parliamentary portfolio committee on agriculture, forestry...
TRANSCRIPT
Parliamentary Portfolio Committee on Agriculture, Forestry &Fisheries
20 October2009
Elaine Alexander
Chairperson
PERISHABLE PRODUCTS EXPORT CONTROL BOARD
2008/09 ANNUAL REPORTPresentation
PRESENTATION OUTLINE
BackGround
Performance Highlights
People, Employment Equity, Transformation & Empowerment
Financial Results 2008/09
Concluding Remarks
BACKGROUND
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
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
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)
INSTITUTIONAL GOVERNANCE MODEL
Board of Directors
CEO
&
Executive Management
Minister of Agriculture Forestry & Fisheries
7
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…
PROFESSIONALISM
ACCOUNTABILITY
PASSION
INTEGRITY
CONFIDENCE
VALUES
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:
11
Quality Inspections
Training &
Advice
Cold Chain
Management
Research
&
Developm
ent
Food
Safety
Audits
Industry
Statistics
Inland
Phyto
Inspection
s
Private
Certification
Services
PPECB Value Chain Analysis
Inspection
InspectionInspection
Inspection
Inspection
Orchard Packhouse Coldstore
Ship Import port Discharge
DepotSupermarketConsumer
Inland Depot
Loading
Export port
Coldstore
Coldstore
PERFORMANCE HIGHLIGHTS AGAINST
2008/09 STRATEGIC OUTPUTS
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:
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…
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…
PEOPLE, EMPLOYMENT EQUITY, TRANSFORMATION &
EMPOWEREMENT
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
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
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
35%
23%5%
37%A
C
I
W
EMPLOYEE PROFILE…..
1%
10%
9%
11% Asian
African
Coloured
White
FEMALE EMPLOYEE PROFILE…..
4%
16%
17%
32%Asian
African
Coloured
White
MALE EMPLOYEE PROFILE…..
FINANCE RESULTS 2008/09
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
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
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
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
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
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
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
INCOME RECEIVED
APS Inspection Fees62%
PPECB Export Levies20%
Container inspection2%
Other Services3%
Value Added Services8%
Development1%
Interest4%
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
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
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
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
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
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
FORECAST 2010
Forecast
R’000
Budget
R’000
∆R’000
Income R151 323 R151 323 -
Expenses R151 323 R151 323 -
Net result R0 R0 -
CONCLUSION
Funding Model;
Review of the PPEC, APS Acts vs.Food Control System PolicyFramework;
Local Market & Imports Inspections;&
DAFF Responsiveness.
CHALLENGES:
Creating World-Wide Confidence in South African Perishable Export
Products
Thank You