Portfolio Committee
10 October 2013
| Onderstepoort Biological Products © | October 2013
Outline of Presentation



Introduction
 Historical perspective
 Mandate, vision, mission and values.
 Governance of OBP
Governance Report
 Board of Directors
 Board Committees
 Executive Team
 Organizational Structure
Performance Report
 Key Strategic Thrusts and Outcomes
 Non-financial Performance Highlights for 2012/13 FY
 Workforce Profile
 Gender and Race Distribution
 Gender and Race employment equity targets
 Skills Development
| Onderstepoort Biological Products © | October 2013
Outline of Presentation (continued)


Financial Performance 2012/13
 Financial Performance Highlights for 2012/13 FY
 Financials for 2012/13 FY
 Revenue and Gross Profit Percentage (%)
 Equity and Cash Generated from Operations
 Report of Auditor General
Our true customers
| Onderstepoort Biological Products © | October 2013
Historical Perspective
1908: Establishment of Onderstepoort Veterinary Research Institute
1968:
Dedicated vaccine facility established
1981:
Vaccine facility operated with trade account and able to begin
to fund operations from sale of vaccines
1992:
OBP separated from OVI (ARC)
2000:
OBP incorporated as a SOE on 6th September
2001:
OBP received funding of R9 million (last grant received, to date)
2005:
State owned land and buildings officially transferred to OBP
2007:
Achieved ISO 9001:2008 certification
2010
Achieved a revenue milestone >R100 million
2011
Achieved a revenue milestone >R150 million
2012:
OBP received National Treasury funding of R496 million over the MTEF
period.
| Onderstepoort Biological Products © | October 2013
Mandate, vision, mission and values.
Mandate:
OBP exists to prevent and control animal diseases that impact food
security, human health and livelihood
Vision:
To be a recognised global biotech manufacturer of animal health
products, underpinned by a skilled, innovative and passionate staff
Mission of OBP:
The mission of OBP is to translate science into biological and health
products, knowledge and technology resulting in improved animal and
human health, food security and safety, for all stakeholders.
The primary objective of OBP is to produce quality
vaccines for the prevention and control of livestock
diseases in South Africa, Africa and globally.
| Onderstepoort Biological Products © | October 2013
Mandate, vision, mission and values.
Values:
A high level of integrity
A high level of ethical standards
High standards of quality
Excellence in everything we do
WE Accept that:
Our employees a re our enduring advantage.
• As a state-owned company we have a responsibility to provide for
the public as stakeholders
• We have a responsibility to society and to the environment
| Onderstepoort Biological Products © | October 2013
Governance of OBP

State owned company (SOC) of the Department of Agriculture, Forestry and
Fisheries (DAFF)

3B entity under Public Finance Management Act (PFMA) and Treasury
Regulations

Registered taxpayer

Own OBP Incorporation Act (OBP ACT no 19, 1999)

Corporate governance codes & protocols

National Key Point

ISO standards & business specific regulatory authorities
| Onderstepoort Biological Products © | October 2013
Governance
Report
| Onderstepoort Biological Products © | October 2013
Board of Directors
Director’s Name
Appointed
Dr Harold Adams (Chairperson)
01/08/2011
Dr Patricia Hanekom
03/03/2011
Dr Alfred Kgasi
03/03/2011
Mr Norman Baloyi
03/03/2011
Dr Steven Cornelius (CEO)
03/03/2011
Dr Angela Graham
Resigned
| Onderstepoort Biological Products © | October 2013
Board sub-committees
The Board comprised of one Committee which met at various
intervals in the 2012/13 financial year :
Committee
Board
Sub-committee
• Risk & Audit
• All other matters
that significantly
impacted on the
organisation were
discussed at Board
level
| Onderstepoort Biological Products © | October 2013
No. of meetings
3
Special Meetings
1
4
-
Board of Directors
Appointed 1 March 2011
From left
Mr JH Adams (Chairperson); Dr ST Cornelius ; Dr AT Kgasi;
Mr NT Baloyi; Dr PE Hanekom; Ms ND Mobeng (Company Secretary);
| Onderstepoort Biological Products © | October 2013
Executive Team
Dr S. Cornelius ( Chief Executive Officer); Mr M. Gololo (Chief Financial
Officer); Ms N. Mobeng (General Manager: Legal, Compliance and Company
Secretary); Dr T. Smit (Chief Operations Officer); Ms M Ramutle (Human
Resources Executive; Dr J. Modumo (Business Development Officer); Mr P.
Pieterson (Quality Executive); Dr J. Verwey (Acting Chief Scientific Officer)
| Onderstepoort Biological Products © | October 2013
Organisational Structure
| Onderstepoort Biological Products © | October 2013
Performance
Report
| Onderstepoort Biological Products © | October 2013
Key Strategic Thrusts and Outcomes
Key Strategic Thrust
Key outcomes
1. Build a successful, high
performance organisation profit
 Improved and on-going human capital development
and management.
 Improved alignment of organisational structure to
strategy
 Building the brand recognition of OBP
 Driving a high performance culture
 Building a customer-centric and serviced-focused
business
 Building a change enablement framework for OBP
2. Improve business processes and
management practices
 Optimise business processes through the
implementation of the ERP system.
 Improve internal service delivery support
 Improved financial management and reporting of the
company
 Manage and achieve efficiencies across value chain for
vaccine production
 Invest in upgrading the quality and manufacturing
systems
 Effective plant and utilities management
 Achieve compliance and governance in OBP
 Develop sustainable CSI programmes
| Onderstepoort Biological Products © | October 2013
Key Strategic Thrusts and Outcomes continued
Key Strategic Thrust
3. Build a profitable and
sustainable company
| Onderstepoort Biological Products © | October 2013
Key outcomes
 Increase OBP’s market share in vaccine
sales (volume and revenue)
 Increase revenue and profits
 Enhance and invest in product
development and innovation
 Commit to environmental principles in
business operations
Non-financial performance highlights for 2012/13 FY
• Allocation of R492m over the MTEF from Treasury for the upgrade and
modernization of OBP.
• Allocation of R34m from the Tshwane Animal Health Cluster (an initiative of the
Technology Innovation Agency).
• Review of the strategic direction of OBP.
• ISO 9001:2008 successfully maintained.
• The Quality Assurance Department continued with the implementation of ISO
17025:2005.
• Various activities to improving the production efficiency were implemented in
the various production and packaging departments.
• A plan was initiated to upgrade and replace various critical equipment in line
with the MTEF allocation.
• The R&D section solidified relationships with local and international research
institutes, through collaborative research projects.
• OBP’s market share remained relatively unchanged although the market and
revenue declined substantially.
| Onderstepoort Biological Products © | October 2013
Workforce Profile
Occupational
Levels
Male
Female
Total
A
C
I
W
A
C
I
W
0
1
0
0
0
0
0
0
1
Executive
Management
2
0
0
1
2
0
0
1
6
Management
4
2
1
5
4
0
0
1
17
Skilled/advanced
operational
25
2
0
6
25
1
0
8
67
Semi-skilled
30
0
0
2
28
0
0
7
67
Basic skilled
20
0
0
0
9
0
0
0
29
TOTAL
PERMANENT
81
5
1
14
68
1
0
17
187
Temporary
employees
6
0
0
0
3
0
0
0
29
GRAND TOTAL
87
5
1
14
71
1
0
17
198
Top Management
| Onderstepoort Biological Products © | October 2013
Training and Skills development
Occupational Levels
Top Management
Executive
Management
Management
Skilled/advanced
operational
Semi-skilled
Basic skilled
Total
Male
Female
Total
A
0
1
C
1
0
I
0
0
W
0
1
A
0
2
C
0
0
I
0
0
W
0
1
1
5
4
22
2
2
1
0
5
3
4
21
0
1
0
0
1
6
17
49
23
18
68
0
0
5
0
0
1
0
0
11
8
3
62
0
0
1
0
0
0
7
0
15
57
26
163
| Onderstepoort Biological Products © | October 2013
Financial
Report
| Onderstepoort Biological Products © | October 2013
Financial Performance Highlights for 2012/13 FY
o
Revenue
o
o
Cost of sales
o
o
Decreased from R98.4 to R 89.4 million
Dropped from R37 to R31 million.
Capital expenditure
o
Approximately R20m additional costs were incurred in upgrading the
facility.
o
Operating expenses
o
o
Increased from R62m to R73m
Investment income
o
Dropped from 7m to R3m due to the drop in reserves.
| Onderstepoort Biological Products © | October 2013
Financials – 2012/13
Account
2012
2013
R ’000
Actual
Budget
Actual
Revenue
98 402
119 870
89 032
Cost of sales
37 932
43 982
31 595
Gross Profit
60 471
75 888
57 437
GROSS PROFIT %
61
63
65
Operating income
3 242
675
1 946
76 152
75 964
90 701
(12 439)
599
(31 317)
13
0.5
35
9 506
4 060
6 921
(2 934)
4 659
(24 396)
Taxation
454
1 305
2 956
Net loss
(3 388)
3 355
(21 440)
Total expenses
Operating profit (Loss)
OPERATING LOSS %
Other income
Profit (Loss) before tax
| Onderstepoort Biological Products © | October 2013
Revenue
• R 30,8 million below budget
• R 9, 4 million previous year sales
Expenses
• 19% increase in expenses vs. 9,5%
decrease in revenue
• Water and lights
• Audit fees (Internal audit)
• Repairs and maintenance
Show in graph format your Revenue and loss
Percentage (%)
200 000 000
FINANCIAL PERFORMANCE
150 000 000
100 000 000
Turnover
Operating Expenses
Operating Income (Loss)
50 000 000
-50 000 000
| Onderstepoort Biological Products © | October 2013
2013
2012
2011
2010
2009
-
Equity and Cash Generated from Operations
160 000 000
140 000 000
120 000 000
100 000 000
Cashflow generated from operating
activities
80 000 000
Cash outflow from investing activities
60 000 000
40 000 000
Cash and cash equivalents
20 000 000
-40 000 000
| Onderstepoort Biological Products © | October 2013
2013
2012
2011
2010
-20 000 000
2009
-
Report of Auditor General
• OBP was audited by the Auditor General in 2012/13 FY
• Unqualified audit opinion –Two years in a row
• Achieving all the predetermined objectives still remain a challenge
but improved significantly year on year.
| Onderstepoort Biological Products © | October 2013
Our true customers
| Onderstepoort Biological Products © | October 2013
THANK
YOU
| Onderstepoort Biological Products © | October 2013