KOMSCO Implements Emergency Measures

The state-run Korean Minting, Security Printing and ID Card Operating Corp (KOMSCO) has announced the implementation of an emergency management system in the face of losses sustained last year.

According to KOMSCO President Ban Jang-sik, who has only been in position since the start of this year, adverse business conditions included a sudden decrease in passport issuance due to the prolonged pandemic, and the company urgently needs to discover future growth engines, particular in this, its 70th, year.

It is a far cry from the company’s results for 2019, in which it announced a record seventh year in a row for sales and profits. Last year still saw an increase in sales, albeit a modest one of 1.3% to 531.7 billion won, but a record operating profit in 2019 turned into a loss of 14.2 billion won.

Various factors were behind the loss, including the number of passports issued falling by 70%. Another business stream, love gift certificates, also fell sharply. In addition, in relation to bullion medal sales, the accumulation of allowances for bad debt due to delays in the collection of accounts receivable to trading companies has also had an impact, whilst ‘excessive sales promotion’ is cited as another factor behind the deficit.

KOMSCO is a full-service currency provider – papermaker, printer and also supplier of features. It also mints coins and medals, ID cards and passports and anti-counterfeiting technologies for brand protection. Declining demand for cash resulted in revenues in this area dropping by nearly half over the last decade, prompting the company to diversify into new business areas – bullion medals being one (which in 2019 was a star performer, with customers around the world and accounting for nearly a quarter of all sales), along with mobile vouchers, eID and blockchain certification services. Together, these new businesses accounted for over half of revenues in 2019.

But the rewards reaped by this diversification appear to have gone into reverse. As a result, KOMSCO has been organised into six emergency management task forces (TFs). The Future Growth TF is in charge of discovering future growth engines and reorganising the business structure. The Business Advancement TF is in charge of establishing development strategies for each major business. The Bullion Business TF will focus on that part of the business, whilst the Global TF will seek ways to advance exports, and the Technology Development TF to enhance technological competitiveness by securing core technologies.

In addition, said President Ban Jang-ski, KOMSCO will pursue management rationalisation such as ‘cost reduction and unnecessary adjustments of investment’.

‘The Mint Corporation is facing a fierce challenge on its 70th anniversary’, he stated. ‘I will make it.’