SURYS – Acquisitions Point to Ambitions in Physical and Digital Security

SURYS has been part of the French state-owned security solutions provider IN Groupe since 2019. Traditionally one of the smaller suppliers of optically variable security features for banknotes, it is setting its sights on a larger share of the market, as evidenced by its emphasis on R&D, a growing portfolio of features, and the recent acquisitions of Fabriano from Portals Paper and, earlier this month, Gleitsmann Security Inks from Huber.

The company’s goal is to become a leading supplier of secure components for currency in the same way that it already is for passports. And these components aren’t just physical. Thanks to the expertise and support of its parent company, it has a head start in digital technologies, and is setting its sights on the growing market for digital currencies too.

Currency News spoke to Frederic Trojani, CEO of SURYS and Executive Vice President for the Secured Components Division of IN Groupe, about the company’s history, how being part of IN Groupe is helping it fulfil its ambitions in the currency market, and the benefits that the two recent acquisitions will bring.

Q: Tell us a little about yourself. How did you end up at In Groupe?

A: I started around 40 years ago in a completely different type of business, with Schlumberger. After 20 years I joined the smart card division of Schlumberger, which had been spun off in 2003 and became Axalto. Axalto merged with Gemplus and in 2006 it became Gemalto, which is where I discovered the security world. It was not at all my business before, but I’ve been in this security environment for close to 20 years now.

I joined IN Groupe around three years ago, to lead the new strategic business unit in charge of components inside the company, and was appointed CEO of SURYS in 2020.

Q: Can you describe that business?

A: Inside IN Groupe we have three main divisions. One is in secure identity, dealing mainly with the end-to-end identity solution. The second one is more around services, digital identity, and the third one is secured components.

Inside the Secured Components division there are now three main brands, the first being SURYS and the second SPS, Smart Packaging Solutions. SURYS was bought by IN Groupe at the end of 2019, just before I joined. We have now acquired Gleitsmann Security Inks as well, which is the third brand in the portfolio.

The strategy of this division is to provide a complete portfolio of secure components to different actors in the market. Our value proposal is to provide not the complete document, but the different components within it, which the customer can use to build their own complete document.

We are seeing that there is an increasing requirement for sovereignty in the market. Different countries are building their own national printing houses, and we provide the secure components and the know-how, and the country can then develop their own local manufacturing for different types of secure documents.

Q: Can you provide some details about IN Groupe and SURYS in terms of the markets they serve?

A: Under the guidance of Didier Trutt, IN Groupe has been completely transformed over the past 10 years from a public printer to a company which is now able to provide a complete identity solution, including digital identity, PKI, and secure components. IN Groupe is currently doing 50% of its revenue outside France. The Secured Components division has 95% of its revenue outside France. So, despite being owned by the French state, we are truly international.

SURYS is one of our main brands in the Secured Components division, which is addressing three markets mainly. There’s the payment market, where we provide the extremely durable contactless solution for banking cards, and we had excellent traction and huge market growth during the COVID period with the adoption of contactless smart cards all over the place.

The second market is identity. In identity, we are number one in supplying the laminates for passports. We are also providing holograms to car manufacturers and here we are also number one in the world.

The third market we’re addressing is the banknote market. This is the market where we are more of a challenger and clearly this is an area of growth and development for which we are investing in research and development. We are also investing in manufacturing, internal investment but also through acquisitions. The recent acquisition of Fabriano Security provides a larger portfolio, with the paper maker, to address the banknote printers and central banks with our security features.

Q: And Gleitsmann Security Inks, or GSI as they are known?

A: GSI is an established supplier of inks – intaglio, offset, silkscreen – as well as varnishes for the banknote and ID markets. It has grown well recently under the management of Ulrich Walter and is very innovative, having launched a number of new inks recently.

Q: Are you able to say what the split in revenue is between those three sectors – banknotes, identity and payments?

A: We don’t communicate these types of figures, but in terms of percentage, payments is around 50% of the turnover of the secure component business unit. Identity is around 30% and banknotes around 20%.

Q: Your main office is located in Bussy-St-Georges, just outside Paris. Do you have other offices?

A: For SURYS, the main offices and manufacturing centre are located in Bussy-St-Georges. We also have a manufacturing centre in Connecticut, where we are producing secure labels for windshields and number plates to the different states in the US. We also have an R&D manufacturing centre in Germany where we produce printers for the personalisation of passports and cards.

Now we’ll have another centre in Italy with the Fabriano site, which is located in Bollate, close to Milan. And we’ll have a base in Berlin too, through GSI, which is headquartered with its production facilities there.

For SPS, the main manufacturing centre is located in the south of France, close to Aix-en-Provence.

There are also sales offices in the Middle East, Singapore, and the US.

Q: How many employees does SURYS have?

A: SURYS employs around 300 people, and the Secure Component business is just under 700 people. GSI will add a further 80. IN Groupe employs close to around 1,900 people.

Q: SURYS’ origins were a hologram company. Indeed, it used to be called Hologram Industries. How would you characterise it today?

A: The main expertise remains around optical effects. Holograms were the first, and now we are introducing new security features like the Plasmogram. SURYS is really the expert in in optics and we are using this knowledge to secure different type of documents, whether identity documents, or labels for cars, or banknotes. So the core knowledge of SURYS continues to be around security features based on optical technology.

This knowledge is used for different types of materials and chemicals, so that they can be combined on different types of documents because the constraints are very different between an ID document, a banknote or a smart card.

Q: If we focus now on the banknote market, SURYS scored an early success with the Alphagram used for the first euro series, and your DID feature on the Philippines 1,000 piso, along with more recently a feature on the new polymer 1,000 piso. But you haven’t really built on that success. What’s been stopping you?

A: When I joined, my strategy was to further develop and further invest in the banknote market. That has been quite successful with the new references.

The first one, which is quite important, is the 1,000 piso polymer banknote with the Plasmogram™ technology, which was launched last year Our technology fits very well with the polymer substrate.

We are currently delivering in Egypt with the new 20 pound note, also based on polymer technology. We are also delivering volumes to Brazil.

But it takes time. I used to have a very long sales cycle when I was in the smart card industry, but it’s even longer for banknotes. Between the time that you start to design the new series and the time you have your security feature in the field, there are two to three years, sometimes even four or five years. It’s not investment for short term, it’s a long-term decision to invest in this activity.

But I’m pretty satisfied with the commercial development after two years. We now have large references which will help continue to grow and develop our activity in the banknote market.

Q: You specialise in optical effects – DID™, Alphagram™, Plasmogram, TriStar™ and now Vibes™ threads – but success in the banknote arena is dependent not only on the optical effects, but also the material science for foils and laminates that are converted to threads. Do you have that material science capability as well?

A: Yes, we have a dedicated engineering team in charge of structure and materials. Their mission is to insert our different optical effects into the different materials.

Another reason for the acquisition of Fabriano Security is the capability to convert all these foils into different threads. Adding features like magnetism or liquid crystal, and slitting threads, were not things we were able to do before. So it’s a very complementary acquisition and we are now covering the entire type of security features that could be offered to the banknote market.

Q: Was the acquisition for product or market reach?

A: Both. Fabriano Security has been in the banknote market for over 20 years. They have been and they are still a supplier to the Eurosystem so they have market reach, which is very interesting for us, on top of what I already said on the product side. It’s for market reach, market history, knowledge of the different central banks and some additional security features and product.

Q: And the acquisition of GSI? What was the rationale for that?

A: It is part of our strategy for a complete set of security components for printers – whether for banknotes or ID documents. It might be a new area for us, but there is huge complementarity in the technology as well as market opportunities – providing us with the ability to supply national printers with a wider range of products.

GSI has also invested heavily in R&D, which is in line with our own philosophy.

And we see growth opportunity too for GSI in dual-sourcing. There is one very dominant market leader in inks, but more and more customers now want to dual source, and GSI – with its portfolio, references in the banknote market and innovation – is the perfect second company for customers with a dual source policy.

Q; How easy is it to break into the security market at scale without either a print or a substrate partner? Is being an independent components business an advantage or a barrier?

A: I think that is an advantage, as we can focus our R&D in developing the best security features with a ‘wow’ factor for different actors and different types of substrate manufacturers. This could be polymer, hybrid, or paper, and we’re agnostic in terms of, say, paper maker or printer. We think that this positioning is quite interesting for our customers and we have good traction in the market as a result.

Q: With reference to the ‘wow’, all the major banknote players are coming out with a micro mirrors or micro lens type feature. Do you have an equivalent or are you developing an equivalent to these?

A: We are working on that and we already have several products in our roadmap around this micro-optics technology, including most recently Vibes, a reflective feature with movement and colours which derives its name from the vibrating effects that the technology uses.

Q: How has becoming part of IN Groupe changed things for SURYS?

A: It has enabled many very positive things, because when you deal with governments or central banks it’s good to have a strong owner with a good reputation and financial capabilities. The central banks want a long-term relationship and they prefer to work with a company with strong assets and credibility, and IN Groupe has a history of more than five centuries.

We are owned by the French government, so that also gives strong stability to the company and SURYS’ service is benefiting from this asset. The same applies to GSI, which similarly has the support now of a government-owned entity.

We also have the capability to enter into contact directly with some governments, which helps our market access in different countries.

Moreover, IN Groupe has the capability to support our growth in terms of external acquisitions and R&D and, as we are part of the group, we are clearly leveraging the different expertise inside it.

We have our engineers, not only in optics and materials, but also in electronics and in different types of semiconductor technology and, of course, with the acquisition of GSI, inks too. There are a lot of areas such as digital technology where we can further develop security features, not only physical but also digital. For example, we have a product called Photometrix, which is a secure code which will help to protect the photo, for example, and this has been deployed in several countries on entry range identity documents.

We will also be able to build, and we have already started to build, an offer for digital currencies because these are strongly linked to authentication and identification of the owner. We have the complete set of tools thanks to the IN Groupe software platform, which allows us to build an offer around CBDCs.

So we now have a complete set of technology, which was not the case when SURYS was a standalone company.

Q: With much talk these days about ‘phygital’ – namely, the bridge or overlap between physical and digital technologies – it sounds like you see a future there for SURYS.

A: We are in the centre of the phygital strategy of the group, building on our hardware security features to develop more and more digital security features.

This is what we are also doing in the Secured Components division, moving more and more towards digital features. In the payment and banknote markets we will probably have an interesting transition time, so between the pure paper banknote towards more digital currency, but it will take, as usual in the payment world, 20-30 years.

In the meantime, we will have a lot of different interesting components, so banknotes which could store CBDCs for example. We have all the technology to do these type of things with our expertise, in the optical domain in materials, but also in the electronics and semiconductors.

Q: Where do you see the banknote market for SURYS being in five years’ time, versus your strength in the ID market?

A: The goal is to be at a similar position in the banknote market to the one we are currently at in the identity market. A good reputation with our customers, because it’s important to build the reputation step by step with the success of our new product with different key customers. We are currently working with several of them so I can’t disclose the name of the most important one.

Q: Finally, looking at your portfolio now, you have a lot of breadth and depth in technology. How would you summarise your unique strengths in the banknote market and your unique selling points regarding supplying features versus others?

A: There is not one feature, it’s a combination of different strengths. There is the technical aspect, the optical features, and the fact that we are experts in this domain.

On top of that we have the capacity to be extremely reliable and backed by a stronger owner, which is very important, versus some of our competitors.

We also have the capacity, and now with Fabriano, to offer a complete backup plan in terms of manufacturing, which is also very important for central banks or for identity national printers.

It’s a combination of the features which come from R&D, but also the credibility and stability of the company, and the capability to provide the redundant manufacturing.