Parliamentary Portfolio Committee on Agriculture, Fisheries

1
gijima
PERISHABLE PRODUCTS EXPORT CONTROL BOARD
STRATEGIC PLAN 2009_13
Parliamentary Portfolio Committee on Agriculture,
Fisheries Forestry Presentation 01 July
2009 Elaine Alexander Chairperson
2
PRESENTATION OUTLINE

• BackGround
• Strategy In Detail
• Employment Equity, Transformation Skills
  Development
• Finance Budgets

3
BACKGROUND
4
PPECBS ROLE I.T.O LEGISLATIVE MANDATE

• Act 9 of 1983 PPECB ACT (supply/cold chain
  logistics)
• establishes and mandates PPECB
• provides 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 entities
• reports to government

5
Export legislative Environment
Quality MRL Food safety Traceability
PPECB
Temperature Cold treatment management Equipment
certification
Temp instruction letter
Phytosanitary requirements Bilateral agreements
Ministry
100 CONSIGNMENTS ARE INSPECTED
EU 1580/2007 APPROVAL
STATUTORY ORGANISATION
6
Plant Plant Products Policy vs Implementation
Current Scenario
EXPORT LOCAL IMPORT
Phytosanitary Policy DAFF DOH
Phytosanitary Implementation DAFF, PPECB DOH
Product Quality Policy DAFF DAFF
Product Quality Implementation PPECB DAFF, (PROKON??)
Food Safety Policy DAFF DAFF?? DOH?? DOH
Food Safety Implementation PPECB DOH? DOH (PG)
Cold Chain Policy PPECB
Cold Chain Implementation PPECB
7
CURRENT PPECB ENVIRONMENT

• APS product quality and food safety for
  regulated fruit and vegetable products
• Inland Phytosanitary Inspections for Non-Cold
  Treatment Markets (EU)
• Cold chain perishable products
• Cold chain - special market protocols
  (phytosanitary) (Japan IRAN USA etc)
• Value added services services that enhance the
  competitiveness of industry
• Capacity building AETP PPECB Training Academy
• CAADP (Namibia Tanzania Kenya Swaziland
  Mozambique)

8
PPECB Operating Environment
Offices 42
Number of listed product groups 315
Inspection points 1350
Inland loading points 380
Vessels at port 395
Active client accounts 1 611
Supplier accounts 1 764
Employees 365
S T man days 17 427
Computer workstations 207
Billable hours 378 608
Kilometres traveled 3,5 million
9
PPECB STRATEGY IN DETAIL 2009_2013
10
Strategic Context

• Government Priorities for the Next 5 Years
• Creating decent work sustainable livelihoods
• Education
• Health
• Rural Development, food security Land Reform
• Fight against crime Corruption.

11
Strategic Context
Medium Term Strategic Framework 2009

• Fight against crime and corruption
• Develop Cohesive and sustainable Communities
• Improve International Cooperation
• Implement sustainable natural resource
  management
• Democratic developmental State.

• Speeding up growth transforming economy create
  decent work sustainable livelihoods
• Social Economic Infrastructure
• Rural Development linked to Land Reform
• Investment in Skills Human Resource base
• Improving Nations health profile

12
Strategic Context
PPECBs Expression in the Medium Term Strategic
Framework

• SP-1 -gt Speeding up growth transforming economy
  create decent work sustainable livelihoods
• SP-3 -gt Rural Development linked to Land Reform
• SP-4 -gt Investment in Skills Human Resource
  base

13
Strategic Context

• Sector Plan for SA Agriculture
• Global Competitiveness Competitive Business
  Intelligence
• WTO (SPS, TBT)
• Growth in Industry Competitiveness
• Migration from Conventional to Containerized
  Shipping
• Policy/Implementation Gap Food Safety and Product
  Quality.

14
THE PERISHABLE PRODUCTS EXPORT CONTROL BOARD
15
WHY THE PPECB? (REASON FOR EXISTENCE)

• Legislative Imperative (PPECB Act APS Act)
• Supportive System to a Developmental State
• CLIENT/STAKEHOLDERS.

16
INSTITUTIONAL GOVERNANCE MODEL
Minister of Agriculture Forestry Fisheries
Board of Directors
CEO Executive Management
17
Our vision
A Partner in Global Competitiveness of South
African Perishable Products
Our mission
To build competitive capacity in our people
systems in Industries we serve in order to
instill world-wide confidence in South African
Perishable Products
18
VALUES

• PROFESSIONALISM
• ACCOUNTABILITY
• PASSION
• INTEGRITY
• CONFIDENCE

19
Strategic objectives

• Enhancing the credibility of the South African
  Export Certificate
• Supporting the export competitiveness of the
  South African perishable products industries
• Strengthening PPECBs 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

20
PPECB Business Model
Statutory Service
Value added
Development Service
21
Quality Inspections
Research Development
Food Safety Audits
Training Advice
Industry Statistics
Inland Phyto Inspections
Cold Chain Management
Private Certification Services
22
PPECB Value Chain Analysis
Orchard
Packhouse
Inspection
Coldstore
Inland Depot
Inspection
Inspection
Export port
Coldstore
Inspection
Ship
Import port
Discharge
Loading
Inspection
Depot
Supermarket
Consumer
Coldstore
23
Funding sources

• Statutory Levies
• Statutory Fees
• User Pays
• Sourced Funding

24
PPECB offices
Tzaneen
Nelspruit
Citrusdal
Ceres
Worcester
Grabouw
Paarl
25
Production regions
Zimbabwe
Mozambique
Maputo
h
Johannesburg
h
h
Kimberley
Namibia
h
Upington
h
Durban
h
Lesotho
Bloemfontein
h
East London
h
h
h
George
Port Elizabeth
h
Cape Town
26
(No Transcript)
27
PPECB in the supply chain
28
PPECB in the supply chain
29
PPECB in the supply chain
30
PPECB in the supply chain
31
(No Transcript)
32
EMPLOYMENT EQUITY, TRANSFORMATION SKILLS
DEVELOPMENT
33
PEOPLE DEVELOPMENT AND TRANSFORMATION
Vision on People
Mission about People
34
PEOPLE STRATEGIC OBJECTIVES
OUTPUTS
PERFORMANCE INDICATORS

• 32 PROMOTION
• 103 AETP STUDENTS ENROLLED
• 48 GRADUATED AT NQF LEVEL 5
• 85 OF STAFF EXCEEDED STANDARDS

• CAREER PATH
• AETP
• PERFORMANCE MANAGEMENT
• KEY SKILLS RETENTION
• PEOPLE DEVELOPMENT

INTEGRATED TALENT PIPELINE MANAGEMENT

• INTERGRATED SKILLS DEVELOPMENT PLAN
• CREATION OF SPECIALISTS POSITIONS
• HARMONISATION PROGRAMME
• LEADERSHIP DEVELOPMENT
• ASSISTED STUDY SCHEME

• TRAINING SPENT 5.6 OF COST OF
• EMPLOYMENT
• LEGAL COMPLIANCE
• ACCELERATED SKILLS TRANSFER
• 11 PDIs ON NEW MANAGEMENT
• DEVELOPMENT PROGRAMME

CREATION OF PEOPLE CAPACITY TO DELIVER ON
BUSINESS STRATEGY

• BENCH MARKS
• POLICY REVIEWS

MARKET POSITIONING DECISIONS
APPLICATION OF BEST PEOPLE PRACTICES

• MEASURE ORGANISATION
• EFFECTIVENESS
• LEVERAGE TECHNOLOGY FOR OPTIMAL
• PEOPLE MANAGEMENT
• EFFECTIVE CONSULTATION STRUCTURES

• EMPLOYEE PERCEPTION SURVEYS
• EFFECTIVE REPORTING

CREATING INTRINSIC VALUE FOR STAKEHOLDERS
EMPLOYEES WELL BEING REPORTS
FULLY INTERGRATED EMPLOYEE WELLNESS PROGRAMME
ENTRENCHMENT OF EMPLOYEE WELLNESS
35
Workforce Profile May 2009
36
Changes
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
37
FINANCE BUDGETS
38
PPECBs Programmes
39
Current realities
Reality 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 SAs 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
40
Current 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 RD 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
41
Budget 2010
R144.9m
6.3
23
42
Business activities
Based on audited results for 2008-09
43
Expenditure budget 2009-10
? 22.2m
? R16.8m
? -R0.8m
? R6.2m
44
Expense changes funding

• Year-on-year

• Funding requirement

45
Employment Cost
Employees R000 of 2009
Salary Budget 2009 339 R79 095
Assume vacancy rate of 6 (R5 623) (7.1)
Reduced provision for performance incentive (R2 268) (2.9)
Annual increase 9 R7 118 10.0
Statutory levies and contributions R1 385 1.7
New positions 26 R4 616 5.8
Promotions R1 112 1.4
Total 365 R85 435 12.8
46
Programme Expenditure
Programme 2010 Budget R000 2008-09 Budget R000
Statutory Operations R28 135 R20 079 45
Value Added Services R2 719 R2 779 (3)
Development R6 402 R1 634 4
Governance R4 506 R4 018 12
Corporate Services R12 918 R9 653 34
Total R54 680 R38 163
47
Major expenditure 2009-10
of total Budget 2009-10 R000 of total Budget Prior year R000 ?
Employment cost 59 R85 575 65 R80 087 7
Activity cost 23 R33 109 20 R24 042 38
Training expenses 6 R8 746 3 R3 276 167
Computer expenses 3 R4 992 4 R4 545 10
Office accommodation 2 R3 253 2 R2 875 13
Telephone stationary 2 R2 972 2 R2 900 2
Administration 2 R2 456 2 R2 222 11
Depreciation 1 R1 089 1 R811 34
License affiliation fees 1 R973 0 R612 59
Corporate ID 1 R920 1 R756 22
Consultant fees 1 R834 0 R555 50
Total expenditure 100 R144 923 100 R122 686 18
48
Funding position

• Volumes
• Reduced volumes on actual 2009
• Financial impact
• Reduced statutory income by R1.9m (1.7)
• Reduced certification services R266k (5.5)
• Reduced MAP services R577k (11.4)
• Funding requirements
• Total funding requirement R144.9m
• Budgeted volumes at current fees levies other
  income R136.3m
• Shortfall R8.6m (6.3)

49
Fees and levies

• Official CPIX indicator December 2008 10.3
• Statutory services
• Additional funds R8.6 million
• APS Inspection Fees 7.8
• APS Citrus Fees 8.7
• APS Food Safety Fees 8.0
• PPECB Levies 9.6
• Introduce inland container levy of R305 - 23
  pallets equivalence
• Value Added Services
• Certification services MAP 11.0

50
SA Statistics Annual inflation
Source SA Statistics http//www.statssa.gov.za/p
ublications/statstable
51
Fees and levies Long term trends
Entity Unit Levy Annualised ?
CGA 15 kg 2001 21c 2012 41c 6.27
DFPT / SATGI kg 2001 5c 2012 8c 4.37
PPECB Citrus Inland Inspection Carton 2001 25.5c 2009 36.1c 4.44
PPECB Grapes Inland Inspection 5 kg Carton 2001 22.2c 2009 36.2c 6.30
PPECB Sea Export Conventional Pallet 2001 R5.45 2009 R8.66 6.32
PPECB Sea Export Inland Container Citrus Pallet equivalence 2001 R8.45 2009 R12.86 5.96
PPECB Sea Export Inland Container Avocado Pallet 2001 R14.00 2009 R12.86 -1.06
PPECB Container inspection Container 2001 R6.60 2009 R10.90 6.47
52
CAPEX 2010
Capital Items R000
Information Technology Server capacity area network 14 regions - R1.2m Server replacement R350k R1 772
Equipment HPLC laboratory equipment R520k HPLC Fluorescence detector R280k R820
Furniture Head office R102k Regions R1 078k R1 180
Total R3 772
53
In Conclusion

• PPECB presents a break-even budget
• All other fees and levies 7.8 8.0
• Citrus 8.7 - reduced volume and below 3-year
  minimum
• PPECBs levy increase
• Increased by 9.6
• below CPI (6.09) and PPI index (7.68)
• Aligned with industry organisations with similar
  levy structures
• Increase in expenditure due to
• Capacitate PPECB to deliver on legislative
  mandate
• PPECB Training Academy
• Harmonisation programme
• Under recovery due to decreased volumes on citrus
  and PPECB services

54
Thank You
Creating World-Wide Confidence in South African
Perishable Export Products