The sublime style of Goznak19 ìàðòà 2015 ãîäà
It is necessary to put the gold rouble in circulation? What is plamet, and what is the future of coin-like money? Arkady Trachuk, Head of Goznak told the RG about that, as well as about “Goznak” detective series and why it is time to abandon the paper work record books and diplomas.
Arkady Vladimirovich, there has appeared a “sketch” of 10 000-rouble banknotes in the internet. Is that a fake? Or is such a banknote being developed after all?
Arkady Trachuk: No, a 10 000-rouble banknote is definitely not being worked upon.
We certainly see that small coins disappear, but the 5000-rouble banknote remains the highest, and there is neither a necessity nor conditions to create a banknote of a greater face value. By the way, we have modified the 5000-rouble banknote relatively recently. The payment requirements of a man in a usual situation are covered with the existing banknote row quite well. And one can pay large amounts, per example, an expensive long-distance air ticket with the help of non-cash instruments. And it is absolutely unnecessary to create another banknote with higher face value for that.
Last year Goznak produced coins of composite material under the order of the Central Bank of Transdniestria. Has the technology been patented?
Arkady Trachuk: Of course. We have applied composite materials to the production of, shall we say, coin-like products for the first time in the world. The solution itself is very interesting. One may say that it is a revolutionary development of Goznak – a new payment instrument combining the advantages of both banknotes and coins.
The progressive solution helps to increase the life cycle of a payment instrument up to the values comparable with those of coins (they remain in circulation for about 10 years). And at the same time it preserves the advantages of a banknote – a bright colourful design, a high security level, low weight and usage convenience.
“Plamet” will be a more convenient instrument for the citizens. We are fulfilling a unique pilot project of “Plamet” application in Transdniestria. The Bank of Russia has certainly been informed about our development. In principle, it is a substitution of not only coins, but also banknotes of low face values.
The production of coin-like products using composite materials is comparable with the prices for coins. But one should get used to that, just as to any brand new material.
In Russia counting devices and equipment are adapted to coins, the vending trade – machines selling coffee, beverages etc. – is developing actively at the moment.
Speaking about “Plamet”, its security level is higher than that of the metal coins.
The travel passport is losing demand. How are the sanctions and rouble decrease affecting the Russian money production? Is there a lot of foreign “spare parts” in it?
Arkady Trachuk: The share of all imported components in the banknote production cost structure comprises from 18 up to 47 per cent depending on the banknote face value. They are purchased using foreign currency.
Those are, first of all, inks, secondly, cotton from which cotton cellulose is made, it doesn’t grow in Russia.
Discussions about how much the banknote production costs have increased or whether the supplies of imported components will cease as a result of the sanctions are from another world. It’s true that a number of components necessary for the banknote production are not manufactured in Russia and cannot be replaced with homemade products without changing the production technology. But if, per example, the supplies of imported inks cease, we understand what we shall do.
The decrease of what production fields leads to the decrease of Goznak’s profit today?
Arkady Trachuk: The volumes of orders for travel passports have decreased to compare to 2014. The number of requests for personalization of travel passports with electronic data carriers has declined.
There are two reasons for that. First of all, the Russians go abroad less often. That means they will need fewer travel passports. Some evaluate the decrease 20-30 per cent. The second reason is that the five-year passports with the plastic page are out of circulation. The citizens have 10-year passports now.
We have actually lost, though the word is not exactly correct, a large volume of order of the Federal Migration Service. That’s quite a large amount of money.
The next story, which should makes us happy, is that it seems the Russians smoke less. The excise tobacco stamp production volume is decreasing. Moreover, they drink less in Russia too, judging by the fact that the orders for the production of federal excise stamps for marking alcohol products have decreased by over 10 per cent.
However, unfortunately this market is somewhat affected by counterfeit alcohol marked with fake stamps.
What do you replace the losses with?
Arkady Trachuk: We develop and offer new complex services to our customers; for example, long-term storage of electronic documents and databases for the federal executive bodies and extrabudgetary funds.
The Obligatory Medical Insurance Fund produces obligatory medical insurance policies at our site, and our Data Processing and Guaranteed Storage Center is quite a convenient structure helping to save on traffic and communication channels. The Social Insurance Fund and the Union of Motor Insurers also rent a site at our Reserve Data Processing and Guaranteed Storage Center.
We count that till the end of this year the volume of orders for information and communication services will reach 1 billion roubles. From the point of view of increasing our profits, by the way, we also hope for the increase of exported products priced in foreign currency by the way.
What do you export now?
Arkady Trachuk: Now Goznak is engaged in large orders for the African continent, including the production of banknotes and coins for the Republic of Angola. We have completed the project of the security set modification for the production and supply of banknotes for the Republic of Rwanda recently.
We have won an international tender for the supply of banknote paper in Indonesia; we are preparing to participate in one of the largest tenders in the world for the production of banknote paper for the Reserve Bank of India.
The competition is not an easy one, there are a lot of participants, from Germany, France. Goznak competes with the leading players on the international market of security products first of all thanks to the application of cutting-edge and high-tech solutions. Today we also have another, possibly the most important advantage – the price.
Goznak is carrying out a large-scale project in Lao People's Democratic Republic that is introducing new biometric passports. And here we offer not only a specific product – passports – to our customers. We offer a complex “key-in-the-door” solution when we supply personalization equipment and software together with passports. For us it is the first experience of such a complex service. We hope other countries will be interested in it too.
The symbol of rouble
When will the graphic symbol of rouble appear, and on what banknote? Some say, it will be the 100-rouble banknote dedicated to Crimea.
Arkady Trachuk: As for the symbol of rouble, it has appeared on coins as you know.
The Bank of Russia has made the decision to issue a banknote dedicated to the annexation of Crimea. I can’t tell you the exact dates of its appearance. We don’t comment what will be depicted on the banknotes before they are put in circulation. That’s a rule. It is quite likely that when the banknotes are modified, the symbol of rouble will appear on them.
This year the State Duma has discussed the matter of introducing a new national currency, the gold rouble that may be used for international payments. Is this idea promising for the population?
Arkady Trachuk: I see no sense in this novelty. In fact, the Russian financial system offers quite a sufficient amount of saving instruments.
The population may use investment gold coins. Goznak mints “George the Victory Bringer” investment coins with the face value of 50 rouble. It’s a quarter of ounce of gold. But if we nominate something in gold we should realize that we transfer the exchange rate risk to the citizens.
The same investment coin cost 11 or 12 thousand roubles at the beginning of 2014, but today it costs 22 thousand roubles. But it is one thing when you buy it with the aim of a long-term investment. Because if the price of gold falls, the investment coin may lose its value too. If the price of gold is 1200 dollars per troy ounce, it may become 900 tomorrow. It is necessary to realize that if we put such a payment instrument in circulation we create new risks every unprepared person will face.
Is the demand for investment coins increasing?
Arkady Trachuk: No. The demand for investment coins has been stable for a few years. Just like that for the commemorative coins of the Bank of Russia. Many people buy commemorative coins to their personal taste, for the family collections, as gifts or souvenirs…
Do you buy collectible coins?
Arkady Trachuk: I’m not a coin collector. I haven’t gone for that. Therefore I buy only the coins I like personally, one or two coins per year. I like “The Russian champions and prize winners of the XXXth Olympic Games of 2012 in London” coins. I advise you to visit Goznak’s site. One can see their images in the slide-show on the main page.
And how do the Mints of Goznak feel?
Arkady Trachuk: Quite well. Both the Mints – in Saint-Petersburg and Moscow – operate. Everything we said about the banknotes at the beginning of our talk may be referred to the coins too.
Steel and non-ferrous metals applied to the coin minting affect their cost considerably. Those are not imported goods but they are exchange-traded. That means they are nominated in foreign currency, and in spite of the fact that Russian companies produce them, the fall in the rouble exchange rate is felt to the full extent in their price. The cost of the coins blanks is growing noticeably, and that leads to the raise of the coin production net costs.
Moreover, a part of low face values goes out of circulation because the prices change. Consequently, the lowest coin face values are not needed in the circulation today.
Do you mean the 10-kopeck coins?
Arkady Trachuk: We formally still have one and five-kopeck coins in circulation. But we haven’t minted them for the last few years already. Therefore, the lowest face values today are 10 and 50 kopecks. There is a risk that they will affect the circulation less and less, they will become less demanded. These two factors lead to the decrease of the volume of coins we produce. And that leads to the specialization of the Mints.
The Moscow Mint is concentrated on the production of subsidiary coins today. The Saint-Petersburg Mint produces commemorative coins and state awards. The modernization of the Mints we are carrying out corresponds to these tasks. We’ve got no anxiety about the Mints’ destiny. But we realize that there are and will be changes at the production sites.
The Federal Anti-Monopoly Service is concerned about the fact that cellulose and paper mills are raising prices for paper. How are things with raw materials for the commercial sorts of paper you produce?
Arkady Trachuk: It’s difficult to say how the events will develop.
We buy raw materials at the price we’ve agreed upon with the cellulose producers. To compare with the last year’s price, it grew by 60 per cent in January, and then it decreased (during the negotiations with the Federal Anti-Monopoly Service) to 23 – 25 per cent. We’re speaking about wood cellulose which we apply mainly in the commercial production.
Correspondingly, the cellulose grows in price and we increase the prices for printing, wallcovering and office paper. Taking into account the fact that we’ve got a very little choice of Russian cellulose suppliers, and any imported supplies are senseless, the cellulose and paper mills determine the game rules, and we can only agree to them. We hold negotiations and hope for the common sense.
Goznak is engaged in developing new technologies. Did you register many patents last year?
Arkady Trachuk: In 2014 Goznak became the possessor of twenty-seven new objects of intellectual property, including twenty-four patents given by Rospatent.
One of inventions of the previous years received legal protection in the European Union and in the Republic of Indonesia. As know-how, Goznak protects recipes of special solutions and production process technologies; developments of the coin and order productions by way of useful models. The technical solutions patented as inventions are directed at a broad range of the printing and papermaking fields as well as the application of security features.
The Victory Medals
Goznak received a large order for the production of commemorative medals for the 70th anniversary of Victory.
Arkady Trachuk: It was a very important and honorable order for us. In 2014 the Moscow and Saint-Petersburg Mints of Goznak produced 2 million 240 thousand pieces of jubilee medals “The 70th Anniversary of Victory in the Great Patriotic war 1941-1945” within a short time.
It is the eighth jubilee medal dedicated to the anniversaries of Victory in the Great Patriotic war. In previous years our Mints carried out orders for the production of medals dedicated to the 20th, 25th, 30th, 40th, 50th, 60th and 65th anniversaries of the Great Victory.
The medals dedicated to the 70th anniversary of Victory in the Great Patriotic war are different from their predecessors. Instead of tombac, as had been before, cupronickel was applied in the production of the jubilee medals. And, most importantly, colour was used for the first time on the jubilee medals.