Earlier this year, Royal United Mint (RUM), the parent company of the Royal Dutch Mint and the Belgian Mauquoy Token Company, acquired Osborne Coinage Co, which is based in Cincinnati, Ohio and is the oldest private mint in the US. According to RUM, the acquisition will enable it to establish its presence in the US and wider region, making it the world leader in the production of base metal tokens and coins.
Coin & Mint News™ caught up with Vincent Van Hecke, CEO of RUM and the Dutch Mint, to find out more about the acquisition, his plans for the company and where he sees the market for coins, bullion and tokens going in the next 10 years.
Q: Congratulations on the acquisition of Osborne Coinage. How did that come about and why?
A: Osborne was a family-owned company for 75 years, and before that it was part of a conglomerate. The Stegman brothers, the previous owners, reached retirement age and decided that it was the right time to let the company go.
Osborne do everything that Mauquoy is doing, as well as commemorative coins. They’ve been doing it for a very long time, but the business has really grown in the last two to three years, which is good for us because there’s now a more substantial base to expand those activities overseas.
It’s particularly important for tokens and the limited size orders that we do. Even though we have very good and efficient operations in Belgium, shipping 10,000 tokens overseas is very costly or time consuming. So, we could never conquer the US market without a local presence.
Had this opportunity not happened, we would have started up our own production company in the US. This had been on our wish list for over 10 years already. Everyone was surprised, but we were not surprised at all.
The company is based in Cincinnati, Ohio, which is very good location for many reasons. One is that it is more or less on the border with Kentucky, which is the logistics hub for the United States.
Q: You’ve previously mentioned new premises for Osborne, similar to those built for the Dutch Mint. Can you tell us a little about that?
A: We are first going to focus on understanding the operations in-depth, but we will definitely invest in the business. Mauquoy and the Dutch Mint have been following the industry and latest techniques closer than the family-orientated business of Osborne, so we’ll be sharing what we know both ways and improving each other’s business.
We have definitely identified some operational efficiencies to be realised, and that’s our first focus. When we know the business fully, can see the potential for further growth and know exactly what the size and set up for long term future will be, we will be looking to relocate. But that’s not going to happen within the first three years.
Fortunately, in Cincinnati, there is still a lot of development potential and space. The building is currently in an area where there’s both housing and industry. If we relocated, it would be further out of the city centre and residential area, into a modern building like the Dutch Mint with efficient flows that will be large enough that we know how to scale. I think it’s going to be three to five years, and whether that’s three or five years will depend on how quickly it takes us to fully understand the business.
Q: The Cincinnati base gives you that foothold in the US market; does Osborne sell outside of the US?
A: They do sell outside the US markets, to Europe and Asia, Canada and the Caribbean. The majority of the sales come from the Americas region, with over 90% from the US, Canada and the Caribbean region.
Q: Do you have plans to expand elsewhere?
A: It’s a little too soon to comment, but we still see some areas for development. For the next three to five years, Osborne will have our full attention. We will see after that, but of course we still see some potential in the Asia Pacific market. We will also see how South and Latin America can be served from the US, and if everything can be served from Cincinnati that would be better.
I think that if every business is as old and well known as Mauquoy or Osborne, the business comes to you, but one of the areas that we have been doing very well with at Mauquoy is to also proactively grow our business and that’s what we’re going to try to do with Osborne. Hopefully we can be successful in South America also and if there are barriers to doing business there, then we’ll solve them.
Q: How is the numismatic side of the industry going?
A: Very well. There are two industry trends that we see, and the first is the investor market. All uncertainties in the world help the investor market – the pandemic, war in Ukraine, financial uncertainty such as the collapse of Silicon Valley Bank etc. These events drive people towards taking their money out of bank accounts and investing it in precious metals.
The industry is also developing in the sense that in the past many people, when they bought gold or silver, stored it at home. Now there are solutions where you can buy gold or silver from a bullion dealer, and it is stored there in safe deposit.
Precious metals are a very solid alternative for storing money. We are seeing that market continuing to grow, although not quite at the same pace as 2020-2022. A more globalised world means an increasing likelihood of system interruptions, and so people are looking for a safer alternative.
And then there’s the other side, the numismatics business. That business boomed in the COVID pandemic in the sense that many people were at home and had more time for their hobby. It’s still going strong, but we have also seen that business grow in the past five to 10 years with Royal Blanking, where we supply virtually all mints with base metal commemorative blanks.
The numismatics market has also grown by targeting new audiences. For example, the licencing business has become far more important. People might say that numismatics are for older collectors who won’t be customers anymore 10 years on, but I tend to disagree, I think that people with spending power will only increase.
Vistamint, a company that we launched just before COVID, enables you to upload a picture and order 25 coins or even 200 coins with your picture on it, the same as you would order a photograph. We plan to launch it in the Benelux with Dutch marketing, but there is of course a much larger addressable market in the US. If we do the right investments, that’s a project that we will be able to start in the US very easily.
It’s good if you can continue to be innovative, developing new products, techniques, and market distribution channels – that can be anything, having a very good website with a lot of information that tracks your coin collection, or that recommends the right products to you. At some point, I see us using artificial intelligence to recommend which coins to buy to our customers. These are the innovations that we are looking at to keep this business growing.
Q: Are you involved in the storage side of the precious metal investments?
A: We have a separate safe inside our safe at our highly secured site in Houten for storage for bullion dealers in the Netherlands. We are involved in that side of the business, but only in the storage or the back office of their web shop. We do the back office of our own web shop in house, but we can also do that for third parties.
We have all possible security measures for metal products, so for gold and silver storage we are perfectly equipped to help bullion dealers.
Q: Do you have plans for that side of the business with Osborne?
A: For storage, I think it would be better to consider that after we relocate to a new building.
It may be more difficult to enter that area of the business because there are already quite a few depositories, and it’s one large country. One of the benefits in the Netherlands is that there are virtually no CIT companies anymore. There are not many alternatives, and if you want to work with CIT companies, it is more country by country regulated. If you want to do storage with low shipping, because shipping is not so cheap, we already have a head start for anybody who wants to do this business in the Netherlands.
If there is an opportunity for secure storage in the Cincinnati area, I’m sure we’ll take that into consideration and it will be included in the planning of the new site, but it’s too early to decide that yet.
Q: You recently launched a limited-edition coin in collaboration with EpilepsieNL to celebrate its 130th anniversary. How important would you say these charitable partnerships are, to you as an organisation and to coins in general?
A: We wanted to do something meaningful for society from a broader perspective and one of the things that we noticed is that we could, with our customer base, raise money for charities. It also gives more meaning to our employees and what they’re working for. And indeed, the goal for these types of products is not profit at all.
The project depends on the partnership. We have worked with hospitals which cannot accept any money, and so as one example we made a 70cm coin to be displayed in a hospital to thank the healthcare workers for what they did during the COVID pandemic.
Another example is the making of a special coin, not in base metal but in precious metal, to give to the contributors of the first children’s cancer hospital in Netherlands, the Princess Máxima Centre.
This is a culture that we don’t really have in Belgium or Netherlands, but in the US it’s very normal. Osborne makes a lot of coins for charities, and the quantities are unimaginable for us. That’s something that exists far more in the US than in mainland Europe.
Q: Is the Dutch Mint engaged with these general industry collaborations to advocate for cash and to promote cash?
A: We are not currently a member of the new associations, but we are definitely considering it, once we see some success, to join the most effective organisation.
Q: Besides the new Dutch Vault, do you have any plans in terms of the broader sustainability agenda?
A: We recently carried out an analysis of electricity consumption and we saw that we were consuming far more at night than we thought. One of the measures that we took was to switch off our air pressure compressors at night. In theory they shouldn’t consume much energy when there’s no leakage, but you may have some fittings that will be worn out in one machine out of the hundreds of machines that you’re operating.
We’re still looking at the small things, but part of my presentation at the last Coin Conference, in Amsterdam last October, was that you first must get your own shop in order. And I think that we have done that. We can look at further things to do from our own footprint, but anything that we do will not be very meaningful anymore because we are already looking at all the major aspects of our environmental footprint. We look at everything and as such, a mint is not super polluting.
The next step is by setting the supply chain, and we’re currently talking to a central bank about how they can improve their environmental footprint by changing their procedure. One of the things that we’re now going to do is look at the footprint of the steel and any price difference, or if the central bank can justify it compared to something else.
Another example is if we are asked to use a very specific way to package coins in very specific boxes or crates, we try to get those crates from the suppliers so that they will be reused when we ship products out. Sometimes they go along, sometimes they don’t, but those are the areas that we are now looking at.
Q: Looking into the future, where do you hope to be in 10 years’ time?
A: My view on the market is that as a private company, we’re often able to give better service in the long run that will pay off in getting more business. The addressable market will increase, and we see the market gradually opening for us, and the business growing in that sense.
We will always focus on remaining very efficient. The step up in the company in the US will give us more scale so that, when we develop something good, we can monetise it in a larger market.
For example, almost everything in the coin industry is developed in Germany. Testing things is far more difficult from Cincinnati, so we’re looking at a few investments that we can use in all our sites. I mentioned artificial intelligence for a new web shop, and that is actually something that we’ll be working on. If it pays off, that’s something to consider in the United States.
I see us as a front runner doing the newest things, being more flexible. Osborne is successful because it is one of the most flexible companies in the United States for serving customers on commercial projects quickly, efficiently, and competitively. It fits really well within our current offering of the Dutch Mint and Mauquoy and trying new things.
I also see us becoming more of a global player, and of course with different sites you have opportunities to optimise. I’m very positive about the investor market in the long run. For the reasons I mentioned before, I’m also positive about collector markets if you stay innovative.
Worldwide, circulation coins will not decline significantly. The population is going to continue growing and coins will still be important in those countries where there is still a lot of cash usage.
Taking everything combined, I think we deserve a spot in the industry. And I think that spot will be a bit larger in 10 years.
