Giesecke & Devrient GmbH
Giesecke & Devrient GmbH
Incorporated: 1852 as Officin für Geld-hen; und Werthpapiere
Sales: EUR 1.23 billion ($1.8 billion) (2005)
NAIC: 323119 Other Commercial Printing; 323110 Commercial Lithographic Printing; 323111 Commercial Gravure Printing; 561621 Security Systems Services (Except Locksmiths)
Giesecke & Devrient GmbH is one of the world's leading banknote printing and currency processing specialists. The Munich, Germany-based company, founded in 1852, is organized into two primary business segments. The Banknote Segment includes the company's original business of banknote printing for the Deutsche Bundesbank and as well 40 other countries around the world; the production of banknote paper, including high-sophisticated, fraud-resistant papers; and currency automation and services. The banknote segment accounted for approximately 51 percent of the company's total sales of EUR 1.24 billion ($1.8 billion) in 2005. Giesecke & Devrient has also played a leading role in developing new card-based payment and processing systems, which forms the basis of its Card Segment. That unit develops smart cards and other payment systems, chips, and SIMs and related equipment for the telecommunications, e-security markets, and industry and government sectors. Products incorporating the group's technology include chip-embedded passports, healthcare and social security cards, electronic payment cards, corporate and national identification cards, including driver's licenses. Giesecke & Devrient operates on a global basis, with more than 42 subsidiaries around the world. The company also operates joint ventures in China, Russia, Turkey, and Germany. Europe (under which the company groups its operations in the Middle East and Africa) remains the group's largest market, accounting for 66 percent of total sales; the company is also active in North and South America, and throughout much of the Asian Pacific. Giesecke & Devrient remains committed to its status as a privately held company, controlled by the founding families. Karsten Ottenberg has served as company chairman and CEO since 2005.
BANKNOTE STARTUP IN 1852
Giesecke & Devrient stemmed from a printing business established in Leipzig, Germany, in 1852 by Hermann Giesecke and Alphonse Devrient. The partners were not unknowns in the printing industry; Devrient, in particular, was a member of the prominent Teubner printing family of Leipzig. From the start, Giesecke and Devrient's company, originally called Officin für Geldund Werthpapiere (Printing Shop for Banknotes and Securities), endeavored to set new technological standards for the banknote and securities printing industry. In this way, the partnership soon emerged as a prominent figure in the German securities printing market, noted particularly for the work with the guilloche style of engraving. By 1856, Giesecke & Devrient, as the company came to be known, had won their first contract for the printing of banknotes, for a ten-thaler note from the Duchy of Altenburg.
By the 1880s, Giesecke & Devrient had not only established itself among the leading German banknote printers, it had also begun to win its first contracts on the export market. South America provided the company with its earliest export success, and by 1900 Giesecke & Devrient had fulfilled a variety of contracts in the region. The company's product range by then had expanded to include postage stamps and government bonds, in addition to banknotes. Giesecke & Devrient had also added a number of Asian markets to its export operations, including the printing of banknotes and postage stamps for Thailand since 1891.
Despite its success abroad, Giesecke & Devrient's first banknote contract at home came only in the early 1920s, when the German economy was swept up in the hyperinflation of the post-World War I era. Faced with the onerous burden of Germany's wartime reparations commitment, the Weimar government adopted the policy of printing more money (a move considered to have been a factor in the continuing hyperinflation). Unable to meet the demand for new paper currency by itself, the government turned to private printers. In early 1923, Giesecke & Devrient received its first contract, for a thousand Papiermark note, which became known as the Giesecke Tausender. The company quickly received a number of new orders, as the hyperinflation of the German currency took on a life of its own through that year. At the height of overinflation, the German government had hired some 130 private printers to maintain its banknote production.
Finally, in November 1923, the Weimar government moved to halt hyperinflation by introducing a new interim currency, called the Rentenmark, which was backed by real estate and other holdings. The plan, which exchanged one trillion old Papiermarks for a single Rentenmark, provided Giesecke & Devrient with a new and highly lucrative contract. Through the course of that contract, the company printed nearly 50 million Rentenmark notes. These remained in circulation through the 1930s, even after the introduction of the Reichsmark in 1924.
As a leading printer, G&D also became responsible for printing various denominations of the Reichsmark through the 1930s and to the end of World War II. The company also maintained its strong export business, printing banknotes for a number of countries, including post–Civil War Spain. At the same time, Giesecke & Devrient branched out into other areas of printing. In 1936, for example, the company received the contract for printing the tickets for the Olympic Games, held in Berlin that year, underscoring its prominence in the German printing industry during the Third Reich.
Giesecke & Devrient were hit hard during and immediately after World War II, however. The company lost some three-quarters of its facilities after Allied bombing raids destroyed Leipzig's printing district in 1943. By the end of the war, Leipzig had fallen within East Germany, controlled by the Soviet Union. The remainder of G&D's operations were then confiscated under the new Communist-backed government.
REBUILDING IN THE
POST–WORLD WAR II ERA
Giesecke & Devrient might have disappeared altogether if it had not been for the efforts of Siegfried Otto. Married to Jutta Devrient, daughter of the company's last chairman, Ludwig Devrient, Otto had spent three years in a Soviet prisoner-of-war camp before returning to Germany in 1948. Otto joined the other members of the Giesecke and Devrient families in Munich, and called a meeting with the company's shareholders to decide the company's fate. During that meeting, the shareholders group agreed to reestablish the company in Munich.
Giesecke & Devrient was reborn in 1948, starting out with a single small office in an attic, and no printing press. Yet, led by Otto, the company won its first printing contracts, which enabled G&D to set up a new shop in a building at the Riem airport in Munich.
The corporate mission of Giesecke & Devrient is to protect assets worldwide. We develop many of the solutions required to achieve this in close cooperation with our customers. Three of them—from the banknote, payment, and IT security sectors—are featured in this report. Partnerships based on trust are an essential prerequisite for developing unique, groundbreaking technologies, and we would like to thank all our customers for their trust.
Before long, Otto had restored Giesecke & Devrient to its former position at the top of its specialized printing sector. By 1955, the company had won the contract to develop Germany's first Deutschmark-based traveler's check. By 1958, Giesecke & Devrient became an essential partner to the Bundesbank, receiving a contract to supply 50 percent of Germany's banknote requirements. That contract was to remain in place into the next century. The company's importance in the German, and European, printing markets was further underscored in the late 1960s, when G&D became one of the core developers of the eurocheque and eurocard banking systems.
Giesecke & Devrient also returned to the international market in the 1950s. An important expansion for the company came in 1958, when it set up operations in Mexico. The extension into that market, which paved the way for the group's broader expansion throughout Latin and North America, came as part of the company's strategy of diversifying its base of operations, in the event of new hostilities in Europe.
In the mid-1960s, the company moved to broaden its operational base again, this time through the acquisition of Papierfabrik Louisenthal, based in Gmund, in 1964. As a result, G&D entered the production of banknote and securities papers. The company expanded that operation, constructing a state-of-the art specialized paper mill. By the end of that decade, G&D had completed another acquisition, of the Teubner printing company, which had relocated to Stuttgart following World War II.
Giesecke & Devrient turned toward the future at the start of the 1970s, founding a new subsidiary, Gesellschaft für Automation und Organisation (GAO), which became the first to receive a patent for developing a card with an embedded microchip. GAO became the company's spearhead for developing so-called "cashless" currency transaction systems and equipment.
G&D sought other directions for adopting new technologies. In 1975, the company introduced an automatic currency processing system. In conjunction with that system, the company also brought out a new type of banknote that could be read by machine. For the credit card market, then still in its early days, the company introduced a new system using lasers for personalizing cards. The heightened security offered by the system, launched in 1979, helped bank cards gain a new level of acceptance. Two years later, G&D gained another first when it launched the industry's first chip cards, later more commonly known as smart cards, in a contract with the German post office and two banks in France.
The company continued extending its technology through the 1980s. In 1984, G&D launched the first series of telephone cards for Deutsche Bundespost. The company also introduced the first SIM (Subscriber Identity Module), establishing what was to become an industry standard. The SIM soon became an important feature of the cellular telephone market, with the first commercial rollout of a SIM-based telephone in 1991.
- Hermann Giesecke and Alphonse Devrient establish Officin für Geldund Werthpapiere in Leipzig, Germany.
- Company receives first banknote printing contract.
- Company launches export operations, notably to South American markets.
- Company receives first contract to produce Papiermarks for Weimar government in Germany.
- Most of company's operations are destroyed in Allied bombing raids.
- Siegfried Otto relaunches Giesecke & Devrient in Munich.
- Company receives contract to supply 50 percent of banknotes for Bundesbank; establishes operations in Mexico.
- Subsidiary GAO is formed in order to develop new smart card technologies.
- Company launches first smart card in conjunction with Deutsches Bundespost and two French banks.
- Company launches first commercial SIM (developed in 1984) in Finland.
- Company enters mainland Chinese market.
- Giesecke & Devrient establishes subsidiary in Egypt.
- Company forms subsidiary operation in Australia.
- Canada's BA Banknote, the world's number four banknote printer, is acquired.
- Company opens new smart card and SIM production unit in India.
By the end of the 1980s, G&D's operations within the telecommunications industry included the first smart-card-based telephones, launched in partnership with Deutsche Telekom's C-Net mobile phone system in 1988. G&D remained committed to its diversified markets, introducing its first hybrid point-of-sale (POS) security terminal in 1988, and a new high-speed banknote processing system in 1989. The latter product helped the company penetrate the U.S. market, winning a large-scale contract to supply the Federal Reserve Bank.
INTERNATIONAL LEADER IN THE
The German reunification in 1989 brought the company back to East Germany, with the acquisition of Papierfabrik Konigstein, outside of Dresden. The company soon opened new operations in Leipzig as well. The reunification also gave the company new banknote printing contract opportunities, replacing the East German currency. Yet by then, Giesecke & Devrient had established itself as one of the world's top privately held companies operating in both the banknote and banknote paper sectors, and in the growing chip-based currency, identification, and transaction markets. The company increasingly added new subsidiaries, building out an international network of more than 40 subsidiaries and a number of international joint ventures. As examples of this effort, Giesecke & Devrient entered China as early as 1994, established a subsidiary in Egypt in 1996, and set up a dedicated operation in Australia in 1998.
Siegfried Otto, who had bought full control of the company from the other family members in 1989, stepped down from active management in 1994, and died in 1997. Soon after, the company appointed a new chairman, Willi Berchtold. Under Berchtold, the company developed a new policy of more transparent financial reporting, while remaining committed to its status as a private company. Control of the company's shares had in the meantime been turned over to Otto's two daughters.
G&D continued to reinforce its status as the leader in both of its core operational markets. In 1999, the company strengthened its banknote printing business, acquiring BA Banknote, in Canada, then the world's number four banknote printer. G&D had also become one of the core group of printers responsible for developing and printing the new European currency, the Euro, launched on a full scale in 2001. The company added to its capacity again in 2002, building a new large scale printing plant in Malaysia. In the meantime, the company's other core segment, Cards, was boosted when the company won the contract to supply the first open platform credit card system for the Visa Open Platform from ANZ Bank. At the same time, the company launched the first UniverSIM cards for the new 3G mobile telephone networks launched in Europe in 2003.
Into the mid-2000s, G&D Card segment remained a market leader, particularly in the emerging "contactless" payment market. As part of that effort, the company rolled out a new miniature antenna, small enough to be incorporated into key chains, and even into credit cards, in 2006. At the same time, the company responded to the growing demand for chip- and SIM-based cards in the Asian region, establishing a new chip production plant in India, near Delhi. After 150 years, Giesecke & Devrient remained at the heart of the international currency and transaction markets.
M. L. Cohen
BA INTERNATIONAL INC. (Canada); Beijing G&D Card Systems Co. Ltd. (China); Giesecke & Devrient Africa Limited (Nigeria); Giesecke & Devrient America, Inc.; Giesecke & Devrient Asia Pacific (Korea) Co., Ltd.; Giesecke & Devrient Asia Pacific Ltd. (Hong Kong); Giesecke & Devrient Australasia Pty Ltd. (Australia); Giesecke & Devrient Brazil Ltda.; Giesecke & Devrient CARDTECH, Inc. (U.S.A.); Giesecke & Devrient de México S.A. de C.V.; Giesecke & Devrient Egypt, Ltd.; Giesecke & Devrient India Pvt. Ltd.; Giesecke & Devrient Malaysia Sdn Bhd; Giesecke & Devrient Southern Africa (Pty.) Ltd.; Giesecke & Devrient Systems Canada, Inc.; GyD Latinoamericana S.A. (Argentina); Jiang Xi G&D Chip Card Systems Co. Ltd. (China); Tri-Ring G&D Information Industry Co., Ltd. (China).
China Banknote Printing and Minting Company Ltd.; American Banknote Corporation; De La Rue plc; Gemplus International SA.
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