FOODBEV SETA Food and Beverages Manufacturing Higher Education and Training Portfolio Committee 27th October 2010 Ravin Deonarain CEO

Introduction and Appreciation Thanks and Appreciation: Hon Minister of Higher Education and Training Hon Chairperson of Higher Education and Training Portfolio Committee Hon Committee Members Representatives of FoodBev Seta Council Chairman: Mr Willie Prinsloo Corporate Services Manager: Ms Liezl Gerryts CFO: Mr Raj Rajcoomar Skills Development Projects Manager: Mr Khotso N Potele CEO: Mr Ravin Deonarain Ravin Deonarain

Presentation Outline Food & Beverages Manufacturing Sector Funds Management NSDS Performance Customer Satisfaction Portfolio Committee’s Specific Emphasis Strategic Plans F2010/11 SWOTs Analysis Provincial Allocations Youth Unemployment Ravin Deonarain

FoodBev Sector Economic Characteristics Diverse sector Price sensitive products High production volumes – costs driven Capital intensive and technology driven Intense brand competitiveness Dominance - large companies and multinationals Large number small food manufacturers (85%) Mergers and acquisitions (brands) Ravin Deonarain

FoodBev Sector Typical Companies SA Breweries, Kellogg's, Nestle, Frito-Lay Simba, ABI, Coke Cola, Tiger Brands, Pioneer Foods Premier Foods, Clover, Oceana Fishing, Enterprize Meats, Nabisco, McCain's Foods, Beacon, Cadbury’s Bokomo, Distell, KWV …………. Ravin Deonarain

Economic Characteristics Manufacturing Sector Output 28 % of GDP FoodBev Contribution 18% of manufacturing sector Wages 13,7 % of manufacturing GDP Contribution 5% of GDP Employment 2 % of total economy Employees 220 000 (80% large comp) Companies 7 500 registered/1800 levy (BER, 2009) Ravin Deonarain

Income/Expenditure Trend (Rm) Ravin Deonarain

Highlights Unqualified Audit Report (10 yrs) Expenditure Rate 96% Surplus R 7 m Ploughed back into grants Sector Challenge Companies to accelerate progress of learning programmes Increase Disbursement Rate - Reduce cash-on-hand Ravin Deonarain

NSDS Targets Performance Service Level Agreement 2009/10 Ravin Deonarain

Success Indicator 2009/10 Target PERF %age 80% LARGE 118 148 125% 2.1 80% OF LARGE FIRMS’ AND 60% OF MEDIUM FIRMS’ EMPLOYMENT EQUITY TARGETS SUPPORTED BY SKILLS DEVELOPMENT. IMPACT ON OVERALL EQUITY PROFILE OF FIRMS AND SECTORS MEASURED Success Indicator 2009/10 Target PERF %age 80% LARGE 118 148 125% 60% MEDIUM 130 162 Ravin Deonarain

2.2 SKILLS DEVELOPMENT IN AT LEAST 40% OF SMALL LEVY-PAYING FIRMS SUPPORTED AND IMPACT MEASURED Success Indicator 2009/10 Target PERF %age 40% SMALL 330 435 132% Ravin Deonarain

Success Indicator 2009/10 Target PERF %age BEE Co’s supported 32 48 2.5 ANNUALLY INCREASING NUMBER OF SMALL BEE FIRMS AND BEE CO-OPERATIVES SUPPORTED BY SKILLS DEVELOPMENT. SURVEY PROGRESS AND MEASURE IMPACT. Success Indicator 2009/10 Target PERF %age BEE Co’s supported 32 48 150% Ravin Deonarain

2.7 700 000 workers have achieved ABET Level 4 Success Indicator ABET Level 1- 4 2009/10 Target PERF %age Entered 367 998 272% Completed 75 503 671% Ravin Deonarain

2.8. 125 000 WORKERS ASSISTED TO ENTER AND AT LEAST 50% SUCCESSFULLY COMPLETE APPROVED PROGRAMMES Success Indicator Learning Programmes 2009/10 Target PERF %age Entered 768 1760 229% Completed 460 1058 230% Ravin Deonarain

Success Indicator Skills Dev Support 2009/10 Target PERF %age 3.2. 2000 non-levy paying enterprises, NGOs, CBOs, and community-based co-operatives supported by skills development. Impact of support on sustainability measured with a targeted 75% success rate. Success Indicator Skills Dev Support 2009/10 Target PERF %age NGOs, CBOs, Co-ops Non Levy Paying Companies 66 115 174% Ravin Deonarain

4.1. 125 000 unemployed people assisted to enter and 50% successfully complete programmes Success Indicator Learning Programmes 2009/10 Target PERF %age Entered 500 1057 211% Completed 385 695 181% Ravin Deonarain

To Gain Work Experience - 4.2. 100% of learners in critical skills programmes covered by sector agreements and Nat Priorities from local FET and HET institutions assisted to gain work experience. 70% find placement in employment or self-employment. Success Indicator 2009/10 Target PERF %age To Gain Work Experience - Find placement after completion 50 69 138% Ravin Deonarain

70% operational after 12 months 21 47 224% 4.3. 10,000 young people trained and mentored to form sustainable new ventures and at least 70% of new ventures in operation Success Indicator New Venture Creation 2009/10 Target PERF %age Entered - 31 310% 70% operational after 12 months 21 47 224% Ravin Deonarain

ISOE’s recognised/supported 1 100% 5.1. By March 2010 each SETA recognises and supports at least five Institutes of Sectoral or Occupational Excellence (ISOE) within public and private institutions and through Public Private Partnerships (PPPs) Success Indicator 2009/10 Target PERF %age ISOE’s recognised/supported 1 100% Ravin Deonarain

New Venture Creation Provider 4 5 125% 5.2. Each province has at least two provider institutions accredited to manage the delivery of a new venture creation qualification. 70% of new ventures still operating after 12 months Success Indicator 2009/10 Target PERF %age New Venture Creation Provider 4 5 125% Ravin Deonarain

SAQA Audit of FoodBev SETA 1 100% 5.3. Measurable improvements in the quality of the services delivered by skills development institutions Success Indicator 2009/10 Target PERF %age SAQA Audit of FoodBev SETA 1 100% Ravin Deonarain

Customer Satisfaction Ravin Deonarain

Customer Satisfaction Ravin Deonarain

Major Highlights Exceeded Targets Unqualified Audit Report – 10 yrs Strong Focus Artisan Development Processing and Packaging Operations Leadership and Management Development World Cup 2010 Training of food and beverages vendors/suppliers - fanparks Ravin Deonarain

Performance Scorecard F 2009/10 Percentage Score 0% - 60% 61% - 80% 81% - 100% 101% - 120% >120% Rating 1 2 3 4 5 Performance Description Performance is Poor Performance is below Requirements Performance meets Requirements Performance is above Requirements Performance is Excellent Score: 4.80 = Excellent Ravin Deonarain

Year-on-Year Performance 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 2009/10 DoL Rating Excellent 5/5 Above Reqm 4/5 NSDS 1 NSDS 2 NSDS/SLA target performance for sector Financial Performance Ravin Deonarain

Committee’s Specific Emphasis SWOT’s Analysis Strategic Plans F2010/11 Provincial Allocations Youth Unemployment Ravin Deonarain

Potential Internal Strengths YES NO Core competences in key areas a Adequate financial resources Well thought of by market Well-conceived functional/operational strategies Access to economies of scale Insulated from strong competitive pressures Proprietary technology e.g. Learnerships Ravin Deonarain

Potential Internal Strengths YES NO Cost advantages a Better advertising campaigns Product innovation skills Proven management Ahead on experience curve Better processing capability Superior technological skills Ravin Deonarain

Potential Internal Weaknesses YES NO No clear strategic direction a Obsolete facilities Subpar effectiveness because… Lack of managerial depth and talent Missing some key skills or competences Poor track record-implementing strategy Plagued with internal operating problems Ravin Deonarain

Potential Internal Weaknesses YES NO Falling behind in R & D a Too narrow a product range Weak market image Unable to finance needed changes in strategy Higher overall unit costs relative to key competitors

Potential External Opportunities YES NO Serve more customers a Enter new/other markets or segments Expand product line - broader range of customer needs Look into related products Faster market growth Ravin Deonarain

Potential External Threats YES NO Entry of lower-cost competitors a Rising attractiveness of substitute products (non accredited skills) Costly regulatory requirements Vulnerability to recession and business cycle Changing customer needs Ravin Deonarain

BUDGET F2010/11 SKILLS LEVY BUDGET SPLIT NSF 46.3 ADMINISTRATION 21.2 MANDATORY GRANTS 106 .0 DISCRETIONARY GRANTS 42.4 NSF PROJECT 5.2 INTEREST/PENALIES 10 .1 TOTAL 231.2 Ravin Deonarain

Discretionary Projects Ravin Deonarain

Ravin Deonarain

Youth Unemployment Projects Spend (Rm) Entrepreneur Development through New Venture Creation 1 500 000 Young Entrepreneur Support Mentorship Business Plans Linkages - support organizations (SEDA, banks, etc.) CIPRO Registrations 750 000 Community Based Organisation Grants 1 800 000 Internships & Work Experience Grants 9 600 000 Ravin Deonarain

PROVINCIAL SPREAD (Poverty Alleviation) NVC NGO Ravin Deonarain

“……the SETAs do not provide training “……the SETAs do not provide training. They have a legal duty to disburse 80% of the skills development levy funds and are constituted in governance structures to represent a partnership between government, business and labour to direct skills training in various sectors. The SETAs also work at different levels of the training hierarchy and are intermediaries between business and training institutions using organised networks for workplace training.” Min Blade Nzimande Skills Summit 9 Sept 2010 Ravin Deonarain

Thank You Ravin Deonarain