Special Report: Brand protection Security Matters (ASX:SMX) says it is executing on a three-stage roadmap for entering the market with its technology to digitise physical objects on the blockchain – which will enable both the circular and closed loop economy.
Security Matters says that by being able to create a digital twin for every physical object, the company enables different players in the value chain of production to create a global ledger of physical goods, resulting in new business and revenue streams.
“SMX is the white label, Paypal of the B2B Businesses, forming a new revenue model and business stream for companies balancing the use of both recycled and virgin raw materials during production,” the company said in a recent shareholder update.
Security Matters’ end-to-end technology solution allows companies to apply a permanent mark to any object – solid, liquid or gas. A combination of over 500,000 marker molecules ensures that each mark is unique.
A patented sensitive reader receives a response signal from the marker, and a patented algorithm returns information on the product retrieved from the blockchain.
This process records datasets through the supply chain, ensuring proof of authenticity and quality assurance. It allows for visibility of supply chain movements and ownership can even be transferred.
The circular economy
A number of companies are already taking advantage of the circular economy.
The Schwarz Group, Germany’s largest retailer, has built up its own waste management group and is busy adding recycling to the mix.
Walmart works with a bulk recycler, Georgia Pacific Harmon, one of the world’s leading makers of tissue, pulp, paper, packaging, building products and related chemicals.
Marks & Spencer has partnered with Dow, a leader in plastics technology, to support the scheme and enable the retailer to give the collected plastic a new purpose.
Security Matters’ solution advantage creates intelligence “on things”. The company describes it as a “drop in solution” that doesn’t require a change of production processes.
For example, the Security Matters technology could make “farm-to-table” possible in a world changed by COVID-19, offering traceability, authenticity and transparency.
The circular economy could also enable “plastic credits” that would offer data granularity and plastic footprint transparency, enabling tax deductions and liability.
These plastic credits would also be tradeable along the supply chain.
The market opportunity
Security Matters sees significant value in this circular economy, believing it could increase GDP by as much as 0.8 per cent by 2030.
“Traceability of products and waste is critical to sustainability. We cannot control what we don’t measure. Most industrials and people are trying to do the right thing, and just need simple traceable tools to encourage the whole supply chain to do the right thing and be rewarded with a “sustainable franchise” or some financial benefit. A few use any loopholes they can and spoil it for the masses” added Paul Jensz, Executive director of Research at broker PAC Partners
The company says its three stage roadmap involves collaborating with industry leaders in each target segment to accelerate speed of adoption, creating multiple revenue streams that grow and compound over time.
Jensz continued “SMX is one of the very few traceability companies that offers tracking technology across all phases (solid, liquid, gas) and along the complete supply chain at any temperature and pressure. The timescale for implementation of the more holistic traceable systems like SMX can very long when left to partnerships between industry and Government. The public needs to put pressure on these partnerships for a roadmap and timeline.”
Security Matters’ primary strategic projects for 2020 include a collaboration with BASF chemicals; a project to tag, trace and verify wine; a creating the world’s first “mine to producer” transparency solution with the Perth Mint; and its inclusion in the Intel Ingenuity Partner Program.
This article was developed in collaboration with Security Matters, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.