GPW 2007/08 Strategic Plan Portfolio Committee 5 June 2007 Cape Town Government Printing Works

THE GPW CONTEXT  An organisation in transition  Converting to a Schedule 3b company  Organisational renewal process New systems & processes New systems & processes New skills New skills New culture New culture  Migration to a new production facility end of 2008  Key and strategic contributor to DHA turnaround Government Printing Works

The Strategic Blueprint

The GPW Current Reality Aging Staff: 54% of staff over the age of 40. Aging Staff: 54% of staff over the age of 40. Old & Inefficient Production Equipment Old & Inefficient Production Equipment Old Plant Facility: 114 years Old Plant Facility: 114 years Obsolete skill sets Obsolete skill sets

GPW STRATEGY Government Printing Works  GPW’s strategy hinges on 4 pillars or key objectives:  Corporitisation Business transformation Business transformation Legal conversation Legal conversation  Technological Upgrading  Systems  IT  Production Process Optimisation New plant facility New plant facility New equipment New equipment Quicker turnaround times Quicker turnaround times  Marketing Effectiveness & Alignment Consolidation & growing current market position Consolidation & growing current market position

Four Pillars of Success

Long-Term Shareholder Value

MARKETING  Maintain and grow the current product mix oSecurity printing oStandard printing oPublications  Grow security printing into Africa  Restore and maintain customer confidence Government Printing Works

Defining value in Customer Terms

Strategic Initiatives to Drive Customer value

Internal Business Process

DEVELOP R&D STRATEGY Define R&D requirements Define R&D requirements Define expectations for R&D in line with business strategy Define expectations for R&D in line with business strategy Identify R&D risks and mitigating measures Identify R&D risks and mitigating measures Develop appropriate R&D matrix to measure contribution on ongoing basis Develop appropriate R&D matrix to measure contribution on ongoing basis Develop interface/communication channels between R&D and rest of organisation (esp. sales/marketing and production) Develop interface/communication channels between R&D and rest of organisation (esp. sales/marketing and production) Prepare and approve R&D budget Prepare and approve R&D budget Government Printing Works

IMPORTANCE OF R&D STRATEGY  Advantages of Research and Development Scoping new products (experimental research) Scoping new products (experimental research) Development – proof of concept, testing, ideal levels & delivery Development – proof of concept, testing, ideal levels & delivery Manufacturing new technologies Manufacturing new technologies Increase investment – economic impact (+/-3.5% of revenue) Increase investment – economic impact (+/-3.5% of revenue) Forensics Forensics Government Printing Works

Understand our People Requirements

Financial Projections

Financial Projections - Assumptions  Strong growth in sales in Security Printing, Publications and Stationery from 6% in year one, stepping up by 5% each year to a projected growth in sales in year 5 of 26% (needed to operationally fund the Unomatic equipment)  Growth in Sales unaffected by loss of exclusive rights as per draft Security Printers Bill in year 3  Gross Profit Margin: Year one 39%, stepping up to 43% in year five, the strongest contribution coming from improved supply chain management, inventory management and transformation processes within the factory environment  Salaries as 16% of Revenue (in line with industry benchmark)  Marketing Costs as 2% of Revenue  New Passport production equipment requires OPEX budget of R30 million per year  CAPEX of R340 million spread over 5 years Government Printing Works

Financial Projections - Assumptions  Impact on GPW of business integration of current Passport Assembly Personalization process at DHA from a people and process perspective – discussions proposed for alignment  Impact on GPW of implementing E-Passport as a new product and a change to the current product mix is pending clarification with DHA – discussions proposed for alignment  Impact of operating from a new plant from a process and people perspective with DHA – discussions proposed for alignment Government Printing Works

Revenue Budget 2007/08 DIVISIONRevenue Profit Margins Profit Margins % Origin % Letterpress % Litho ( ) -8% Book Binding ( ) -6% Form Binding % PoD Section % Security Binding % Rubber Stamp % SUB TOTAL % Government Printing Works

Revenue Budget 2007/08 DIVISIONRevenue Profit Margins Profit Margins % Contract Printing % Face Value Services % Regional Offices % Paper Stores % Stationery Stores % Publications000% Government Gazettes % SUB TOTAL % CONSOLIDATED REVENUE/SURPLUS 2007/ % Government Printing Works

Priorities – 2007/2008 Priorities – 2007/2008  Corporatisation Business case Business case Draft Security Printers Bill Draft Security Printers Bill  New Printing Factory  Technological Upgrading  Transformation  Marketing and Branding Government Printing Works

THANK YOU Government Printing Works