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PRESENTATION TO THE PORTFOLIO COMMITTEE OF HOME AFFAIRS

1. STRATEGIC PLAN 2015 – 2020

2. ANNUAL PERFORMANCE PLAN AND BUDGET FOR 2015/16

24 March 2015

GOVERNMENT PRINTING WORKS

THE STRATEGIC PLAN OF GPW AND

THE NATIONAL DEVELOPMENT PLANThe Government Printing Works strives to make a significant contribution to the :

1. National Outcomes of Government

2. Goals of the National Development Plan

Specifically our work contributes to the National Outcomes of :

Create a better South Africa and contribute to a better and safer Africa and world

An efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship

A skilled and capable workforce to support an inclusive growth path

Specifically our work supports Chapter 13 of the National Development Plan :

on building a Capable State - “ A State capable of playing a transformative and developmental role in realizing the vision for 2030”

LEGISLATIVE MANDATE

The Ministers of Finance, Home Affairs and Public Service and Administration approved the business case for the new GPW in 2009

At the time GPW was still a sub department of the Department of Home Affairs

On 9 October 2009 the GPW was converted to a Government Component in terms of the Public Services Act of 1999 as amended (Government Gazette 32616)

The GPW derives its legislative mandate from the Public Service Act of 1994, as amended in 2007.

A Government Component is defined as “a national or provincial government component” as set out in section 7(1) and 7(2)(c) [column 1 of Part A of Schedule 3] of the Public Service Act Nr 103 of 1994 (as substituted by the Proc 59 Government Gazette 32566, 11 September 2009).

As a Government Component the GPW delivers security printing services to government.

The CEO of GPW reports to the Minister of Home Affairs

The Minister has written delegations that prescribe the powers of the CEO as the Accounting Officer for GPW

STRATEGIC OUTLOOK OF THE GPW Vision

• To be the State’s Mandated Security Printer

Mission

• To provide cost effective, reliable and timeous services in security printing to allspheres of Government

• To provide the public with valuable information

• To disseminate Government information through technology, innovation andservice excellence

Values

• Reliability

• Integrity

• Accuracy

• Stakeholder satisfaction

These belief systems motivate our people to provide excellent service to all our stakeholders

3

STRATEGIC OUTLOOK OF THE GPW

The development of the Strategic Plan 2015 – 2020 was guided by the policy priorities of

government and the Department of Home Affairs and

is reflected in the three strategic outcome-oriented goals included in the Strategic Plan :

Strategic outcome

oriented goal 1

State Owned Company

Goal statement Further develop the Government Component (GC) organisation to become a State

Owned Company

Strategic outcome

oriented goal 2

Optimise processes and facilities

Goal statement Optimise processes and facilities to increase operational effectiveness and improve

customer service

Strategic outcome

oriented goal 3

Developed workforce

Goal statement Have an efficient, effective and well-trained/developed workforce

STRATEGIC OUTLOOK OF THE GPW

Since 2009 the GPW has operated on regular business principles, having to defray all its expenditure from the revenue generated by services rendered

The principal clientele of the GPW are State Departments and other Organs of State

The GPW has the sole mandate to produce South African passports and identification documents is therefore an important strategic partner of the Department of Home Affairs

Procuring security printing business in the rest of Africa remains difficult; but GPW continues to print the African Union passport

6

STRUCTURE

Minister

GM: FinanceGM: Operations and Production

GM: Human Resources

GM: Strategic Management

CEO

ORGANISATIONAL STRUCTURE

The GPW business model provides for the following four branches :

Branch: Operations and Production

Branch: Strategic Management

Branch: Financial Services

Branch: Human Resources

ANNUAL PERFORMANCE PLANNING PRIORITIES FOR 2015/16

Smart ID card : increase production rate from 200 000 pm to 300 000 pm

Interactive E-Gazette : go live in March 2015

Implementation of ERP system

Development of R 1 billion facility at Visagie Street

Construction of examination printing division and Dispatch Centre

Conversion to State Owned Company12

STRATEGIC OUTCOME ORIENTED GOALS 2015 - 2020

Strategic outcome

oriented goal 1

State Owned Enterprise

Goal statement Further develop the Government Component

organisation to become a State Owned Enterprise

5

STRATEGIC OBJECTIVE 1 : STATE OWNED ENTERPRISE

Transformation from a Government Component to a State Owned Company

On 9 October 2009 the GPW was converted to a Government Component in terms of the Public Services Act of 1999 as amended

This was always intended as a transitional phase on the way to becoming a State Owned Company

The role of the Government Printing Works is summarised in its vision : “To be the State’s Mandated Security Printer”

This has effectively been achieved over the past 5 years, but this has still to be ratified in legislation

STRATEGIC OBJECTIVE 1 : STATE OWNED ENTERPRISE

A draft “State Printers’ Bill” has been produced

The Minister of Home Affairs has included this Bill as one of the three Bills he has tabled with the Deputy President for the legislative process

The intent is for GPW to transform from a Government Component to a State Owned Company

Government will be the sole shareholder of the company

All profits will be ploughed back into asset recapitalisation and development of the facilities

This would provide GPW greater flexibility in setting salaries to attract the skilled artisans and professional start needed to complete the transformation of GPW into a modern “print and media” company

This development is part of the formation of a “capable and developmental State” as the NDP puts it


Strategic outcome

oriented goal 2

Optimise processes and facilities

Goal statement Optimise processes and facilities to increase operational

effectiveness and improved customer service

6

STRATEGIC OBJECTIVE 2 : OPTIMISE PROCESSES AND FACILITIES

A. 81 Visagie Street Campus

- concept design and viability report complete

- detailed plans to be completed in 2015

- total project cost R 788 160 678

- 54 073 square metres

- to be funded from accumulated funds in the Pay Master General

Account, and from profits to be accrued from 2015 – 2019

- tender for contractor to be issued in 2016

SATELLITE VIEW OF MINAAR STREET

3D CONCEPT PERSPECTIVE: South façade of Minnaar Street Campus

VISAGIE STREET CAMPUS 2019


B. Dispatch Centre

- the Department of Public Works Central Drawing Archive is being relocated from

a building on the Visagie Street Campus

- this building is being converted into a Dispatch Centre for passports and smart

ID cards

- due for completion by mid 2016. In the meanwhile 2 automatic dispatch

machines will prepare smart ID cards for direct handover to the courier from the

smart ID card factory floor

- implementation of the dispatch system will mean that there will no human

intervention in the production of smart ID cards from the time of live capture of

the citizens details to the point of handover to the courier in the Dispatch Centre

DPW ARCHIVES : FUTURE DISPATCH CENTRE


C. High Speed Printing and Examination Papers Factory

- Pavilion Three on the Visagie Street Campus is being converted into a

High Speed Printing and Examination Papers Factory

- the total cost of this Factory and the Dispatch Centre is R 257 million

- the entire facility should be complete by mid 2016

HIGH SPEED PRINTING AND EXAMINATION PAPERS FACTORY AND DISPATCH CENTRE


D. Administration Building

- the modern building on the other side of Visagie Street from the GPW will

be converted into an Administration Building

- cost R 49 million purchase price plus R 10 – 15 million renovations cost

- completion by end 2015

ADMINISTRATION BUILDING


E. E-Gazette

The Electronic Government Gazette was launched in 2012

It can be accessed at the website : www.gpwonline.co.za

Uptake of the system by customers of GPW has been very impressive

The online component went live in March 2015 : whereby customers will be able

to submit material for the Government Gazette electronically using PDF files

The system will soon save thousands of tonnes of paper every year

F. ERP System

The enterprise resourse planning system (ERP) was launched in 2012

It is working well, integrating the financial and manufacturing systems of GPW

on an IT backbone

http://www.gpwonline.co.za/


Strategic outcome

oriented goal 3

Developed workforce

Goal statement Have an efficient, effective and well-trained/developed

workforce

7

STRATEGIC OBJECTIVE 3 : DEVELOPED WORKFORCE

A. Special Salary Dispensation

The Portfolio Committee in 2011 recommended a special salary dispensation for GPW in order to assist the company in recruiting and retaining skilled artisans and professional staff

The Minister supported this recommendation

In December 2014 the Minister of Public Service and Administration rejected the application by GPW for a special salary dispensation

If GPW becomes a State owned company, its employees will no longer fall under the Public Service Act, and it will have greater freedom in setting salaries commensurate with market rates in the printing industry

STRATEGIC OBJECTIVE 3 : DEVELOPED WORKFORCE

B. Training and Skills Development

GPW is increasingly using IT in :

- its business processes (such as the ERP system)

- in the new machines it is procuring (such as the smart ID card machines)

- the products and services it provides such as the smart ID card and the

E-Gazette

There is therefore a need to continually train and upgrade the skills of the workforce for this modern “print and media company”

There is no alternative to this course of action as the machines have to be replaced as there are no longer spare parts for them; and modern machines that replace them are inevitably high tech.

PRODUCTION STATISTICS

The GPW is a factory. Production statistics for the past few years are shown below :

Product 2013/14 2012/2013 2011/2012 2010/2011

Passports (booklets) 656 600 627 152 707 384 859 884

Identity documents

(booklets)

1 884 326 1 995 421 2 395 393 2 233 493

Examinations (books) 21 902 988 16 518 188 26 538 274 21 726 216

Government Gazettes

(editions)

2 573 2 384 2 180 2 390

Government Gazettes

(total number of A4

pages per annum)

109 250 97 110 107 044 105 915

SMART ID CARD

Smart ID card production began on 15 October 2013

Thus far 2 million smart ID cards have been produced

Another 36 million smart ID cards will be produced over the next 6 years to replace the

current ID books (plus 5 million smart ID cards for those turning 16 each year during those 6

years till 2021)

Gradually, printing of green ID books is being replaced by smart ID card production

Although GPW can report on increased outputs, service delivery is still negatively affected by

human and material resource constraints.

The lack of experienced and qualified senior managers, artisans and administrative personnel

impacts on service delivery, resulting in the GPW being compelled to outsource certain

functions.

INCOME & EXPENDITURE ESTIMATES (in thousands of rands)

Actual 2012 Actual 2013 Actual 2014Forecast

2015

Budget

2016

Budget

2017

Budget

2018

TOTAL SALES692,920 929,154 780 659 977 291 1 116 780 1 337 993 1 450 206

COST OF SALES455,548 727,431 500 146 687 819 806 863 992 954 1 093 958

GROSS PROFIT237,372 201,723 280 513 289 472 309 917 345 039 356 248

GP %34.26% 21.71% 35.93% 29.62% 27.75% 25.79% 24.57%

OTHER INCOME68,768 69,615 66 014 81 153 105 127 121 595 142 237

TOTAL EXPENSES 114,358 161,977 196 840 225 536 252 872 283 741 305 475

Employee Benefits57,326 60,119 68 665 77 125 88 158 106 793 122 780

Administrative Expenditure21,416 32,536 29 354 35 778 48 366 52 076 51 031

Production and Stores577 874 1 335 1 183 1 234 1 297 1 362

Equipment980 1,000 629 761 793 793 875

Professional Services34,036 51,483 67 451 79 703 78 490 77 873 77 127

Depreciation and Provisions- 1,998 13,795 25 892 29 954 31 626 40 488 47 657

Sundry Expenditure2,021 2,171 3 514 4 032 4 205 4 421 4 643

NET SURPLUS/(LOSS)191,783 109,361 149 687 145 089 162 172 182 893 193 010

To achieve the strategic outcome oriented goals the necessary resources need to be

available. GPW has provided for this as follows as part of the budget:

RELATING EXPENDITURE TRENDS TO STRATEGIC OUTCOME-ORIENTED GOALS

Specific budget

R’000

2015/16

R’000

2016/17

R’000

2017/18

Strategic outcome oriented goal 1: Further develop the Government Component

Remuneration (Roll-Out of new Structure) 208 517 246 716 282 508

Capital expenditure – IT Equipment & Furniture 34 000 21 000 28 000

Staff development 19 571 20 924 15 013

Strategic outcome oriented goal 2: Optimise processes and facilities

Capital expenditure – Facilities 250 000 290 000 170 000

Capital expenditure – Machinery Replacement Programme 42 000 30 000 99 476

Strategic outcome oriented goal 3: Developed workforce

Staff development 19 571 20 924 15 013

ORGANISED CRIME AND SECURITY PRODUCTS

Since the introduction of the new South African passports in 2009 with enhanced security

features, over 4 million passports have been printed with not a single successful forgery

Other security documents have been replaced with new, secure products such as the

unabridged birth certificates, asylum seeker documents, refugee passports, road tax discs,

matric certificates, etc. gradually reducing the scope for organised crime syndicates to profit

from forgeries

the new smart ID card in particular cannot be forged, and theft of the card is pointless as

the photograph cannot be replaced on the physical card or in the digital version on the chip

the impact to the economy of these new security products probably runs to hundreds of

millions of rands; in addition to the human suffering averted entailed in identity theft, human

trafficking etc.

CONCLUSION

The GPW has completed its journey, begun in 2009, from a sub department of Home Affairs to a Government Component

It has doubled its budget since 2009, and now operates on business principles, defraying all its operations from revenue generated

It is now ready to complete the transformation to a State Owned Company over the next few years

The launch of the Smart ID Card, GPW’s flagship project, has been a great success with 2 million cards printed over the past 18 months

GPW is on track to printing 42 million more smart ID cards over the next 6 years to replace all the green ID books in circulation and issue smart ID cards to those turning 16 during those 6 years to 2021

The R 400 million asset recapitalisation project is on track for completion by 2018

The R 1 billion Renovation of the Visagie Street Campus should be complete by the end of 2019, after which the entire organisation will relocate there

CONCLUSION

Recruitment and retention of skilled artisans and professional staff remains difficult due to GPW salaries being more than 30% below market rates

Conversion to a State Owned Company will enable GPW to pay market-related salaries

Procuring security printing business in the rest of Africa remains difficult; but GPW continues to print the African Union passport

APPENDIX :

DETAILED STRATEGIC OBJECTIVES

STRATEGIC OBJECTIVES

GPW has 15 Strategic Objectives in its

4 Branches

Branch : Operations & Production

9

Strategic

objective 1.1

Production equipment

Objective

statement

Acquire modern production equipment to satisfy all

State security printing requirements

Baseline Production equipment acquired per set targets

Justification The indicator will reflect the progress on acquisition of

modern security

printing capacity.

Links GPW Strategic Outcome Oriented Goal 2 - Optimise

processes and facilities to increase operational

effectiveness and improved customer service.


Strategic

objective 1.2

Production of security printed materials

Objective statement Produce security printed materials according to customer

requirements and local/ international standards

Baseline Security Product Groups produced within the levels of

quality

Justification The objective is important due to its contribution and

influence on National Security of the State via the design,

development and production of secure documents. Areas of

impact include: identity fraud, economic and academic

fraud, and immigration related issues.

Links Linked to GPW’s vision of being the states’ mandated

security printer contributing to national safety and security of

the state


Strategic

objective 1.3

Coordination and distribution of government

information

Objective statement Coordination and distribution of government information in

accordance with quality and delivery specifications

Baseline Government Gazettes Published according to Quality &

Delivery specifications

Justification Through coordination and distribution of government

information in accordance with quality and delivery

specifications the GPW complies with its mandate and

improved customer service.

Links Contribute towards fulfillment of mandate and demonstrate

customer

service delivery

Branch Strategic Management

Strategic

objective 1.4

Availability of ICT services

Objective statement Provide high availability of ICT services

Baseline Current GPW business systems

Justification Measure the level of availability of ICT systems provided

to business to enable production and operations business-

wide

Links GPW Strategic Outcome Oriented Goal 2 - Optimise




Strategic

objective 1.5

Secure and protect ICT environment

Objective

statement

Provide secure ICT environment

Baseline Current GPW business systems

Justification Measure the level of information security provided to

business in the utilisation of ICT products and services

Links Linked to GPW’s mission of dissemination of government

information; through technology, innovation and service

excellence and the strategic outcome oriented goal of

optimising processes and facilities to increase

operational effectiveness and improved customer service


Strategic

objective 1.6

Optimize ICT Service offerings

Objective

statement

Introduce new and or redesign ICT service offerings to

enhance GPW business operations.

Baseline New ERP System developed and implemented

Justification GPW Strategic Outcome Oriented Goal 2 - Optimise



Links Linked to GPW’s strategic outcome oriented goal of

optimising processes and facilities to increase operational

effectiveness and improved customer service


Strategic

objective 1.7

Implement the Marketing strategy

Objective

statement

Aggressive marketing strategy implemented to retain

and grow the market

Baseline Marketing strategy developed

Justification To ensure sustainability and continuous growth of

business

Links To contribute towards the strategic outcome oriented

goal of developing the Government Component (GC)

organisation to perform as a sustainable ring-fenced

business entity with flexibility and within regulated

parameters


Strategic

objective 1.8

Product mix diversification

Objective statement Diversification of product mix within security printing

Baseline New certificate for SARS, Smart ID card, KZN Liquor

license, Matric Statement of Results

Justification To ensure sustainability and continuous growth of

business

Links To contribute towards the strategic outcome oriented

goal of developing the Government Component (GC)

organization into a State Owned Company that

operates as a sustainable ring-fenced business entity

with flexibility and within regulated parameters


Strategic

objective 1.9

Development and implementation of a security

risk management system

Objective statement Development and implementation of a security risk

management system to secure and protect GPW assets

and resources

Baseline Security risk management plan developed but not

approved

Justification To ensure the vision of being the State’s mandated

security printer; a security risk management system must

be implemented.

Links Compliance with Minimum Information Security Standards

(MISS); Minimum Physical Security Standards (MPSS)

and other legislation


Strategic objective

1.10

To provide independent and objective assurance and

consulting services

Objective

statement

To assist management to improve organisational

operations by providing assurance and consulting

services on the adequacy and effectiveness of internal

controls, governance and risk management processes

Baseline Approved and implemented internal audit plan

Justification Assist management to achieve their strategic objectives

by evaluating the adequacy and effectiveness of internal

controls and making practical recommendation for

improvement

Links Institute of Internal Auditors standards

PFMA

Treasury Regulations


Strategic

objective 1.11

Provide effective and efficient financial and

supply chain management to stakeholders

Objective

statement

Provide quality financial and supply chain management

services in compliance with legislation and stakeholders

needs to contribute towards financial sustainability.

Baseline Unqualified audit opinion

Justification Necessary to ensure financial resources are managed in

accordance with legislation and sound financial

management practices to contribute towards financial

sustainability

Links PFMA and Treasury Regulations requirements

Branch Financial Services

Strategic

objective 1.12

Functional and secure facilities

Objective

statement

Facilitate the upgrade and occupation of secure facilities

Baseline Assessment of facility and design and lay-out completed

Justification Measure success towards establishing a secure and

functional facilities

Links Linked to national security of the State and limiting identity

and economic fraud, contributing to ensure secure

documents and immigration issues

Branch Financial Services

Strategic

objective 1.13

Human Resource Staffing Plan

Objective

statement

Complete and implement a human resource staffing

plan that will provide adequately trained employees to

support the organisation towards growth and

sustainability

Baseline Approved organisational structure and human resource

policies.

Justification To indicate the staffing needs of the organisation and

recruit and retain critical and other staff in line with

various business requirements/models

Links Public Service Act and other applicable legislation

Branch Human Resources

Strategic

objective 1.14

Learning and Development Plan

Objective statement Implement a Learning and Development Plan to support

the talent development of GPW employees through

professional development, career development, and

improved performance management

Baseline Human Resource Development Plan updated and

approved

Justification Contribute towards the third strategic outcome orientated

goal to have an efficient, effective and well-

trained/developed workforce responding to the identified

training needs, monitoring the average number of days per

employee spent on training and development, and

supporting personal development plans

Links Public Service Act and other applicable legislation


Strategic

objective 1.15

Labour Relations Management

Objective

statement

Promote sound labour relations between the employer

and employee

Baseline Employee relations management policies, processes and

guidelines implemented

Justification To ensure sound labour relations.

Links Different legislation


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