PERISHABLE PRODUCTS EXPORT CONTROL BOARDpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/111011ppecb.pdf · PERISHABLE PRODUCTS EXPORT CONTROL BOARD 2001020010--11 ANNUAL REPORT

PERISHABLE PRODUCTS PERISHABLE PRODUCTS EXPORT CONTROL BOARDEXPORT CONTROL BOARD

2001020010--11 ANNUAL REPORT11 ANNUAL REPORT

Parliamentary Portfolio Committee Parliamentary Portfolio Committee

on Agriculture, Forestry & Fisheries on Agriculture, Forestry & Fisheries

OCTOBER 2011OCTOBER 2011

Presentation OutlinePresentation Outline

− Business Overview

− Enterprise Risks – Top Six

− Performance Highlights

− People and Transformation

− Financial Results

− Concluding remarks



− Enterprise Risks: Top Six





Perishable Products ExportControl Board (since 1926)

www.ppecb.com

Official Quality Inspection & Certification Agency in South

Africa

A Partner in Global Competitiveness of South African Perishable Products

Our vision…Our vision…

Our mission…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

Our mission…Our mission…

PPECB ResponsibilityPPECB Responsibility

− Responsible for the Orderly Exports of Perishable Products

− Responsible for Export Quality and FoodSafety Inspection and Certification In South Safety Inspection and Certification In South Africa.

− Inland Phytosanitary Inspections for Non-Cold Treatment Markets

Legislative MandateLegislative Mandate

PPEC Act 9 of 1983

• Establishes and mandates PPECB

• Provides for control & management of orderly of South African perishable products exports

APS Act 119 of 1990

• Appoints PPECB as assignee/public service provider (1991)

Ensures export food safety and quality standards APS Act 119 of 1990 • Ensures export food safety and quality standards of regulated agricultural products are complied with

PFM Act 1 of 1999

• Regulates financial management and good governance in government and public entities

• Accountable to executive authority

Statutory OutputsStatutory Outputs

APS Act 119 of 1990PPECB responsibility

Quality

MRL

PPEC Act 9 of 1983PPECB responsibility

Temperature & Cold treatment

management

Agricultural Pest Act 36 of 1983

DAFF Responsibility

Phytosanitaryrequirements

Food safety Traceability

Export Certificate

management

Equipment certification

Equipment & Facility Certifications

Temperature instruction letter

requirements

Bilateral agreements

Phyto Certificate

EU approval 1580/2007

Export Value ChainExport Value Chain

Orchard Pack house Inspection Cold Store Inland

Depot

InspectionExport PortCold StoreInspectionLoading

Ship Import Port Discharge Inspection Cold Store

DepotInspectionRetailConsumer

Service SegmentationService Segmentation

Statutory Non-Cold Treatment Markets (EU)

• APS Inspections on regulated fruit & vegetable products

• Food Safety Audits• PPEC Services on perishable products

Statutory Cold Chain Special Market Protocols

•Phytosanitary services for Japan, IRAN, USA

PPECB

Value added services

•Services that enhance the competitiveness of industry

• Aflatoxin laboratory• Commercial certifications• Research and Development

Capacity Building

•AETP Programme

• Training Fresh Market

PPECB Services

“FORK”“FARM” PRODUCTION PACKING DISTRIBUTION

GOOD AGRICULTURALPRACTICES

GOOD MANUFACTURINGPRACTICES

GOOD DISTRIBUTIONPRACTICES(Temp, equipment/Cold

PPECB link to best PPECB link to best practicespractices

11

PRACTICES(SAGAP/GLOBALGAP)

PRACTICES(GMP/HACCP/BRC)

(Temp, equipment/Cold Chain)

TRACEABILITY/TRACKABILITY/INFORMATION

PRODUCT QUALITY / CONDITION / FOOD SAFETY

HARMONISATION/AETP/R & D

PPECB AccreditationsPPECB AccreditationsPPECB AccreditationsPPECB Accreditations− Statutory Inspection Services

� EU1580 – approved 3rd country inspection authority

− Business Processes� ISO guide 65 (Globalgap, BRC) � ISO 17021(HACCP certifications)� ISO 17025 (Laboratory services)� ISO 17025 (Laboratory services)� ISO 22000

− Certifications Body� TESCO nurture (V10)� Leaf� 360 quality� grasp (globalgap risk assessment on social practices)

12

Historic Fruit VolumesHistoric Fruit Volumes

2,000

2,500

3,000Pallets

Thousands

Average growth 4.17%

0

500

1,000

1,500

'98 '99 '00 '01 '02 '04 '05 '06 '07 '08 '09 '10 '11

Pallets

Years

Pallets

Major Export MarketsMajor Export Markets

405060708090

Exp

ort %

EuropeUKMiddle East

0102030E

xpor

t %

Middle EastFar EastRussiaNorth AmericaOther

14

Historic Financial ResultsHistoric Financial Results

R 100,000

R 120,000

R 140,000

R 160,000

R 180,000R

'000

R 0

R 20,000

R 40,000

R 60,000

R 80,000

R 100,000

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11

R'0

00

Years

Income Expenditure








Stakeholder PerceptionStakeholder PerceptionIssues raised by Fruit South Africa in a discussion paper

are:

− Quality inspections: Costly and inconsistent quality in service

− Cold Chain: PPEC Act is outdated

− Information: Incomplete and unreliable data

− Electronic data interchange: Delays in delivery of EDI solution

− Loss of accreditation: Reputational damage and loss in access to − Loss of accreditation: Reputational damage and loss in access to

markets

− Unwanted services: Input into food safety, local market and imported

product activities

− Stakeholder Communications: Industry is not informed of

developments

− Board representation: PPEC Act determines representation

− Small growers: DAFF should not use PPECB to address small grower

needs that fall outside PPECB’s mandate

Enterprise RisksEnterprise Risks

1. Delivery of a cost efficient statutory service− Risk: System unaffordable to user and reduced SA

Competitiveness

− Action: Alternative Methodologies

2. Access to accurate information2. Access to accurate information− Risk: Poor decision making and reduced SA Competitiveness

− Action: Electronic Export Certification System

3. Maintain credibility in SA quality & food safety system− Risk: Limited access to global markets

− Action: Clarify PPECB’s role and liaise with government on policy issues

Enterprise Risks Enterprise Risks (continued)(continued)

4. Value Added Services are financially self sustainable− Risk: Increased cost to PPECB and reduced SA Competitiveness

− Action: Enhance service delivery and cost efficiencies

5. Sufficient capacity and appropriate skills5. Sufficient capacity and appropriate skills− Risk: Failure in delivering to mandate

− Action: Competency assessments, coaching, mentoring, training and development programmes

6. Responds effectively to changes in environment− Risk: Reduced global competitiveness

− Action: Review PPEC Act








Strategic ObjectivesStrategic Objectives

1. Enhancing the credibility of the South African Export Certificate

2. Supporting the export competitiveness of the South African perishable products industries

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

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

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

Credibility of Export CertificateCredibility of Export Certificate

− International Harmonisation Workshop on Commercial Quality Standards� 108 delegates from 18 African Countries

− International standards forum meetings� OECD, UNECE, Head of Inspectorates Meeting� OECD, UNECE, Head of Inspectorates Meeting

− Alternative Risk-based Sampling Methodology� Studied and submitted a concept on an to DAFF

� Continue research on appropriate sampling sizes

Credibility of Export CertificateCredibility of Export Certificate

− PPECB Cold Chain� Benchmarked current cold chain protocols

� Continue with alternative container loading and monitoring methodologies

� Continue with implementation of port activity auditing and introduction of consistency measures

− PPECB Laboratory− PPECB Laboratory� Proven reliability in mycotoxin analysis by PPECB Laboratory

� All FAPAS measured results (z scores) between -2 and 2

− Harmonisation Programme� Practical competency evaluations.. 326 with competency ratings

of 80% on majority of products

� Accelerated skills transfer programme.. 82 participants

� Specialists Harmonisation workshops.. 98 sessions

Support Export CompetitivenessSupport Export Competitiveness

− Research and development in Cold Chain� Completed post harvest research trials on temperature storage

for garlic products with article published in an international research journal

� Completed project on cold storage for Leuadendron and Leucospernum

� Developed post harvest and shipping protocols for South African Pomegranate with article published in an international research Pomegranate with article published in an international research journal

� Investigated non-destructive monitoring and prediction of rind quality in citrus

− International good practices� Benchmarked SAGAP against GlobalGap V3

� Discuss with NAMC to revive initiative

Support Export CompetitivenessSupport Export Competitiveness

− Accreditations− Completed validation for Fumonisons in pet food and maize

− Moisture analyser testing methodology reduced lead times from 48 hours to 20 minutes

− Established a PMU for SAPiPII− Limpopo - Technology Transfer.. 40 farmers− Limpopo - Technology Transfer.. 40 farmers

− North West - Responsible Pesticide Usage.. 100 farmers

− Limpopo and Eastern Cape - Product Quality.. 49 participants

− Johannesburg Fresh Produce Market− Internal capacity building.. 17 training interventions

Reliable Source of InformationReliable Source of Information

− Inspection information� Information accuracy 90% in week 1 and

� 98% in week 2

− Export information� Reliance on third party service providers

Implementation of EDI due in December 2011� Implementation of EDI due in December 2011

− Access to information� Created web portal for users to register and extract statistical

information

− Management Information� Completed the design and development of a Tool

� Implementation in November 2011








ValuesValues

Professionalism

AccountabilityConfidence

PassionIntegrity

Demographic Profile %Demographic Profile %

March 2011

42%

29%

1%

EE Plan 2011 Target

22%

2%

24%

4%

African Coloured Indian White Disability

Total number of employees: 358 employees

43%

30%

3%

African Coloured Indian White Disability

Gender Profile %Gender Profile %

Male

36

26

20

27

34

25

30

35

40

Female

25

32

20

25

30

35

16 16

4

16

3

20

17

1

910

3

7

0

5

10

15

20

African Coloured Indian White

2008 2011 Target 2011 Target End

30

6

9

0

13

17

8

1

9

15

1

6

9

2

5

0

5

10

15

20

African Coloured Indian White

2008 2011 Target 2011 Target End

Total number of employees: 358 employees

Total Economically Active Population: Source: Stats SA, LFS, March 2007.

Training InterventionsTraining Interventions

− Assessor training: 25 inspectors

− Occupational Health & Safety: 23 representatives

− Change Management: All managers

− Project Management

− Senior Management Development Programme: 4 managersmanagers

− New Management Development Programme: 6 Inspectors

− Team effectiveness

− Study assistance

− Coaching & mentoring: 25 senior inspectors

DevelopmentDevelopment

− Change management: all managers

− Assessor training: 25 inspectors

− Project Management

− Senior Management Development

Programme








HighlightsHighlights

Income R173.8 million, up by 4% on budget

Expenditure R3.4 million, 2% below budget

Debtors collection 35 days against a target of 59 days

Bad debt as % of income 0%

Preferential Procurement 56% in value from BEE scored entitiesPreferential Procurement 56% in value from BEE scored entities

Fruitless & wasteful expenditure R0

Irregular expenditure R0

Unauthorized expenditure R0

External Audit Report Unqualified

Financial PerformanceFinancial Performance

This YearR’000

BudgetR’000

Prior YearR’000

Income R168 028 R161 070 R147 288

Interest received R5 771 R5 484 R5 312

Expenses R161 483 R164 854 R133 060

Net result R12 316 R1 700 R19 540

Financial PerformanceFinancial Performance

Performance

R 120

R 140

R 160

R 180

R 12R 2

R 20

% change

15%

20%

25%

14%

21%

% c

hang

e

R 0

R 20

R 40

R 60

R 80

R 100

R 120

2010-11 budget 2009-10

R 161 R 165R 133

Rm

expenses surplus

-5%

0%

5%

10%

15%

budget 2009-10

4%

-2%

% c

hang

eincome -2% 21%

Income & ExpenditureIncome & Expenditure

Income

Container inspection

Value Added Services

8%

Other Services

3%

Capacity Building

1%Interest

3%

Expenses

Computer3%

Rental3%

Capacity Building

2%

Other9%

APS Inspection

Fees62%

PPECB Export Levies22%

inspection2%

Employee70%

Activity13%

Major ExpenditureMajor Expenditure

%This year

R’000BudgetR’000

Prior yearR’000

IndBud

IndPYr

Personnel expenses 70% R113 219 R112 704 R93 227 100% 121%

Activity cost 14% R22 909 R23 220 R18 912 99% 121%

Computer expenses 3% R5 436 R5 103 R4 008 107% 136%

Rental & maintenance 3% R4 248 R4 690 R3 097 91% 137%Rental & maintenance 3% R4 248 R4 690 R3 097 91% 137%

Training 2% R3 273 R5 264 R3 228 62% 101%

Corporate identity 1% R1 915 R2 759 R1 663 69% 115%

Depreciation 2% R2 192 R2 238 R1 879 98% 117%

Administrative expenses 5% R8 290 R8 876 R7 046 93% 118%

Total expenditure 100% R161 482 R164 854 R133 060 98% 121 %

Financial PositionFinancial Position

This yearR’000

Prior yearR’000

Reserves R109 805 R97 508

Non-current assets R16 200 R15 662Non-current assets R16 200 R15 662

Receivables R21 477 R19 597

Investments held and cash R118 318 R86 677

Liabilities R46 192 R24 428

Financial PositionFinancial Position

2009-10

R 86,677

R 24,428

R 19,597

R 15,662

R 0 R 20,000 R 40,000 R 60,000 R 80,000 R 100,000 R 120,000

2010-11

R 118,318

R 46,192

R 21,477

R 16,201

Rm

non-current assets receivables liabilities cash








In ConclusionIn Conclusion

World in recovery

• Volumes sensitive to market and economic forces

• Volumes under pressure

• Prices remain firm

Outlook for PPECB

• Cautiously confident, but have liquid assets and strong cash reserves

• Higher risk in credit accounts

• Focus on real efficiency • Relatively high input costs grower inflation

• Reduced credit availability

• Worldwide aging in population

• Focus on real efficiency improvement

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

Thank YouThank You

Creating WorldCreating World--Wide Confidence in Wide Confidence in South African Perishable Export South African Perishable Export

ProductsProducts

Documents

PERISHABLE PRODUCTS EXPORT CONTROL BOARDpmg-assets.s3-website-eu-west-1.amazonaws.com/docs/111011ppecb.pdf · PERISHABLE PRODUCTS EXPORT CONTROL BOARD 2001020010--11 ANNUAL REPORT