Netherlands radio frequency identification
(RFID) product specialist SMARTRAC is riding high on strong demand
for contactless smartcards which, according to industry body
Eurosmart, saw total global shipments reach 543 million units in
In its latest significant deal, SMARTRAC will
supply its PRELAM smartcards to Egyptian payment card manufacturer
Masria-Card which has secured a contract to supply contactless
payment cards for ticketing to Cairo Metro, Africa’s most populous
city’s commuter rail service. MasriaCard will convert the PRELAM
smartcards which incorporate an embedded microchip and antenna into
finished, branded cards for use on the system which on average
carries 2 million passengers daily.
Contactless cards for transport ticketing
applications are only one facet of SMARTRAC’s operations and form
part of what it terms the ‘Standard Segment’ of its business. In
its ‘High Security’ segment, SMARTRAC manufactures RFID inlays for
contactless payment cards and electronic passports.
Founded in 2000, SMARTRAC has grown rapidly via
organic growth and a series of acquisitions and today employs 2,700
people in locations on four continents. The company reached a
milestone in July when its four manufacturing facilities in
Thailand produced over 20 million RFID units in one month for the
first time. The units are used in payment cards, mass transport
cards and identification applications.
In addition to its Thailand facilities,
SMARTRAC has a specialist antennae etching facility in Germany
which it acquired in 2007, a RFID tag manufacturing facility in the
US acquired in 2007 and a RFID inlay manufacturing facility in
The Brazilian facility, which was commissioned
in July 2007, is SMARTRAC’s second largest and is currently
producing 2 million RFID inlays per month for the local market.
Production is currently focused on cards for contactless
applications in public transport and access control with expansion
into fields such as contactless credit cards envisaged.
The company is on track to ramp-up production
further when a facility nearing completion in Malaysia comes on
stream. Production will focus on aluminium-based etched antennas
for transport and other ticketing applications.
Spreading its global reach further, SMARTRAC
announced in July it would enter the Chinese market via the
acquisition of a 30 percent stake in Hong Kong based RFTAG Holding.
RFID inlays for the Chinese market will be produced at an existing
manufacturing facility in Shenzhen, China.
SMARTRAC views as one of its competitive
advantages the maintenance of excess capacity that enables it to
guarantee short turnaround times in what it stresses is an RFID
market in large part project driven.
In a further step aimed at ensuring capacity
availability, SMARTRAC acquired full control of Xytec Solutions, a
Malaysian designer and builder of machinery used in the manufacture
of RFID components in January 2008.
Highlighting growing demand for RFID products,
SMARTRAC increased turnover from €25.5 million ($37.5 million) in
2005 to €96.6 million in 2007. Based on the average forecasts made
by four investment research companies turnover will reach €122
million in 2008 and €199 million in 2010.
According to SMARTRAC, a recently implemented
strategy will result in its ‘Standard Segment’ being the primary
revenue growth driver, with a particular emphasis on expanding its
share of the mass transport ticketing market. A study cited by
SMAR-TEC in a recent presentation forecasts that shipments of
contactless transport and other ticketing application cards will
total 325 million in 2008 and climb to 1.01 billion by 2012, a CAGR
of 33 percent.
Among SMARTRAC’s major investors are investment
company Schroders which has a stake of about 5 percent and Fortis
Investments, a unit of banking group Fortis, which has a stake of
about 9 percent.