By: Robert Grace
October 18, 2013
Brand owners know all too well the high cost — in both money and reputation — that the proliferation of counterfeit goods wreaks on businesses worldwide. The numbers are staggering: The Paris-based International Chamber of Commerce estimates that counterfeit and pirated goods drain $1 trillion from the global economy and rob more than 2.5 million people of legitimate jobs worldwide. It's a constant battle to defeat counterfeiters and to identify and intercept fake products before they cause damage.
PolyOne Corp., the $2.9 billion polymer compounding and materials distribution giant, wants to join the fight. Based near Cleveland, Ohio, the firm (Hall 8A/J13) is choosing the K show to showcase its new Percept-brand authentication technologies. Its offering is less a product than a service, designed to help companies to protect revenues and lower the risks involved with being associated with poorly made or unsafe products.
Fernando Sanchez, the Fisch¬bach, Luxembourg-based global marketing director for PolyOne Color, Additives & Inks, helped to drive the development of this new service. PolyOne is focusing its Percept efforts first in North America and Western Europe, Sanchez said in an Oct. 7 telephone interview — "and then we'd like to go, together with the brand owners, to Asia."
Broadly speaking, three types of approaches are used to attempt to determine if a product is genuine or fake:
* Overt authentication — via an element detected by one or more of the human senses;
* Covert authentication — via an element that is hidden from human sense and made visible by use of a tool, such as a handheld scanner; or
* Forensic analysis — scientific methodology for authenticating material goods by confirming an authentication element or intrinsic attribute though the use of specialized equipment (such as an electron microscope) by a skilled expert. This sometimes involves the destruction of the product to assess it at a molecular level.
PolyOne explained that all Percept solutions are delivered to the polymer via a masterbatch solution, which can include pigment, additives (performance or otherwise), as well as some form of taggant or tracer technology.
Sanchez, however, wants PolyOne to be able to offer brand owners a broader solution — not just pounds of compounded resin that contain traceable components. He expects PolyOne to work closely with companies, on a case-by-case basis, to determine the potential risks, including loss of revenue, brand damage and product liability exposure, and then propose a suitable, customized approach. PolyOne is partnering with other vendors and service providers so that they also can provide, for example, the necessary scanners or identifying tools necessary to analyze a product that uses covert authentication technology. Sanchez declined to identify any of the firm's partners.
Sanchez declined to elaborate on how PolyOne will price this service, saying only: "Percept pricing will be based on the value it provides to customers."
He did say that there is no limitation on the type of polymer carriers that can incorporate taggants, but he also noted that not all taggants are applicable for all end-use products.
He cited the pharmaceutical/ healthcare market as one keenly interested in such authentication technologies, since altered or fake drugs obviously can have devastating consequences. Drug makers want to protect the active ingredients in their medicines. Sanchez said PolyOne can help them, not by providing the means to verify the actual drug ingredients, but rather by helping them to increase the level of protection in their packaging.
Electrical/electronics and other types of packaging (food and beverage, personal care, cosmetics, etc.) also are key target sectors, he noted.
The U.S. Customs and Border Protection last year said it seized 25,000 shipments of counterfeit goods — valued at about $179 million — that were making their way into the country. According to the CBP, the top 10 types of counterfeit goods, in order based on commercial value, were electronics, shoes, drugs, CDs and DVDs, clothing, perfume, watches, cigarettes, computer hardware, and toys and games.
Alan Zimmerman, a professor and director of the international business program at the College of Staten Island, part of the City University of New York, closely tracks the impact of counterfeit goods on the economy and on companies. He said it's almost impossible for customs agents to hold back the tsunami of fake products. Zimmerman calculates that counterfeit goods seized by customs agencies worldwide account for approximately one-tenth of 1 percent of imports (based on the current system, used both in the United States and European Union, that values the goods based on manufacturers' suggested retail prices).
The stakes are huge, and many are impacted by counterfeiting. Other compounders and plastics firms offer masterbatch products that contain taggants designed to help foil counterfeiting. PolyOne acknowledges its materials technology is not unique. But it's counting on differentiating itself by working with clients to identify specific needs, and then offering a turnkey approach to help such firms protect their brands.