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Parliamentary Portfolio Committee on Agriculture, Forestry &Fisheries 20 October2009 Elaine Alexander Chairperson PERISHABLE PRODUCTS EXPORT CONTROL BOARD 2008/09 ANNUAL REPORT Presentation

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Page 1: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

Parliamentary Portfolio Committee on Agriculture, Forestry &Fisheries

20 October2009

Elaine Alexander

Chairperson

PERISHABLE PRODUCTS EXPORT CONTROL BOARD

2008/09 ANNUAL REPORTPresentation

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PRESENTATION OUTLINE

BackGround

Performance Highlights

People, Employment Equity, Transformation & Empowerment

Financial Results 2008/09

Concluding Remarks

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BACKGROUND

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PPECB’S ROLE I.T.O LEGISLATIVE MANDATE

Act 9 of 1983 – PPECB ACT (supply/cold chain logistics)

establishes and mandates PPECBprovides for control & management of orderly of South African perishable products exports

Act 119 of 1990 – APS ACT (export certification)Appoints PPECB as assignee/public service provider (1991)ensures export food safety and quality standards of regulated agricultural products are complied with.

Act 1 of 1999 – PFMA ACT (corporate governance)regulates financial management and good governance in government and public entitiesreports to government

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Export Legislative Environment…

100 % CONSIGNMENTS ARE INSPECTED

APS Act

119 of

1990

PPECB Act

9 of 1983

Ag. Pest Act 36 of

1983

Temp instruction

letter

ACTS

Quality

MRL

Food safety Traceability

Temperature& Cold

treatment management

Equipment certification

Phytosanitary requirements

Bilateral agreements

Export certificate

Phyto certificate

PPECB

Ministry

EU 1580/2007 APPROVAL STATUTORY ORGANISATION

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CURRENT PPECB ENVIRONMENT

APS – product quality and food safety for regulatedfruit and vegetable products

Inland Phytosanitary Inspections for Non-ColdTreatment Markets (EU)

Cold chain – perishable products

Cold chain - special market protocols (phytosanitary)(Japan; IRAN; USA; etc)

Value added services – services that enhance thecompetitiveness of industry

Capacity building – AETP & PPECB Training Academy

CAADP (Namibia; Tanzania; Kenya; Swaziland;Mozambique)

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INSTITUTIONAL GOVERNANCE MODEL

Board of Directors

CEO

&

Executive Management

Minister of Agriculture Forestry & Fisheries

7

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To build competitive capacity in our people & systems in Industries we serve in order to

instill world-wide confidence in South African Perishable Products

A Partner in Global Competitiveness of South African Perishable Products

Our vision…

Our mission…

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PROFESSIONALISM

ACCOUNTABILITY

PASSION

INTEGRITY

CONFIDENCE

VALUES

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Enhancing the credibility of the South African Export Certificate

Supporting the export competitiveness of the South African perishable products industries

Strengthening PPECB’s capacity as a credible source of strategic information for serving industries and stakeholders

Supporting Government in ensuring confidence in the quality assurance and food safety systems for local perishable product markets

Supporting Government in building systems to ensure compliance to South African quality and food safety standards for imported perishable products

Strategic objectives:

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11

Quality Inspections

Training &

Advice

Cold Chain

Management

Research

&

Developm

ent

Food

Safety

Audits

Industry

Statistics

Inland

Phyto

Inspection

s

Private

Certification

Services

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PPECB Value Chain Analysis

Inspection

InspectionInspection

Inspection

Inspection

Orchard Packhouse Coldstore

Ship Import port Discharge

DepotSupermarketConsumer

Inland Depot

Loading

Export port

Coldstore

Coldstore

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PERFORMANCE HIGHLIGHTS AGAINST

2008/09 STRATEGIC OUTPUTS

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Benchmarked our service delivery model with Chile,Netherlands, UK – Alternative sampling methodology

Cold Chain Management division contributed to our client’scost and risk containment evident from the amount ofpreventive and corrective actions instituted by PPECB

Increased international Phytosanitary (CBS, FCM) and FoodSafety (MRL) interceptions sparked review of our land basedcontrols

Renewed International scrutiny of local export and localmarket controls

Policy commentary on Food Control

Initiatives to keep the South African Perishable Productscompetitive - SAGAP/Globalgap

PERFORMANCE HIGHLIGHTS:

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2524 reefer manifests audited

233 vessels surveyed

87 thousand containers of perishables exported

More than 534 thousand pallets exported under deck

Cold Chain Highlights:

Inspection Highlights:

Over 50 thousand export certificates issued

Just short of 228 million cartons of fruit exported

In excess of 260 million Kg’s of vegetables, maize, flowers, red

tea and other products exported (8% reduction year on year)

Good Agricultural Practice Audits:

203 new audits and 244 surveillance

PERFORMANCE HIGHLIGHTS cont…

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Capacity Building:

18 Emerging Farmers Capacitated to be Export

ready in the Vhembe District;

Group of 8 Global-GaP Auditors trained and

obtained G-Gap qualification in Tanzania

25 New Students taken on-board into the Agriculture Export Technologist Programme & QualifiedMoU signed with JFPM & NAMC to broaden reach on Capacity Building Initiatives going forward.

PERFORMANCE HIGHLIGHTS cont…

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PEOPLE, EMPLOYMENT EQUITY, TRANSFORMATION &

EMPOWEREMENT

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PEOPLE DEVELOPMENT AND TRANSFORMATION

To offer a conducive environment for dynamic and knowledgeable people in order to build a diverse workforce representative

of the South African Society

Vision on People

Mission about People

Investment in people development

Creating an enabling environment

Application of best people processes

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Permanent Staff = 332

Fixed – term Staff = 129

Cost of Employment = R79 MILLION

Training and development = R3,2 MILLION(4.14%)

leadership development

Harmonization programme

Accelerated skills transfer

Uniform interpretation of standards within the inspection and

cold value chain

INTERGRATED TALENT PIPELINE MANAGEMENT

AND CAPACITY BUILDING

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EMPLOYEE PROFILE

April 2008 April 2009

African Male 47

African Female 18

African Male 77

African Female 40

Coloured Male 45

Coloured Female 26

Coloured Male 53

Coloured Female 25

White Male 103

White Female 37

White Male 88

White Female 34

Indian Male 13

Indian Female 1

Indian Male 12

Indian Female 3

Page 25: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

35%

23%5%

37%A

C

I

W

EMPLOYEE PROFILE…..

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1%

10%

9%

11% Asian

African

Coloured

White

FEMALE EMPLOYEE PROFILE…..

Page 27: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

4%

16%

17%

32%Asian

African

Coloured

White

MALE EMPLOYEE PROFILE…..

Page 28: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

FINANCE RESULTS 2008/09

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ECONOMIC INFLUENCES TO F/S

Current Position

Solvent in accumulated reserves

Supported by liquid assets

Strong cash reserves

Renewed technology

World in a recession

Markets under pressure - volumes and

prices

Supermarkets are discounting prices

Exchange rates volatility

Relatively high input costs grower

inflation 20-30%

Reduced credit availability

Worldwide aging in population

Limit expenditure on fruit

Outlook for PPECB

Cautious but expect financial results

will be met

Higher risk in credit accounts

Expenditure under upward pressure

Focus on real efficiency improvement

Page 30: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

OPERATING REALITIES INFL. F/SReality Business requirement Strategic & budget response

Market & economic

conditions

Reduced volumes

High inflation basket, i.e.

accommodation, travelling,

label printing

Project on alternative methodologies

Project on electronic information sharing

Projects on research & development of cold chain practices

Employ technology

Procurement practices

PPECB is a

regulatory operator

Who needs to fulfill

legislative

requirements

Compliance

Resource intensive

Specific skills

High level of judgment

Consistency in application

Legislative review

Project on alternative methodologies

Project on electronic data interchange

Programme: Harmonisation, training & development

Recruitment to fill vacancies

Diverse stakeholder

needs & operating

practices

Decentralised operations

Reduced waste & logistics

cost

High responsiveness

Resource intensive

Activity intensive

Project on alternative methodologies

Project: CCQI on clod chain management

Project on electronic data interchange

Delivery of value added services

Harmonisation, training & development

Value added services

Responsibility of

Public Entity to

respond to SA’s

social needs & APEX

priorities

Transfer skills and

knowledge

Training & development

PPECB Training Academy

AETP

Alliances with partners

External funding

Fulfill PFMA, supply

chain and

governance

requirements

Formalise structures

Maintain effective systems &

controls

Governance reporting

Employ technology to enhance controls

Security of assets, information

Training & development

Internal & external audits

Page 31: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

OPERATING REALITIES cont…Reality Current business impact Strategic & budget response

Cold chain temperature

management risks

CC Research and development

Transfer of knowledge

Information management

Industry capacity building

Project: Alternative methodologies CCQI

Stakeholder workgroups

R&D Programmes

Activity points are

geographically widely spread

Resource intensive

Independent judgment

Harmonisation in application

Activity intensive

Communication

Technology

Project on alternative methodologies

Project on electronic data interchange

Programme: Harmonisation, training &

development

Empower management in decentralised

regions

Engage in teams & establish work groups

Relatively high accommodation & relief

duty costs

Highly seasonal activities

Resource intensive

Activity intensive

Flexible planning & coordination system

Multi-skilling & tasking

Flexible work pool

Project on alternative methodologies

Recruitment

High activity cost

Multi-skilling

Accelerated Skills Transfer

High people turnover

(14.8%)

Align remuneration practices

Transfer knowledge and skills

Institute growth & learning practices

Revisit expense allowance

reimbursements

Adjustment to salaries

Skills gap analysis

Training & development programmes

ISO 17020

Succession planning

Adjustment to subsistence, travelling and

accommodation allowances

Page 32: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

PPECB’s STRUCTURE

Business Operations

• Statutory Services

• Value Added Services

• Development Services

Governance

• Board Governance Costs

• Chief Executive’s Office

• Communications

• Legal & Secretariat

• Risk Management

Corporate Services

• Human Resources

• Information Technology

• Finance

• Internal Audit

• Business Management Systems

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HIGHLIGHTS 2009Income R142.7million, up by 16.3% on budget

Surplus R17.4 million

Debtors collection 42 days against a target of 55 days

Bad debt as % of income 0.2%

Cash reserves R71.5 million

Preferential Procurement 56% in value from BEE scored entities

Fruitless & wasteful expenditure R0

Irregular expenditure R0

Unauthorized expenditure R0

Statistical accuracy Accuracy > 90% within 1 week

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FINANCIAL PERFORMANCE 2009

This Year

R’000

Budget

R’000

Prior Year

R’000

Income R142 724 R122 686 R118 018

Expenses R125 365 R122 686 R104 221

Net result R17 358 R0 R13 797

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FINANCIAL PERFORMANCE 2009

R 0

R 20

R 40

R 60

R 80

R 100

R 120

R 140

R 160

2008-09 budget 2007-08

R 125 R 123R 104

R 17

R 0R 14

Rm

Total income

expenses surplus

0%

5%

10%

15%

20%

25%

budget 2007-08

16%

21%

2%

20%

% c

ha

ng

e

% change

income expenses

Page 36: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

INCOME RECEIVED

APS Inspection Fees62%

PPECB Export Levies20%

Container inspection2%

Other Services3%

Value Added Services8%

Development1%

Interest4%

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MAJOR EXPENDITURE 2009

%This year

R’000

Budget

R’000

Prior year

R’000

Employment cost 72% R89 885 R88 358 R76 103

Activity cost 12% R14 488 R13 390 R11 034

Computer expenses 3% R4 246 R4 836 R3 895

Rental & maintenance 2% R2 698 R2 886 R2 540

Equipment & Consumables 2% R2 531 R1 831 R1 599

Training 2% R2 157 R3 272 R1 003

Telephone & fax 1% R1 776 R2 132 R1 656

Corporate identity 1% R1 153 R1 391 R804

Other expenditure 5% R6 431 R4 590 R5 587

Total expenditure 100% R125 365 R122 686 R104 221

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DIVISIONAL INCOME & EXPENDITURE

R 122,926

R 107,738R 101,663

R 78,443 R 76,151

R 64,038

R 11,102

R 9,311

R 9,295

R 8,347R 7,728

R 8,226

R 8,695

R 5,637

R 7,058

R 9,736R 9,232

R 7,300

R 2,738R 2,627

R 3,327

R 7,522R 7,475

R 6,012

R 18,578R 19,473

R 15,314

R 17,359

R 13,799

R 0

R 20,000

R 40,000

R 60,000

R 80,000

R 100,000

R 120,000

R 140,000

R 160,000

2008-09 Income Budget Income 2007-08 Income 2008-09 Expense Budget Expense 2007-08 Expense

R’0

00

Statutory Operations Value Added Services Other income Operation Management

Development Governance Corporate Services Surplus

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FINANCIAL RESULTS - HISTORY

R 0

R 20,000

R 40,000

R 60,000

R 80,000

R 100,000

R 120,000

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07

R'0

00

Years

Income

NB: Yr 2002 CHANGE IN FIN. Yr END

2003 = 15Months FINANCIAL YEAR

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FINANCIAL POSITION 2009

This year

R’000

Prior year

R’000

Reserves R77 967 R60 609

Non-current assets R16 640 R13 419

Receivables R20 803 R15 784

Investments held and cash R71 551 R54 461

Liabilities R31 027 R23 055

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FINANCIAL POSITION 2009

R 0 R 10,000 R 20,000 R 30,000 R 40,000 R 50,000 R 60,000

2007-08

2006-07

R 54,461

R 38,693

R 23,055

R 18,812

R 15,784

R 13,157

R 13,419

R 6,096

Rm

non-current assets receivables liabilities cash

Page 42: Parliamentary Portfolio Committee on Agriculture, Forestry …pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/2009/... · 2015-01-30 · AETP Alliances with partners External funding

AGING ANALYSIS OF RECEIVABLES

R 0 R 5,000 R 10,000 R 15,000

0 - 30

31 - 60

61 - 90

91 - 120

120+

R 13,705

R 2,439

R 292

R 91

R 660

R 9,479

R 2,831

R 231

R 63

R 1,209

Age analysis R'000

Da

ys

ou

tsta

nd

ing

2008-09 2007-08

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FORECAST 2010

Forecast

R’000

Budget

R’000

∆R’000

Income R151 323 R151 323 -

Expenses R151 323 R151 323 -

Net result R0 R0 -

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CONCLUSION

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Funding Model;

Review of the PPEC, APS Acts vs.Food Control System PolicyFramework;

Local Market & Imports Inspections;&

DAFF Responsiveness.

CHALLENGES:

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Creating World-Wide Confidence in South African Perishable Export

Products

Thank You