The South African Mint, from an unassuming but closely guarded factory in Centurion, produces not only all South Africa’s coinage but also coins for export to countries in South America, East and South Asia and all over the African continent.
Stuart Cuthbert, export marketing manager of the South African Mint Company, said the mint’s main priority is “to produce local coinage first and foremost”.
However, he said the mint is unique because it has excess capacity, allowing it to manufacture coins for export.
The South African Mint Company was established as a full subsidiary of the Reserve Bank in 1988. Cuthbert said the global arena it entered in 1995 was characterised by fierce competition — “a vicious, dog-eat-dog arena”.
The South African Mint competes against the likes of the Royal Canadian Mint, Britain’s Royal Mint and the Mint of Finland’s Saxonia, which is based in Germany. According to Cuthbert, these companies have forged long-standing relationships with countries all over the world.
“Fortunately or unfortunately, the British Royal Mint has been in the African continent for more than 45 years, so you can imagine the relationships that have been formed over the years — from Cairo all the way down,” said Cuthbert.
Although the competition is fierce, he said, the South African Mint’s international recognition and reputation boost its profits.
This year, according to the Reserve Bank’s annual report, the mint’s contribution to the bank’s profit was about R37-million.
According to Cuthbert, the number of coins that are exported each year depends largely on the importing country, its population and the tender received.
“Most of the tenders operate on two-year contracts,” said Cuthbert.
He said some countries do not have their own mints, but they do have central banks. If the South African Mint wins a tender on the international market, it produces the coins for that country.
Blank-making capacity
Like Saxonia, the South African Mint has the capacity to produce coin blanks. Some countries have a mint but do not necessarily have the blank-making capacity, in which case they issue a tender for coin blanks.
The South African Mint has another competitive advantage in the international coin market: it produces, in an extremely complex and hi-tech process, the designs — or dies — for coins.
“You might not always win a tender, but there is always another way that you can compete in the international market.”
Cuthbert said it’s hard to form relationships with some of the South African Mint’s target markets because of political instability and the risk factor involved in supplying coins to those countries.
“You have to understand the risk of getting the consignment there and getting payment.
“And it’s a shame, because some of these countries that are slightly politically unstable have some very interesting coinage and their central banks are very enthusiastic to have us manufacture and supply for them.”
The South African Mint’s marketing strategy is focused on the world at large, but it particularly wants to make inroads into countries in the South African Development Community.
“We feel that, as the South African Mint, we should be manufacturing for all the SADC countries.”
One thing needs to be distinguished, said Cuthbert: the difference between sales and marketing. Instead of merely selling the product, the South African Mint wants to establish long-standing relationships with the SADC countries. A mint will not be chosen as a country’s preferred manufacturer based on price, but rather on the services provided, which is how a mint gains most of its competitive advantage.
The company is strongly controlled and monitored by two auditors from the Reserve Bank, preserving its credibility and reputation.
“Corruption is rife in the industry and our company does not subscribe to it at all. We are straight upfront, we deliver,” said Cuthbert.
It is estimated that the South African Mint has created about 600 jobs over a range of skills.
“Most people have been working at the company for many years and have climbed the company ladder successfully,” said Cuthbert.
Describing the fight for tenders, Cuthbert said the tables at tender meetings are long and that each chair is filled with a competitor.
“There is no love lost in these tender meetings,” he said.
As unfriendly as the industry may seem, it is an avenue in which South Africa can promote its international prestige and recognition, he said.