New Orga CEO Plans Aggressive Expansion

Germany-based smart card supplier Orga Kartensysteme has again made a change at the top, replacing both its CEO and board chairman


Germany-based smart card supplier Orga Kartensysteme has again made a change at the top, replacing both its CEO and board chairman. Taking the reins as new chief executive is Oliver Jaster, 34, son of Orga's principal owner and scion of a family that runs one of Germany's largest national lottery operations. Jaster was also Orga's former chief financial officer.

Jaster says he intends to aggressively expand Orga, which last year ranked as the fifth-largest smart card vendor worldwide. In fact, he repeated the brash prediction made by his predecessor that Orga would regain the position it held several years ago as the No. 3 vendor of smart cards by 2007, surpassing fellow German card vendor Giesecke & Devrient.

In order to accomplish that, Orga would have to nearly triple last year's revenue of 180 million euros (US$202 million), while G&D remained stagnant. Among other things, Jaster says Orga must get bigger in order to wield more purchasing power in its negotiations with suppliers of smart card chips.

That will require rapid expansion, and Jaster says he sees growth in Asia as key to the strategy. This will include "external growth," either through acquisitions or joint ventures. "I strongly believe by the end of this year we will take some steps in the Asian market from internal growth but also external growth," he says.

Turnover At The Top
Jaster replaces Juan Carlos Garcia, who had been Orga's chief executive for just over a year. Orga also replaced board chairman Winfried Gottwald, himself a former chief executive of the vendor and a man who played a key role in setting strategy. Gottwald is replaced by German banking industry director Jens-Uwe Flach.

The change makes Jaster at least the seventh chief executive for Orga in the past seven years. The vendor nearly went under during the more than two-year industry downturn beginning in 2001 that hit sales of SIM cards-Orga's stock-in trade-especially hard. The vendor lost 50 million euros in 2002.

GW Card Holding of Germany early last year bought the debt-ridden vendor for 1 euro. Just a couple of years earlier, Orga was considered the prized asset within the German federal printing office, the Bundesdrueckerei, which the government privatized to the tune of 1 billion euros. Venture capital firm Apax Partners bought Orga and the rest of the printing office, but the deal was heavily financed by German bank Helaba, which later had to eat hundreds of millions in losses.

GW Card Holding, is principally owned by Jaster's father, Walter Guenther, head of the Guenther Group, which controls about 30% of Germany's lottery business.

Gunther also owns most of GHP Holding, a sister company based in Bamberg that produces direct mail pieces and low-cost cards, such as magnetic-stripe and chip loyalty and phone cards. The company employs more than 2,000 and brought in about 300 million euros last year.

Combining Skillsets
Besides growth in Asia, Jaster says an important part of his strategy is to combine Orga's technological know-how with GHP's expertise in printing, direct marketing and fulfillment, that is, handling the distribution of cards for its customers. Among others, Jaster says he hopes this strategy will appeal to German banks, which have not traditionally placed their smart card orders with Orga.

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