Robert Huber
At a 125-year-old factory in the shadow of the Swiss Alps, veteran watchmakers, trusted for their keen attention to detail, pore over the drums that will embed detailed watermarks into pristine sheets of paper stock. But not just any paper stock. Fortress Paper's Landqart mill manufactures the security paper used to print passports, banknotes, bonds and even the certificates of authenticity that ship with each shiny new Rolex watch.
For Fortress Paper, the Vancouver-based company that owns and operates Landqart, the business is about as different from Canada's beleaguered pulp and paper industry as a company can get.
"With those traditional commodity papers, raw material goes in-pulp, water, chemicals-and when the finished product comes out the end, you package it and sell it," says Chad Wasilenkoff, Fortress's 37-year-old CEO, on the phone from his office in Vancouver.
"With banknote printing, it starts in the design phase." Among the complex procedures that go into the creation of a future euro, Swiss franc or passport are treatments to bolster the paper's resistance to wear and tear, as well as the application of watermarks and OVI (optically variable ink) strips, which cause the notes to change colour when tilted. "We view ourselves as a technology company on a paper platform," says Wasilenkoff. Orders are booked solid through 2010.
The young CEO has made a career out of breathing new life into fragile companies in distressed sectors. After revitalizing Titan Uranium Exploration Inc., Wasilenkoff began looking for undervalued niches within the forestry industry. In 2007, Fortress purchased Landqart AG, a century-old security paper company with some old-world cred (Landqart is the exclusive manufacturer for the venerable Swiss franc, and has supplied euros to 10 of the 27 European Union member states-though, for security reasons, Wasilenkoff isn't allowed to say which ones). Now, Wasilenkoff is banking on innovation to put Fortress paper in as many wallets worldwide as he can.
In December, Fortress unveiled a new product called Durasafe at the Banknote 2009 conference in Washington, D.C. The new paper is more durable than most currencies in circulation, and allows banks to incorporate nifty-and difficult to counterfeit-features like transparent windows of varying size and shape. Fortress has invested almost $15 million over the
past seven years perfecting the new notepaper. "Unfortunately, in this industry, you can't sell anything with a PowerPoint presentation," says Wasilenkoff. "You have to have all the equipment, all the manufacturing, full-scale production samples for these national banks to review. Then they go and do their thing and, if it works, the orders start to roll in." Consider it the latest twist on the old adage that you need to have money to make money.