Thinking about a successful business you would think about a product or products that are most demanded by most of the consumers or most of a certain group of consumers. But what would you say about covering all the population of a country. Sounds intriguing, doesn’t it? That may sound hypothetically for some, but not for Goznak. It is a unique Russian enterprise in the field of security printing, paper and coin and order production, and it is important for the activity of the whole country. There are only a few similar enterprises around the world, and there is no analogy in Russia. The products are used by every Russian citizen and every foreigner (banknotes, coins, orders and medals, passports, postage stamps etc). But what is hidden from every eye is the technology of the production. Branches of Goznak are located in Moscow, Saint-Petersburg and Perm Region.
Short history overview
The establishment of the current Goznak system was actually due to the tribulations of the Civil War. It is not surprising because there had to be very serious reasons to force the Government to move money manufacturing from one location to another. Very poor supply and the threat of Petrograd occupation forced the Bolshevik Government to evacuate the Forwarding Agency and subsequently move the banknotes printing works from place to place following the movement of the Civil War fronts. The situation in the country was changing every day and the Government had no clear picture of the future management and the government structure, therefore the equipment was taken to various locations. Those were the reasons that led to the establishment of the Penza Printing Factory (which was soon partially evacuated to Perm), the Moscow Printing Factory and the Petrograd Paper Mill of the former Forwarding Agency in the Soviet Russia in 1919. The new scattered business in various locations had to be somehow managed and at least coordinated. Therefore on July 6, 1919 the People’s Commissariat of Finance of the RSFSR issued a Decree on the Management of the State Papers Stock Factories. It was then, that the structure of Goznak was set up in the form of an association that executed the whole process cycle of banknote manufacturing and incorporated several factories involved in different stages of the production cycle. To a certain extent, the principles of the system management, selected in those days, are still practiced today. Later learning to navigate in the financial world Goznak was trying to find the best ways to deal with Russian and international financial situation. Thus, due to the clever and clearly planned financial policy it became possible to fully eliminate the devastating consequences of the revolutionary financial anarchy and create a stable financial system, based on the internationally recognized and valued new monetary unit, which is the Soviet chervonets, within 2 years. The Great Patriotic War has become another “endurance test” for Goznak that proved efficiency of the established system organization and production management. The fact that Goznak incorporated several factories that were involved in various stages of banknote manufacturing (paper making and printing) considerably simplified the challenge of evacuating production facilities. The major factor that contributed to the success of banknote manufacturing during the war was the Krasnokamsk Paper Mill that had been built in the 1930-s. The fact that banknote paper manufacturing had not been concentrated exclusively in Leningrad before the war, that was cut off from the rest of the country due to the blockade since September, 1941 prevented the necessity to set up a new paper mill production facility somewhere else, it was only necessary to increase the production load on the Krasnokamsk Paper Mill. Moreover, the Mill had additional production space that could accommodate the major part of the printing equipment evacuated there from Moscow. The Leningrad Mint was incorporated into Goznak in autumn, 1941. That decision was made due to the critical war conditions since the city was almost enveloped and the Mint had to be urgently evacuated in Krasnokamsk. It should be noted that alongside with minting coins, the Krasnokasmk Mint also manufactured orders and medals from the very first days of its operation, that was a heavy burden in the times of war. It should be noted that on the whole, Goznak managed to efficiently arrange its work in conditions of evacuation and provide uninterruptible manufacturing of its products during the war. During the period of 1990-1995 over 300 million USD were totally spent on Goznak upgrading. It purchased the best printing and papermaking equipment made worldwide. Comprehensive upgrading has turned Goznak into one of the most modern businesses in this area worldwide. Today the company can perform the whole cycle of security printing at the highest international standard level, manufacture various coins, medals and the products of general printing. Since 1990-s, Goznak has been manufacturing plastic cards. Being an independent commercial company Goznak has been successfully integrating into a modern market economy competing on the market as equal with the leading world manufacturers. Besides space industry and some enterprises of the defense industry, it is probably one of the few examples of manufacturing facilities in Russia keeping up with Western standards.
Today Goznak includes eight enterprises, which are Moscow printing factory, Perm printing factory, Moscow printing plant, Saint-Petersburg paper factory, Krasnokamsk paper factory, Moscow minting plant, Saint-Petersburg minting plant, and research institute in Moscow with almost 10 000 staff in total. Most of the products of the company are security printed products. Goznak is the only currency (notes and coins) producer for the Central Bank of Russia. Apart from that excise stamps, passports, documents forms and securities and other printed products that require special protection are produced. The company also produces different kinds of paper including office and offset paper. Goznak is not just the only producer of Russian passports forms, but also the only personalization center of the electronic passports in Russia. Goznak’s mints produce a wide range of monetary and order products that include coins, order, medals, jewelry, watches, and souvenirs. The Goznak enterprises are certified by the international payment systems of Visa and MasterCard and produce plastic cards ordered by commercial banks. What makes Goznak so special is the printing and protection technology used on its enterprises. All of Goznak enterprises are certified according to ISO 9001 management systems. Another interesting fact about Goznak is that it has its own research institute. It allows the company to be independent of the security technologies developers, which is a great way to save money on royalty and to offer unique personal protection of printed materials to the customers. Developing its own protection technologies, Goznak is able to sell its technologies to other companies. Major Goznak products consumers are not only different Russian state organizations, but also banks, polygraphic companies and other companies. The company’s export is about 7 percent of total sales. Goznak have supplied over 20 countries with banknote paper over the last 5 years. Banknote paper is being supplied to such countries as Indonesia, Nigeria, India, the countries of South-Eastern Asia, Africa, Latin America, and Europe. The banknotes printed by Goznak are in use right now in almost 10 countries. In 2009 Goznak printed banknotes for 5 foreign countries. All of the Goznak products meet the highest requirements of the central banks. 2009 was the year of starting new activity for Goznak. The project of creating the first high tech integrated brands protection system in Russia. This system includes the complex of visual and covert polygraphic and electronic ways to protect the licensed products with the symbols of the Olympics in Sochi in 2014. All of the products with the symbols of the winter Olympics in Sochi will have a relevant protective marking. The activity of the enterprise does not have essential negative impact on the environment. The Executive Board of Goznak realizes its responsibility for the environmental conditions, rational exploitation of natural resources, ecological safety of its products, the health and welfare of people living in the areas of influence of the branches of the enterprise, and commits itself to adhere to the requirements of the Federal and regional legislation, regulatory requirements in the field of environmental management and environment protection applied to the activity of Goznak. The enterprise conforms to the requirements of the Russian and international standards in the ecological management field; takes all possible actions to decrease or prevent negative impact on the environment taking into account the modern level of technological expansion and the financial capacities of the enterprise; improves the ecological management system of Goznak all the time. The Executive Board of Goznak assumes its responsibility for the present policy realization by means of definition of corresponding goals and aims, allocation of necessary organizational and financial funds for their achievement, for control and evaluation of the environmental activity, the way the enterprise ecological management system is functioning. Even after a short overview of Goznak’s activity, it is obvious that the business is successful, growing and developing. Maybe it is because the government itself is interested in it, or maybe it is because of the unusual products being produced, or is it the management decisions taken along the way? Well, most probably it is all together that makes Goznak past and present the way it is.
Written by Kateryna Ferdyn