Банкеръ Weekly



Ivan Ivanov, Manager of the Mint, to the BANKER weeklyMr. Ivanov, is participation in the management of the Bulgarian monetary system a challenge for you?- In the beginning it was quite unusual for me, but at the same time very interesting. In the Mint we make specific metal articles. In addition to the stotinki and the BGN1 coin, we make medals, orders, various decorative and prize articles. We get some 40-50 orders per month on average Don't you have competitors in the person of private firms?- I'll explain. The coin is a piece of metal with a nominal value. It is issued by an official institution - the central bank. So, coins are made in the Mint alone on the order of the Bulgarian National Bank (BNB). There can be no other such enterprises. Therefore, we hold a monopolistic position in that respect. In recent years some private workshops appeared which make artistic metal objects, as well as medals and plates. With all my respect to the talented people working in them, I should say they cannot achieve the quality of our articles because they do not have the necessary technology for that. How is the Mint financed and what is its annual profit?- Since 1997 we are 100% owned by the BNB, but it does not finance us. We have been registered as a single-member limited liability company under the Commercial Code and we try to profit from our operation. Our relations with other institutions, entities, etc., including those with the central bank, are governed by contracts. The company has 92 employees on pay-roll who get an average monthly wage of BGN 700-plus. We have the financial resource for introducing novelties in the branch, such as equipment, technologies and new articles. We have recently invested EUR450,000 in a machine for minting coins.Production of stotinki and the metal BGN1 coin is paid by the BNB, but we get a tiny profit from that. The Mint's net profit for 2003 was BGN300,000 and the trend is for a slight increase each year. Our annual turnover is about BGN5MN and the output we sell abroad is worth more than EUR1.5MN. Most of our orders come from the European Union. The fault of exchange coins is that unlike banknotes they are not easily worn out. That is why BNB's printing house makes new banknotes all the time to replace the worn-out or destroyed money, while there is no great demand for the stotinki and the metal BGN1 and orders are gradually decreasing. We mint about 50 million coins a year, which is below our production capacity. We could mint say 150 or 200 million coins a year. For comparison - the USA mint some 14 billion coins a year, although non-cash payments are most frequent there. Canada, which has a population of about 30 million, mints some 1.5 billion coins annually. Will you mint a coin of BGN2 par value? Banknotes of BGN2 are also easily worn out?- There was such an idea, but as the euro is to be soon introduced, it is not profitable to mint coins that we'll have to melt again in four or five years. Does the Mint make itself the metal alloy for the coins?- We get them from abroad as is the practice all over the world. The BNB invites tenders for specialized producers. We only press the coins in te Mint. Earlier, everything was done here, in the Mint. But it is already the 21 century and their is division of labour.Are you ready to mint euros and euro cents after we join the eurozone? - BNB's strategy projects that when the country becomes a member of the eurozone we'll mint the euro coins and print the euro banknotes in Bulgaria. Until then, however, the Mint should be reconstructed and modernized in order to fulfil the requirements of the European Central Bank (ECB). Afterwards we'll apply to the ECB to get a certificate and only when we have it Bulgaria will be entitled to mint euro coins. Two weeks ago we were granted an ISO 9001 quality certificate but it is not sufficient. The ECB exercises a very strict control. The accent will be laid on the modernization as per European standards of control and security systems.Meanwhile, we undertake current repairs and reconstructions. We are presently reconstructing the galvanizing workshop to improve labour conditions and environmental protection. The purification station is to be reconstructed next year. I'm convinced we'll be able to prepare for the euro in 2009. Have there been any attempts to counterfeit exchange coins?- Periodically, there are attempts to imitate the 50 stotinki coin, but they have always been of a very poor quality and are easily told from the real ones. With the state-of-the art technical equipment and technologies it is much more easier to print fake banknotes than to counterfeit coins, for which one needs a matrix, and metal alloy, while their par value is small and it is difficult to dispose of them. That is why frauds with coins are much less than those with banknotes. Which of the commemorative coins is of greatest interest to numismatists and connoiseurs?- The commemorative golden coin The Blessing Virgin Mary with a nominal value of BGN 20, emission December 2003, was the most demanded one. The entire issue of 20,000 coins was sold out within less than two weeks. The coin with the effigy of St. Nicholas the Wonder - Worker, issued some weeks ago, also sold very quickly. Is there still a holiday which you have not commemorated by issuing a coin?- By law it is BNB's Board of Governors that decides what jubilee coins should be issued, how many, with what design, and at what price they will be sold. They are in fact a part of Bulgaria's history. They not only commemorate an event of national importance, but should also have a market value. Holidays, which used to be celebrated by manifestations or were overexposed by books and films, would hardly provoke interest. That is why, other events are sought. By March 2005 we should sign with our principal - the BNB - common rules for issuing coins. We'll publish in the central bank's website an address where everyone will be able to send proposals. We'll also publish a list of restrictions. For instance, it is not proper to dedicate a coin to an alive person, to military action or battles, or connected with regional or regularly occurring events.As the commemorative coins are not a commodity of immediate necessity, their market increases concurrently with the overall economic stir-up. In the last two years we minted small quantities which sold out very quickly. The tendency is to gradually increase them until we establish the equilibrium. Collectors' items are expensive anywhere in the world. We hope that gradually we'll manage to come back to the level of 1990 when organized numismatists in Bulgaria were more than 12,000.Are western collectors interested in the coins that you produce?- It happens very seldom. But our medals are appreciated by the West. Every year we produce some 200,000 - 250,000 medals of top quality, ordered for export to Europe. Last year we only received claims for 40 pieces and that's an insignificant percentage. We also achieve good results because of the double checking system that we've introduced. We consider even the smallest speck on the lustrous or dull surface waster.We apply techniques that are unique and are our own patent. We received an inquiry by the Finnish mint about whether they could send here people for training. We also made copies of German coins that are produced from a special alloy. We received a letter from the Berlin mint which asked us to supply them with billets of this alloy.The Mint looks like a fortress that cannot be taken. Do you feel well protected?- We have sufficient protective systems - cameras, entrance and exit regime. The police care about the security. Apart from the electronic security systems and the armed police officers we also use specially trained dogs.

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