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Parliamentary Portfolio Committee Parliamentary Portfolio Committee on Agriculture, Fisheries & Forestry on Agriculture, Fisheries & Forestry
PresentationPresentation01 July 200901 July 2009
Elaine AlexanderElaine AlexanderChairpersonChairperson
PERISHABLE PRODUCTS EXPORT CONTROL PERISHABLE PRODUCTS EXPORT CONTROL BOARDBOARD
STRATEGIC PLAN 2009_13STRATEGIC PLAN 2009_13
PRESENTATION OUTLINEPRESENTATION OUTLINE
BackGround
Strategy In Detail
Employment Equity, Transformation &Skills Development
Finance & Budgets
BACKGROUNDBACKGROUND
PPECBPPECB’’S ROLE I.T.O LEGISLATIVE S ROLE I.T.O LEGISLATIVE MANDATEMANDATE
Act 9 of 1983 – PPECB ACT (supply/cold chain supply/cold chain logisticslogistics)
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 EnvironmentExport legislative Environment……
100 % CONSIGNMENTS ARE INSPECTED100 % CONSIGNMENTS ARE INSPECTED100 % 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
Plant & Plant Products Policy vs Implementation Current Scenario
Phytosanitary
Policy DAFF DOH
Implementation DAFF, PPECB DOH
Product QualityPolicy DAFF DAFF
Implementation PPECB DAFF, (PROKON??)
Food Safety
Policy DAFF DAFF?? DOH??
DOH
Implementation PPECB DOH? DOH (PG)
Cold Chain
Policy PPECB
Implementation PPECB
EXPORT LOCAL IMPORT
CURRENT PPECB ENVIRONMENTCURRENT PPECB ENVIRONMENTAPS – 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)
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
PPECB STRATEGY IN DETAILPPECB STRATEGY IN DETAIL2009_20132009_2013
Government Priorities for the Next 5 YearsGovernment Priorities for the Next 5 Years
1. Creating decent work & sustainable livelihoods;
2. Education;3. Health;4. Rural Development, food security &
Land Reform;5. Fight against crime & Corruption.
Strategic Context:Strategic Context:
Medium Term Strategic Framework 2009Medium Term Strategic Framework 2009
Strategic ContextStrategic Context…………
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;
Fight against crime and corruption;
Develop Cohesive and sustainable Communities;
Improve International Cooperation;
Implement sustainable natural resource management;
Democratic developmental State.
PPECBPPECB’’s Expression in the Medium Term s Expression in the Medium Term Strategic FrameworkStrategic Framework
Strategic ContextStrategic Context…………
SP-1 -> Speeding up growth transforming economy create decent work sustainable livelihoods;
SP-3 -> Rural Development linked to Land Reform;
SP-4 -> Investment in Skills & Human Resource base;
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.
THE PERISHABLE PRODUCTS THE PERISHABLE PRODUCTS EXPORT CONTROL BOARDEXPORT CONTROL BOARD
WHY THE PPECB? (REASON FOR EXISTENCE)
Legislative Imperative (PPECB Act & APS Act)
Supportive System to a Developmental State;
CLIENT/STAKEHOLDERS.
INSTITUTIONAL GOVERNANCE INSTITUTIONAL GOVERNANCE MODELMODEL
Board of Directors
CEO &
Executive Management
Minister of Agriculture Forestry & Fisheries
16
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 visionOur vision……
Our missionOur mission……
PROFESSIONALISM
ACCOUNTABILITY
PASSION
INTEGRITY
CONFIDENCE
VALUESVALUES
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 objectivesStrategic objectives……
PPECB Business ModelPPECB Business Model
Statutory Service Development
Service
Value added
21
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 AnalysisInspection
InspectionInspection
Inspection
Inspection
Orchard Packhouse Coldstore
Ship Import port Discharge
DepotSupermarketConsumer
Inland Depot
Loading
Export port
Coldstore
Coldstore
Statutory Levies
Statutory Fees
“User Pays”
Sourced Funding
Funding sourcesFunding sources……
Cape Townh
George h
h Port Elizabeth
h East London
hDurban
hMaputo (seasonal)
Lesotho
h
Upington(seasonal) hKimberley
h Bloemfontein
h Johannesburg
Zimbabwe
Mozambique
Namibia
PPECB officesPPECB offices……
Tzaneen
Nelspruit
Citrusdal
Ceres Worcester
Grabouw
Paarl 24
Cape Townh
George h
hPort Elizabeth
hEast London
hDurban
hMaputo
Lesotho
hUpingtonhKimberley
hBloemfontein
hJohannesburg
Zimbabwe
Mozambique
Namibia
pomepomestonestone
subsub--tropicaltropical
citruscitrus
grapesgrapes
otherother
Production regionsProduction regions……
h
25
PPECB in the supply chainPPECB in the supply chain……
PPECB in the supply chainPPECB in the supply chain……
PPECB in the supply chainPPECB in the supply chain……
PPECB in the supply chainPPECB in the supply chain……
EMPLOYMENT EQUITY, EMPLOYMENT EQUITY, TRANSFORMATION & SKILLS TRANSFORMATION & SKILLS
DEVELOPMENTDEVELOPMENT
PEOPLE DEVELOPMENT AND TRANSFORMATION
Vision on People
Mission about People
PEOPLE STRATEGIC OBJECTIVES OUTPUTS PERFORMANCE INDICATORS
INTEGRATED TALENT PIPELINE MANAGEMENT
CREATION OF PEOPLE CAPACITY TO DELIVER ON BUSINESS STRATEGY
APPLICATION OF BEST PEOPLE PRACTICES
CREATING INTRINSIC VALUE FOR STAKEHOLDERS
• CAREER PATH• AETP• PERFORMANCE MANAGEMENT• KEY SKILLS RETENTION• PEOPLE DEVELOPMENT
• BENCH MARKS• POLICY REVIEWS
• MEASURE ORGANISATION EFFECTIVENESS
• LEVERAGE TECHNOLOGY FOR OPTIMAL
PEOPLE MANAGEMENT• EFFECTIVE CONSULTATION STRUCTURES
• 32 PROMOTION • 103 AETP STUDENTS ENROLLED • 48 GRADUATED AT NQF LEVEL 5• 85% OF STAFF EXCEEDED STANDARDS
MARKET POSITIONING DECISIONS
• EMPLOYEE PERCEPTION SURVEYS• EFFECTIVE REPORTING
ENTRENCHMENT OF EMPLOYEE WELLNESS
FULLY INTERGRATED EMPLOYEE WELLNESS PROGRAMME
EMPLOYEES WELL BEING REPORTS
• 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 PDI’s ON NEW MANAGEMENT
DEVELOPMENT PROGRAMME
Workforce Profile: May 2009
Changes
April 2008 April 2009African Male 47African Female 18
African Male 77African Female 40
Coloured Male 45Coloured Female 26
Coloured Male 53Coloured Female 25
White Male 103White Female 37
White Male 88White Female 34
Indian Male 13Indian Female 1
Indian Male 12Indian Female 3
FINANCE & BUDGETSFINANCE & BUDGETS
PPECBPPECB’’s Programmess Programmes
Current realitiesCurrent realitiesReality Business requirement Strategic & budget response
Market & economic conditions
Reduced volumesHigh inflation basket, i.e. accommodation, travelling, label printing
Project on alternative methodologiesProject on electronic information sharingProjects on research & development of cold chain practicesEmploy technologyProcurement practices
PPECB is a regulatory operatorWho needs to fulfill legislative requirements
ComplianceResource intensiveSpecific skillsHigh level of judgmentConsistency in application
Legislative reviewProject on alternative methodologiesProject on electronic data interchangeProgramme: Harmonisation, training & developmentRecruitment to fill vacancies
Diverse stakeholder needs & operating practices
Decentralised operationsReduced waste & logistics costHigh responsivenessResource intensiveActivity intensive
Project on alternative methodologiesProject: CCQI on clod chain managementProject on electronic data interchangeDelivery of value added servicesHarmonisation, training & developmentValue added services
Responsibility of Public Entity to respond to SA’s social needs & APEX priorities
Transfer skills and knowledge
Training & developmentPPECB Training AcademyAETPAlliances with partnersExternal funding
Fulfill PFMA, supply chain and governance requirements
Formalise structuresMaintain effective systems & controlsGovernance reporting
Employ technology to enhance controlsSecurity of assets, informationTraining & developmentInternal & external audits
Current realities contCurrent realities cont……Reality Current business impact Strategic & budget response
Cold chain temperature management risks
CC Research and developmentTransfer of knowledgeInformation management
Industry capacity buildingProject: Alternative methodologies CCQIStakeholder workgroupsR&D Programmes
Activity points are geographically widely spread
Resource intensiveIndependent judgmentHarmonisation in applicationActivity intensiveCommunicationTechnology
Project on alternative methodologiesProject on electronic data interchangeProgramme: Harmonisation, training & developmentEmpower management in decentralised regionsEngage in teams & establish work groupsRelatively high accommodation & relief duty costs
Highly seasonal activities
Resource intensiveActivity intensiveFlexible planning & coordination systemMulti-skilling & taskingFlexible work pool
Project on alternative methodologiesRecruitmentHigh activity costMulti-skillingAccelerated Skills Transfer
High people turnover (14.8%)
Align remuneration practicesTransfer knowledge and skillsInstitute growth & learning practicesRevisit expense allowance reimbursements
Adjustment to salariesSkills gap analysisTraining & development programmesISO 17020Succession planningAdjustment to subsistence, travelling and accommodation allowances
Budget 2010Budget 2010
23 %
6.3 %
R144.9 m
Business activitiesBusiness activities
Based on audited results for 2008-09
Expenditure budget 2009Expenditure budget 2009--1010
∆
R16.8m∆
-R0.8m
∆
22.2m
∆
R6.2m
Expense changes & fundingExpense changes & funding
Year-on-year % Funding requirement %
Employment CostEmployment CostEmployees R’000 % 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%
Programme ExpenditureProgramme ExpenditureProgramme
2010Budget
R’000
2008-09Budget
R’000%
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
Major expenditure 2009Major expenditure 2009--1010% of total
Budget2009-10R’000
% of total
BudgetPrior year
R’000∆
%
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%
Funding positionFunding 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%)
Fees and leviesFees 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%
SA Statistics Annual inflationSA Statistics Annual inflation
Source: SA Statistics: http://www.statssa.gov.za/publications/statstable
Fees and levies: Long term Fees and levies: Long term trendstrends
Entity Unit Levy Annualised ∆
CGA 15 kg 2001: 21c2012: 41c 6.27%
DFPT / SATGI kg 2001: 5c2012: 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: R8.452009: 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%
CAPEX 2010CAPEX 2010Capital Items R’000
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
In ConclusionIn 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
• PPECB’s 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
Creating WorldCreating World--Wide Confidence in Wide Confidence in South African Perishable Export South African Perishable Export
ProductsProducts
Thank YouThank You