Malta loses out as De La Rue drops Brexit passport appeal

The security printer De La Rue has abandoned its appeal against the UK government’s decision to award the UK passports contract to an overseas rival – which means its Malta plant will no longer be printing blank book passports for the UK after 2019.

The decision to abandon the appeal came with a profit warning, hitting the British passport and banknote producer’s share price.

De La Rue said it would discontinue its challenge to grant the contract to print ‘Brexit passports’ to Gemalto, a French-Dutch rival.

The Malta plant prints back-up passports to the UK every three months, as part of a fall-back supply for the UK printing plant in Gateshead.

A company spokesperson told MaltaToday the Malta secure facility produces a maximum of 7% per annum of blank books for business continuity purposes.

“There will be no change to operations for the duration of the contract which is expected to end in late 2019. The site in Malta also produces passports for a significant number of countries around the world, and supports our currency and authentication printing, the full remit of De La Rue’s products and services.”

In Malta, De La Rue has already decommissioned two print lines while machine upgrades are taking place in other sites. In 2016, the company decided to retain the remaining banknote print line in Malta, with a plan to deliver £13 million (€15 million) in annual cost savings from 2019 onwards.

De La Rue’s operations include banknote and security printing operations in Malta, where a proportion of the UK blank book passports are made.

In its last annual report, the company said that while overall volumes of cash are growing globally at 4%, “issuances and orders of cash remain lumpy”, leading to unpredictability in production and profitability.

The UK government’s decision to award the contract for its new blue passports to a foreign rival as Britain leaves the European Union triggered a backlash among some politicians and media.

De La Rue has now said it will fulfil its existing contract to print British passports, and that it will assist with transition to the new supplier “and is therefore expecting no impact on the group’s performance in the next 18 months”.

The company has accepted that its offer for the Brexit passport tender was not the cheapest “even if our tender represented a significant discount on the current price”. The De La Rue tender was £50 million (€57million) higher than that of Gemalto.

A spokesman said: “We are confident that we remain the best and most secure option in the national interest.”

De La Rue is based in Basingstoke and dates back more than 200 years. It specialises in banknotes, identity documents and product authentication and has more than 3,000 employees in 24 sites around the world.

De La Rue has been working in Malta for over 40 years and in 2015 announced that it was creating a Centre of Excellence for Identity and Security Print in Malta, as part of a global investment of €33 million in equipment, factory upgrades and skills. It employs over 440 workers in Malta.