 17 percent of total value of consumer payments nationwide. It is far lower than that of some developed economies -- Australia and Germany posted 65 percent and 53 percent, respectively.

By introducing self-developed new anticounterfeiting technologies in September 2014, it accelerated to morph into a total security solution provider in full swing.

“In recent years, KOMSCO’s focal point has shifted to IT solutions in a bid to lighten the company’s heavy dependence on note and coin making for a profit source,” spokesman Kim Jung-hee said.

Its anticounterfeiting products -- Ghostsee, Smartsee and Hidden-QR -- have started to draw wide attention from private enterprises.

Ghostsee is a technology that identifies copied paper notes that are scanned, while Smartsee finds invisible patterns and text through a smartphone application developed by KOMSCO.

By transferring these sophisticated solutions, the state-funded agency made profits of 380 million won ($320,000) last year and already 1.65 billion won this year.

“The most outstanding result so far this year would be exporting electronic voter cards to Kyrgyzstan,” said the spokesperson.

In June, it signed a contract with the Kyrgyzstan government, which marked the first time for it to provide smart card technology to an overseas client.

While the export of such high-tech products is still in its infancy, the minting firm posted the biggest sales in its history last year at 427.5 billion won, compared to 334.8 billion won in 2007, buoyed by increasing sales of its signature “ORODT” gold bar.

KOMSCO sold 70 billion won worth of gold bars last year through a local home shopping channel and wholesale dealers.

It was introduced to Indonesian consumers in July via the nation’s televised shopping program owned by Indonesian media group EMTEK.

The corporation aims to expand sales of the gold bar products to Asian markets such as China and India.

It is also exporting papers used to roll out local notes and for public documents largely in emerging markets, including Indonesia and Papua New Guinea.

CEO Kim has vowed to build a sustainable management system by expanding in new business fields in the face of changing market conditions. 


By Park Han-na (hnpark@heraldcorp.com)