DLR's banknote paper problem.
De La Rue announced on July 20th that some of its banknote paper production is not meeting the contracted specification. As this was a formal trading statement the implication is that this is, or could be, a serious problem.
The company declined to provide details of what was wrong with the paper, other than it had failed to meet 'certain quality specifications' but said that 'production and shipment of this specification paper had been suspended whilst the circumstances are fully investigated'.
De La Rue has only one paper mill dedicated to banknotes, at Overton, UK. It is not clear whether the whole mill or just a single line was affected, nor whether any of the faulty paper involved the use of holograms, which in strupe form are usually added to banknote paper at the mill. But it is known that the company has a new contract for the supply of banknotes with a hologram and previous experience, for example by other companies producing the euro, show how critical the matching of substrate and adhesive is.