De La Rue is talking to other papermakers about a potential joint venture for its banknote paper business.

The security printing giant has already turned to partnerships with other specialists to flex its print capacity, and outsourced the production of more than 500m banknotes in its last year. 

Chief executive Martin Sutherland said: “We think there’s more we can do with our paper business to fundamentally improve the prospects of this business going forward. 

“We are in talks with a number of other papermakers about what a potential joint venture might look like to drive improved ` efficiency in our paper business.”

Sutherland described the talks as “complex but also constructive.”

De La Rue made 10,000 tonnes of paper at its Overton mill in Hampshire last year, up 6% on the prior year although the group said the market continued to be oversupplied and described demand as “lumpy”.

The firm has been making cotton banknote paper for more than 300 years.

Sutherland was speaking as the firm unveiled its year-end results last week. Sales in the year to 26 March rose 3% to £488.2m and underlying operating profits (prior to an exceptional charge of £3.6m) fell 10% to £62.5m.  

De La Rue announced the sale of its loss-making Cash Processing Solutions business the day before the results, and also provided   figures for its continuing operations excluding that business.  De La Rue is also pushing its offering as an integrated polymer producer and security printer.