perishable products export control board 2009-10...

Parliamentary Portfolio Committee on Agriculture, Forestry & Fisheries

14 October 2010

Mr. L. Vorster

Chairperson

PERISHABLE PRODUCTS EXPORT CONTROL BOARD

2009-10 ANNUAL REPORTPresentation

PRESENTATION OUTLINE

Business Overview

Legislative Mandate

Performance Highlights

Sustainability Report

People and Transformation

Financial Results

Concluding remarks

BUSINESS OVERVIEW

LEGISLATIVE MANDATE

PPEC Act 9 of 1983: supply/cold chain logistics• establishes and mandates PPECB• provides for control & management of orderly of South

African perishable products exports

APS Act 119 of 1990: export certification• appoints PPECB as assignee/public service provider (1991)• ensures export food safety and quality standards of

regulated agricultural products are complied with

PFM Act 1 of 1999: corporate governance• regulates financial management and good governance in

government and public entities• reports to government

EXPORT LEGISLATIVE ENVIRONMENT…

100 % CONSIGNMENTS ARE INSPECTED

APS Act

119 of

1990

PPEC 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

PPECB’S 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)

PPECB CORPORATE GOVERNANCE MODEL

MINISTER OF AGRICULTURE FORESTRY & FISHERIES

BOARD OF DIRECTORS

EXCO

7

SETTING

VISION

&

MISSION

IMPLEMENTATION

&

REPORTING

V I S I O N M I S S I O N S T R A T E G Y

O R G . V A L U E S

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 MISSION…

OUR VISION…

PROFESSIONALISM

ACCOUNTABILITY

PASSION

INTEGRITY

CONFIDENCE

VALUES

STRATEGIC OBJECTIVES

SO1•ENHANCING THE CREDIBIILITY OF THE EXPORT CERTIFICATE

SO2

•SUPPORTING THE EXPORT COMPETITIVENESS OF SA PERISHABLE PRODUCTS INDUSTRIES

SO3

• STRENGTHENING PPECB’s CAPACITY AS A CREDIBLE SOURCE OF STRATEGIC INFORMATION FOR SERVING INDUSTRIES & STAKEHOLDERS

SO4

• SUPPORTING GOVT. IN ENSURING CONFIDENCE IN QLTY ASSURANCE & FOOD SAFETY SYSTEMS FOR LOCAL PERISHABLE PRODUCT MARKETS

SO5• SUPPORTING GOVT. IN DEVELOPING SYSTEMS TO ENSURE COMPLIANCE WITH SA

FOOD SAFETY & QLTY STANDARDS FOR IMPORTED PRODUCT

10

11

Quality Inspections

Training

&

Advice

Cold Chain

Management

Research &

Development

Food Safety

Audits

Industry

Statistics

Inland

Phyto

Inspections

Private

Certification

Services

PRODUCT & SERVICE OFFERING

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

PPECB’s OPERATING MODEL

Business Operations

• Statutory Services

• Value Added Services

• Development Services

Governance

• Board Governance

• Chief Executive’s Office

• Communications & Marketing

• Legal & Secretariat

• Risk Management

Corporate Services

• Human Resources

• Information Technology

• Finance

• Internal Audit

• Business Management Systems

Cape Townh

George

hh Port Elizabeth

h East

London

h Durban

h Maputo

(seasonal)

Lesotho

h

Upington

(seasonal) hKimberley

h Bloemfontein

h Johannesburg

Zimbabwe

Mozambique

Namibia

PPECB offices vs. Prod. Regions

Tzaneen

Nelspruit

Citrusdal

Ceres Worcester

Grabouw

Paarl

15

pome

stone

sub-

tropical

citrus

grapes

other


Fully rolled-out a Harmonisation Program in support of ISO17020 accreditation by SANAS

Hosted an Inaugural International HarmonisationWorkshop on Commercial Quality Standards for Fresh Fruit& Vegetables for Countries of Africa

Rolled-out strategic partnership with the JHB marketfocusing on capacity building for emerging Growers

261 Food Safety Audits and 116 surveillance audits wereconducted

Enhanced working relations with the United NationsEconomic Commission for Europe (UNECE)and theOrganisation for Economic Cooperation andDevelopment(OECD)

Enhanced Cold Chain R&D Capacity through developingsynergies with USB

Inspection

60 427 Certificates processed

DAFF was assisted with 10 121 MRL samples

Cold Chain

148 39 containers inspected

188 vessels were surveyed

487 cold stores inspected

2 577 manifests were audited

88 276 containers of perishables exported

365 119 pallets of perishables were exported

Value Added Services

Division maintained continuity amid staff movements atsenior levels

PERFORMANCE HIGHLIGHTS..cont



Accreditations to continue certifying against internationalstandards withstood scrutiny by the Southern AfricanAccreditation Systems (SANAS)

Good advances made in attaining the anticipated ISO17020 international competency based accreditation forPPECB’s Inspection Body

PPECB’s Mycotoxin Laboratory still sets the benchmark forquick turn around times (analysis and availability ofresults) for groundnut analytical services in RSA

Renewed Cold Chain R&D strategic focus and drive

Strategic partnerships with JFPM and NAMC deliveredsignificant initial results during the reporting period

PERFORMANCE HIGHLIGHTS PPECB Laboratory Services:

Broadened scope of analysis to include dried fruit, tree nuts, spices and consumer food product matrices

Analysis of food commodities for fat content

Excellent demand for analytical services supported good financial results at year-end

Certifications Services:

Increased demand from Clients for HACCP certifications

GlobalGAP remained our flagship offering by volume

Cold Chain Research and Development

Board approved 5 year R&D Strategy

3 projects commissioned under new strategy


Training and Development

9 small scale farmers certified to globally recognised good agricultural practices (GAP)

Further 8 small scale farmers received GAP pre-audits to determine their state of readiness to be certified

In partnership with the NAMC trained 26 emerging black farmers on Global-Gap

00000000

SUSTAINABILITY REPORT

Holistically managing economic, social and environmental risks and opportunities to deliver on PPECB’s

short and long term strategies.

DEFINING SUSTAINABILITY

SUSTAINABILITY FRAMEWORK

ENVIRONMENTAL

√ Reduce carbon footprint, enhance environment andpartner in Food Security Initiatives(Project UHAMBO)

SOCIAL

√ Stakeholder engagement

√ CSI initiatives

ECONOMIC

√ Financial viable projects

√ Integrate IT into business operations

√ Optimize, execute and continuous reporting

SUSTAINABILITY NEEDS VISIBILITY

Communicate and Track PPECB KPIs

Visible and integrated tracking of objectives

Monitor Operations and Identify Risks

Connect business and systems

Take Action

Effective leadership to execute and manage the properimplementation of Business Strategic Objectives

Proper Board & Executive Management independentperformance evaluation

Broadened independent evaluation to include MiddleManagement

CHALLENGES

Internal

Capacity of DAFF to support realisation of Strat. Objective

Capacity (Aging Technical Skills)

Communication (Geographic Spread of the Business)

Funding Model (Integrated Model ito Strat. Objectives)

External

Outdated legislation

Rising Cost of doing business

International Competitiveness

To offer a conducive environment for

dynamic and knowledgeable people in

order to build a diverse workforce

representative of the South African

Society.

• Investment in people development

• Creating an enabling environment

• Application of best “people processes”

Mission about People

Vision on People

PEOPLE MANAGEMENT & TRANSFORMATION

Integrated Talent Pipeline

Management

Creation of People

Capacity to deliver on

Business Strategy

Application of Best People

Practices

Creating Intrinsic Value for

Stakeholders

Entrenchment of Employee

Wellness

•Career Path

•AETP

•Performance Management

•Key Skills Retention

•People Development

•Integrated Skills Development Plan

•Creation of Specialist positions

•Harmonisation programme

•Leadership Development

•Assisted study scheme

•Bench Marks

•Policy Reviews

•Measure Organisation

effectiveness

•Leverage technology for optimal

people management

•Effective consultation structures

Fully integrated Employee Wellness

Programme

Employee wellbeing utilisaiton

reports

•Employee perception surveys

•Effective reporting

•Engaged Staff

Marketing positioning decisions

•Training spent 3.4% of cost of

employment

•Legal compliance

•Accelerated skills transfer

•11 PDI’s on new Management

Development Programme

•32 Promotions

•103 AETP Students enrolled

•48 Graduated at NQF Level 5

•85% of staff exceeded standards

•WSP

•R169 500 study assistance

People Strategic Objectives Outputs Performance Indicators

WORKFORCE PROFILE MARCH 2010

EMPLOYMENT EQUITY PROFILE

Permanent Employment April 2008 April ‘09 April ‘10

African Male 47 (16.21%) 77 (23.19%) 85 (24.4%)

African Female 18 (6.2%) 40 (12%) 53 (15.2%)

Coloured Male 45 (15.51%) 53 (16%) 56 (16.0%

Coloured Female 26 (9%) 25 (7.5%) 28 (8.0%)

Indian Male 13 (4.5%) 12 (3.6%) 12 (3.4%)

Indian Female 1 (0.3%) 3 (1%) 5 (1.4%)

White Male 103 (35.52% 88 (26.5%) 77 (22.1%)

White Female 37 (12.76%) 34 (10.24) 32 (9.2%)

People living with disabilities 0 0 1 (0.3%)

FINANCIAL RESULTS

OPERATIONAL REALITIES

Reality Business impact Strategic & budget response

Volume sensitive to

market & economic

factors

Fluctuations in fees & levies

Recovery of expenses

High inflation basket, i.e.

accommodation, travelling,

label printing

Risk Management Committee

Delivery of value added services

Internal Financial Management Forum

Maintain appropriate Reserve Levels

Project on alternative methodologies

Project on electronic information sharing

PPECB is a regulatory

operator

Who needs to fulfill

legislative requirements

Compliance driven

Consistency in application

Risk adverse

Resource & skill intensive

Legislative review


Project on electronic data interchange

Programme: Harmonisation, training & development

ISO 17020 certifications

Internal and external audits

Diverse stakeholder

needs & operating

practices

Decentralised operations

High responsiveness

Resource intensive

Activity intensive

Cost pressure


Project: CCQI on clod chain management


Delivery of value added services

Stakeholder interactions

Responsibility of Public

Entity to respond to SA’s

social needs & APEX

priorities

Transfer skills and knowledgePPECB Training Academy

AETP

Fulfill PFMA, supply chain

and governance

requirements

Structures

Effective systems & controls

Governance reporting

Operational measurements

Employ technology to enhance controls

Security of assets, & information

Training & development

Internal & external audits

Reality Business impact Strategic & budget response

Cold chain temperature

management risks

Standardised processes

Monitoring & control

CC Research and

development

Information management

Risk management

Industry capacity building

Project: Alternative methodologies CCQI

Stakeholder workgroups

R&D Programmes

Activity points are

geographically widely

spread

Resource intensive

Harmonisation in application

Activity intensive

Communication

Technology



Programme: Harmonisation, training & development

Decentralised decision making

Teams & work groups

Expenditure management

Highly seasonal activities

Resource intensive

Activity intensive

Flexible planning &

coordination system

Multi-skilling & tasking

Flexible work pool


Multi-skilling

Accelerated Skills Transfer

Monthly forecasting and adjustment

Expenditure management

People turnover

Align remuneration practices

Transfer knowledge and skills

Institute growth & learning

practices

Revisit expense allowance

reimbursements

Fair remuneration practices

Employee welfare programme

Salary benchmarking

Training & development programmes

Succession planning

OPERATIONAL REALITIES continued…..

HIGHLIGHTS 2010

Income R152.6million, up by 5% on budget

Surplus R19.5 million

Debtors collection 36 days against a target of 55 days

Bad debt as % of income 0.08%

Cash reserves R86.7 million (R71.5m)

Preferential Procurement 56% in value from BEE scored entities

Fruitless & wasteful

expenditureR0

Irregular expenditure < R20000 (1 incident)

Unauthorized expenditure R0

External Audit Report Unqualified

FINANCIAL PERFORMANCE

This Year

R’000

Budget

R’000

Prior Year

R’000

Income R147 288 R137 032 R136 485

Interest received R5 312 R5 892 R6 239

Expenses R133 060 R144 924 R125 365

Net result R19 540 R0,00 R17 358

FINANCIAL PERFORMANCE

R 0

R 20

R 40

R 60

R 80

R 100

R 120

R 140

R 160

2009-10 budget 2008-09

R 133R 145

R 125

R 20R 0

R 17

Rm

Expense vs Surplus

expenses surplus

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

budget 2008-09

5%

7%

-9%

6%

% c

ha

ng

e

% change

income expenses

INCOME & EXPENDITURE

Income

APS Inspection

Fees62%

PPECB Export Levies22%

Container inspection

2%

Other Services

2%


8%

Capacity Building

1%

Interest3%

Expenses

Employee70%

Activity13%

Computer3%

Rental3%

Capacity Building

2%

Other9%

MAJOR EXPENDITURE

%This year

R’000

Budget

R’000

Prior year

R’000

%

Bud

%

PYr

Employment cost 70% R93 227 R96 606 R89 885 96% 104%

Activity cost 13% R16 792 R18 529 R14 488 91% 116%

Computer expenses 3% R4 008 R5 232 R4 246 77% 94%

Rental & maintenance 2% R3 097 R3 303 R2 698 94% 115%

Equipment & Consumables 2% R2 120 R1 492 R2 531 142% 84%

Training 2% R3 228 R8 746 R2 157 37% 150%

Telephone & fax 2% R2 097 R3 303 R1 776 63% 118%

Corporate identity 1% R1 663 R2 083 R1 153 80% 144%

Depreciation 1% R1 879 R1 090 R837 172% 224%

Other expenditure 4% R4 949 R4 540 R5 594 109% 110%

Total expenditure 100% R133 060 R144 924 R125 365 92% 106%

FINANCIAL RESULTS - HISTORY

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

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10

R'0

00

Years

Income Expenditure

FINANCIAL POSITION

This year

R’000

Prior year

R’000

Reserves R97 508 R77 967

Non-current assets R15 662 R16 640

Receivables R19 597 R20 803

Investments held and cash R86 677 R71 551

Liabilities R24 428 R31 027

FINANCIAL POSITION

R 0 R 10 000 R 20 000 R 30 000 R 40 000 R 50 000 R 60 000 R 70 000 R 80 000 R 90 000

2009-10

2008-09

R 86 677

R 71 551

R 24 428

R 31 027

R 19 597

R 20 803

R 15 662

R 16 640

Rm

non-current assets receivables liabilities cash

AGEING OF RECEIVABLES

R 0 R 2 000 R 4 000 R 6 000 R 8 000 R 10 000 R 12 000

0 - 30

31 - 60

61 - 90

91 - 120

120+

R 10 644

R 3 921

R 540

R 38

R 124

R 9 491

R 2 821

R 231

R 64

R 1 209

Age analysis R'000

Days

ou

tsta

nd

ing

2008-09 2009-10

MTEF 2011 TO 2014

2011

ENE

R’000

2011

Budget

R’000

2012

R’000

2013

R’000

2014

R’000

Income R154 640 R166 080 R181 649 R191 766 R208 321

Expenses R154 640 R164 380 R181 649 R191 766 R208 321

Net result R- R1 700 R- R- R-

IN SUMMARY…

Current Position• Solvent in accumulated reserves

• Supported by liquid assets

• Strong cash reserves

• Renewed technology

World in recovery• Volumes under pressure –

relatively strong Rand

• Supermarkets are discounting prices

• Relatively high input costs grower inflation

• Reduced credit availability

• Worldwide aging in population

• Limit expenditure on fruit

Outlook for PPECB

• Cautious but expected financial results will be met

• Higher risk in credit accounts

• Expenditure under upward pressure

• Focus on real efficiency improvement

• Reprioritization of funds limited – people 70%, activity 13% other 17%

Creating World-Wide Confidence in South African Perishable Export

Products

Thank You

perishable products export control board 2009-10...

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