Fidelity Printers and Refinery

Fidelity Printers and Refinery
Private Limited Company
Industry Currency & Security printing,Coin Minting, Precious Metals Refinery
Founded 1978
Headquarters Harare, Zimbabwe
Number of locations
 Harare and Bulawayo
Area served
 Zimbabwe, Africa
Key people
 Allen Marimbe
Products Banknotes, Passports, Certificates, Cheques, Gold and Silver Bullion
Owner Reserve Bank of Zimbabwe
Number of employees
 1000
Website www.fpr.co.zw

Fidelity Printers and Refinery is a security printing and gold refinery company wholly owned by the Reserve Bank of Zimbabwe established in 1966. FPR operates from a printing and gold refinery plant located in Msasa Industrial area in Harare and a coin minting facility in Bulawayo

History

Reserve Bank of Rhodesia one pound note

After the Unilateral Declaration of Independence by Ian Smith in 1966 the British private banknote printer Bradbury Wilkinson & Co was ordered by the British government to cease printing currency for Reserve Bank of Rhodesia as part of sanctions against the Unilateral declaration of independence. The Rhodesian government then went on to sign a contract with Giesecke & Devrient which the first order was seized by the British Secret service as counterfeit Reserve Bank of Rhodesia subsequently refused to pay Giesecke and Devrient for the seized noteds. This forced Giesecke & Devrient CEO Siegfried Otto to quickly make arrangements to source and supply an old intaglio and background printing lines while he sourced for a new Super printing line as a sanction busting move. The equipment was delivered in secrecy to a South African registered proxy company. By the time the British secret service realised the printing machines had already been shipped across the border from South Africa into Rhodesia.[1] A few months later Siegfried Otto sourced and delivered five new printing lines for Rhodesia. This arrangement further strengthened the position of Lousenthal, a Gisecke and Devrient subsidiary, as a banknote paper supplier. A contract was then signed with Lousenthal being the banknote paper supplier to Rhodesia and subsequently Zimbabwe after attainment of Independence

The printing operations were to print banknotes and were done in total secrecy in the basement of the old reserve bank building. In a few years of establishment, Fidelity Printers with the help of technical partners in Giesecke & Devrient, Koenig & Bauer, SICPA and many others FPR achieved recognition as one of the best banknote printing operations in the world producing high quality, secure notes.

The company was then incorporated in 1978 when the Central Bank board decided to privatise and commercialise its printing operations. Fidelity Printers was then established in December 1978. After this the company was then moved from the basement of the Old Reserve Bank Building in the then Salisbury C.B.D. to Msasa Industrial area at number 1 George Drive. The new printing complex was designed in Germany and modelled around leading bank note printing plants in Europe. Construction of the building commenced in April 1980 and, was completed at the end of 1981. The plant was opened by the then Prime Minister Mr Robert G. Mugabe on the 11th of February 1982

Reserve Bank of Zimbabwe 1980 $20 note

Products include currency, passports, examination papers, travellers cheques, Commercial Bank cheques, passbooks and a wide range of other government security documents, gold and silver bullion. Some products are made to customer specifications and produced to international standards for domestic, regional and international markets. Dr L. Tsumba reported that The foreign exchange saving, arising from these activities, were impressive hence the decision in 2001 to establish a local coin minting plant.

Operations

The plant is equipped with some KBA Super Simultan, KBA Super Numerator, KBA Giori Super Orloff Intaglio (Colour), KBA NotaSys, KBA Rapida, Roland Favorit. With this the company has the capacity to produce over 200 million pieces of banknotes per year.Fidelity Printers and Refinery also makes use of some digital printing systems like the OCE Prisma system for light commercial jobs. For card personalisation and recharge cards the company operates Atlantic Zeiser and KBA Universys and Muhlbauer HSO systems. The passport department also employs Muhlbauer systems for passport and passbooks production. The plant still owns and runs some very old printing machinery like the Heidelberg printing presses.

Reserve Bank of Zimbabwe $100 printed in 2007 released in 2008

Security Printing

Products

Commercial Printing

Hyper-Inflation & Sanctions

During the hyper-inflationary years the company produced high denomination notes to beat the rapidly rising inflation rate in Zimbabwe. At the request of the RBZ under the stewardship of its governor Dr. Gideon Gono released several series of the Zimbabwe currency. The Highest note ever printed in the world was the Z$100 Trillion note Printed by Fidelity Printers and Refinery in 2008 when the inflation rate had breached 3,840,000,000,000,000,000% by September 2008. Most of these notes were largely rejected on the market mainly because there was no change for them and secondly lack of confidence in the value of the notes. People opted to trade in United States dollars, South African Rands and other forms of foreign currency. The rate of inflation and how fast the currency lost value could be seen in the watermarks on the banknote paper.[2] Some bills were printed on paper watermarked with 1000 in them denoting that the paper was intended for $1000 note which was the highest note in the country in other cases the huge figures were printed on paper reserved for 500, 100 or 50 dollar notes.

Reserve Bank of Zimbabwe $100 Trillion note printed by Fidelity Printers and Refinery

At the beginning of 2008 demand for cash tripled so that FPR could not keep up with the demand; they had to contract their technical partner Giesecke & Devrient to run a parallel production of a series of notes with different serial numbers to meet the ever rising demand for cash. The notes were then flown to Harare overnight and delivered to the Reserve Bank of Zimbabwe for distribution to banks and into circulation.Giesecke & Devrient would deliver 170 trillion Zimbabwe dollars weekly to the RBZ.[3] The economist John Robertson was quoted at that time saying " Cash shortages are an inevitable product of hyperinflation, Even at the official rate of inflation, it is stretching the central bank's ability to print new money to keep up with inflation and the subsequent rise in the cost of goods"

In July 2008 the supplier for Banknote paper to FPR, G+D, was pressured by the German government to suspend all banknote paper supplies to Fidelity Printers and Refiners. The reason cited for the suspension was that the company was supplying resources being used to prop up the Robert Mugabe regime by printing the currency which was then used to pay the militias, police and army to stifle the people from expressing their views and opinions about the government and voting against it. The money was used to set up networks of command bases around the country manned by liberation war veterans and youth militias, hired to terrify the population into voting for Mugabe in the runup to the June 27 presidential runoff election.[4] The G+D CEO, Dr. Karsten Ottenberg, was quoted a few days later saying "Our decision is a reaction to the political tension in Zimbabwe, which is mounting significantly rather than easing as expected, and takes account of the critical evaluation by the international community, German government and general public.

A few days later The Jura JSP software revoked their Banknote design software licensed to Fidelity Printers and Refinery. This move threatened to cripple the operations of Fidelity Printers and Refinery as the design department was crucial and integral to the printing operations, It had to constantly conceive new notes to replace the ones that were already on streets are rendered worthless by hyperinflation.[5] The Swiss company, SICPA, which supplied FPR with secure inks also gave in to pressure from the European Union and stopped supplying inks to Fidelity Printers and Refinery but however considered setting up an associate company in South Africa to bypass the sanctions in order to supply Fidelity Printers and Refiners with secure inks for banknote production. Unconfirmed reports say the company was indeed setup in South Africa and operated briefly enabling Zimbabwe to access inks from SICPA

While under sanctions the company had to immediately seek alternatives to secure quality banknote paper. FPR tried to secure alternative suppliers in Argentina, Indonesia, Russia and China. Representatives from FPR and the RBZ travelled to Argentina to inspect one of the companies which had expressed interest in supplying banknote paper but were however denied entry into Argentina despite assurances for Visas issuance upon arrival. The Pura Group of Indonesia also offered to deliver banknote paper within one and a half months of securing a contract. While this was being done a stop gap measure was implemented where Kadoma Papermills briefly switched into research and development mode in order to assist this turned out to be a very tough challenge as there was no technical expertise for the manufacture of banknote paper in the country. The company (Kadoma Papermills) managed to come up with a product which could be used as banknote paper though the quality was far below the expected.FPR was also concerned if ever there occurred a scenario whereby one of the KBA printing machines would fail or breakdown as this would have greatly crippled the country since the company had been sanctioned and all forms of material and technical support were being withdrawn by the German partners. Alternatives were entertained and briefly considered as a mitigating strategy however they were never taken up beyond the high level discussions as the Economy was then dollarised considerations were to purchase the Japanese made Komori currency equipment but no formal contact or expression of interest was ever made to Komori Corporation.

In a bid to ensure continuous production and supply of Banknotes the RBZ approached another local security printing company, Celsys, offering it a contract to print banknotes. This however did not materialise because the Zimbabwe Dollar was demonitised and production suspended three months later by the finance minister Tendai Biti

Gold Refinery

2014 First gold pour at Fidelity printers and Refinery since 2008

in 1987 the bank Board then decided to increase the company's role in national economic growth by adding a new operation which was Gold processing and refining at Fidelity Printers thus the company name was then changed to Fidelity Printers and Refinery. Initially the company had a production capacity of 50 tonnes of Gold per year at a purity of 99.999. with such production capacities the company was then awarded accreditation on the London Bullion Market Association (LBMA) was obtained in October 1989.[6]

"Gold from other countries is refined for either return to the customer or for sale, on the international market on behalf of the customer. The Refinery produces 400 ozs bars, to international standard and, fine gold for use by the domestic Jewellery Industry" [7]

Expulsion from London Bullion Market

The Gold production in Zimbabwe had been nose diving over the years from 10.960 tonnes in 2006 to 3.072 tonnes in 2008 which was more than 40 percent in production drop. On 30 June 2008 Fidelity Printers and Refinery was expelled from the LBMA because of failure to produce a minimum of 10 tonnes per year to maintain its membership.[8] Fidelity Printers and Refinery had been the sole authorised buyer and exporter of gold in Zimbabwe, because of its expulsion from the LBMA RBZ Governor Gideon Gono had to allow Zimbabwean producers to sell gold directly to international buyers. The failure was mainly attributed to the fact that the whole Zimbabwean economy was in a melt down and Fidelity Printers and Refinery being the sole buyer of Gold in the country under sanctions was failing to pay miners on time and competitive prices thus mines were now also shutting down. Some producers have criticised the government for making F.P.R. sole buyer of gold in the country while other people have come out to support the government like the economist Erich Bloch was quoted “It is absolutely right for Fidelity Printers to be the exclusive buyer of gold and that happens in South Africa and in other parts of the world." [9]

Zimbabwe Mint

In the year 2001 the Central Bank then founded the Zimbabwe Mint located in Bulawayo and handed it into the custody of Fidelity Printers and Refinery

References

  1. ↑ Klaus W., Bender (2006). Moneymakers: Secret World of Banknote Printing (First ed.). Germany: Wiley. pp. 194, 195. ISBN 9783527502363.
  2. ↑ McGreal, Chris. "Soldiers await pay as Zimbabwe runs out of paper to print money". http://www.theguardian.com. The Guardian. Retrieved 20 January 2015. External link in |website= (help)
  3. ↑ Latham, Brian. "Cash Shortage Resurfaces as Zimbabwe Currency Plunges Further". http://www.bloomberg.com. Bloomberg. Retrieved 22 January 2015. External link in |website= (help)
  4. ↑ "A crisis it can't paper over". http://articles.latimes.com. Los Angeles Times. Retrieved 20 January 2015. External link in |website= (help)
  5. ↑ "A crisis it can't paper over". http://www.latimes.com. Los Angeles Times. Retrieved 20 January 2015. External link in |website= (help)
  6. ↑ Tsumba, Leonard. "GOVERNOR'S ADDRESS ON THE OCCASION OF THE OFFICIAL OPENING OF THE ZIMBABWE MINT BULAWAYO, 31 AUGUST 2001". http://www.rbz.co.zw/. Retrieved 20 January 2015. External link in |website= (help)
  7. ↑ Tsumba, Leonard. "OF THE ZIMBABWE MINT BULAWAYO, 31 AUGUST 2001". http://www.rbz.co.zw/. reserve bank of zimbabwe. Retrieved 20 January 2015. External link in |website= (help)
  8. ↑ NEVER, CHANDA. "Zim expelled from bullion market". http://www.thezimbabwean.co/. Retrieved 19 January 2015. External link in |website= (help)
  9. ↑ Ray, Ray Ndlovu. "Mixed Feelings Over Fidelity Printers". http://www.financialgazette.co.zw. Financial Gazette. Retrieved 20 January 2015. External link in |website= (help)
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