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SecureID’s card manufacturing initiative: An overview

20 January 2015   |   11:00 pm
Manufacturing has linkages with all other sectors of the economy. The progress of manufacturing still sets the tone for the overall business cycle while the health of this sector is very much at the core of the sustainability of any viable economy. Manufacturing has large stakes involved, not just because the sector employs an appreciable…

 --AgangaManufacturing has linkages with all other sectors of the economy. The progress of manufacturing still sets the tone for the overall business cycle while the health of this sector is very much at the core of the sustainability of any viable economy. Manufacturing has large stakes involved, not just because the sector employs an appreciable percentage of workforce in Nigeria, but also because of its contribution to the overall Gross Domestic Product. SecureID Limited recently embarked on a backward integration process to aid smart card manufacturing in the country while addressing Nigeria’s dependence on imported cards. FEMI ADEKOYA examines how this move may bridge the demand-supply gap in the cards industry while preparing the country for the export market.

IN the last few years, the Nigerian card payments channel has recorded strong growth both in terms of volume and value. 

   Specifically, market research shows that the card payments channel grew from 30.5 million cards in circulation in 2009 to 56.1 million cards in 2014, with a projection that cards in circulation may hit 81.4 million in 2018.

   According to the study, the growth has been hinged on Nigerian government’s efforts to move its cash-based economy towards non-cash payments.

  With so much expended on importation of cards, SecureID Limited, a Lagos-based company, embarked upon a backward integration of smartcard manufacturing process that led to the company building its first personalisation plant in 2006 using advanced technology equipment to personalize imported smartcards for various purposes across different sector of the economy.

  In 2008, SecureID took the lead to backward integrate into milling and embedding; a core aspect of personalization.

  With the commissioning of its new and first polycarbonate plant in Africa, the company hopes to increase its focus on the polycarbonate card body production and high security designs.

  To aid the sustainability of such investments, the Federal Government unveiled plans to continually review tariffs and waiver granting as part of efforts to encourage local content development as well as improve capacity utilization of manufacturing companies in the country.

   President Goodluck Jonathan, while speaking at the commissioning of the EMV certified smart card manufacturing plant of SecureID Limited in Lagos, stated that his administration had formulated and implemented policies to drive the growth of innovative products that would further aid the realization of a digital economy.

   President Jonathan, who was represented by the Minister of Communications Technology, Mrs. Omobola Johnson, noted that with the cards market still growing as a result of growing needs of the teeming population, it has become necessary to discourage excessive importation of services that can be offered in the country.

    He added that the commissioning of the factory is a concrete result of his administration’s transformation agenda, stressing that government is unrelenting in its drive to encourage local investors to remain competitive in the country through favourable policy formulation and implementation.

   “Smartcards or cards with embedded chips are key to our digital existence. Consider the everyday uses to which we put various SIM cards, biometric identity cards, and debit & credit cards used in the finance industry. Increasingly they are becoming part of our personal and corporate staple.

   “Preliminary estimates indicate that there are currently about 150 million active SIM cards, 110 million biometric ID cards, and 15 million credit and debit cards in Nigeria. 14.As more financial inclusion schemes, requiring more bank cards are rolled out and the different States roll out ID projects, these numbers are expected to experience double-digit growth.

  “We are here today to launch SecureID’s bold vision to “backward integrate” into an end-to-end smartcard manufacturing company. This venture has been conceived in collaboration with acclaimed leaders in the global smart card industry. SecureID’s products include SIM cards for the telecommunications sector, debit & credit cards for the financial sector and high security E-ID polycarbonate cards for the most sensitive identification needs. 

   “Previously, this sort of venture would have been unprofitable. Import tariffs heavily skewed to the advantage of imported finished cards would have made it difficult for local manufacturers to compete on cost. A collaborative engagement between the Ministry of Communications Technology and the Ministry of Industry Trade & Investment has resulted in a review of the import tariffs on the key inputs for smart card manufacturing. This has created a level playing field and a basis for better competition between locally manufactured and imported smart cards”, President Jonathan added.

   On his part, the Minister of Industry, Trade and Investment, Olusegun Aganga, who was represented by the Managing Director of Bank of Industry (BoI), Rasheed Olaoluwa added that the company had gone through two phases of backward integration in a bid to effectively commence local production of cards in the country, stressing that the feat remains a testimony as regards the National Industrial Revolution Plan (NIRP) and local content policy of the government.

     Olaoluwa explained that BoI remains committed to its development financing responsibility having provided financial assistance to the firm for the procurement of plant and machinery.

   According to him, the bank derives a sense of fulfillment from the manner in which the company has utilized the funds.

       “We are witnessing a successful backward integration of activities in the card industry through local production of cards. The company has established capacity and smart manufacturing techniques. As a customer of our bank, we have supported the business and this shows that the facility has been effectively utilised”, he added.

   The Managing Director of SecureID Limited, Mrs Kofo Akinkugbe, noted that the company has the capacity and the quality of operational and administrative personnel to produce chip and PIN based smartcards that support payments and biometric identification, verification and authentication purposes.

  According to her, the company’s local production of smart cards for the financial sector, telecommunications and public sector has reduced the level of imports and exposure to the foreign exchange market.

    “The journey of what we are witnessing started in 2006 and is a product of dogged and focused determination in the face of very challenging circumstances. Our vision from inception was to set up a full local content end to end high security smartcard manufacturing plant from raw material stage to finished personalized smart cards, operating transparently and with integrity and the highest business ethics. We have had to backward integrate over two stages on the value chain to get to this final stage over the 8 years.

    “I am proud to say that SecureID is a truly Nigerian indigenous company of globalstandard, 100 per cent owned by Nigerians with 95 per cent of its workforce being Nigerians. Ofsignificance is also the fact that we have actively sought and successfully repatriated a number of very smart young Nigerians with the requisite technical skills, thus helping to reverse the brain drain in a very sensitive area”, she explained.

   With a capacity to produce 200 million card yearly, she added that local sourcing of raw materials and effective market analysis has assisted the firm in filling gaps discovered in the market while giving it the capacity to produce products that could serve Nigeria and other West African countries.

   She further stated that the company is building a recycling process that would help the nation to address waste of raw materials in the economy.

   “This state-of-the-art smartcard manufacturing facility aids the local production of SIM cards for the telecoms industry, bank payment cards and high security polycarbonate identity cards for the private and public sectors. This great effort is in line with the nation’s vision of actualizing local content production.

   “SecureID provides turn-key solutions for the smartcard identity industry from project start, through design, manufacture and personalization to final card packaging/fulfillment. SecureID supports a wide range of card products such as EMV SmartCards, GSM SIM cards, Magnetic-stripe debit cards, Loyalty cards, Contactless dual interface chip cards, Multipurpose secure identity cards and Mifare cards,” she added.