1. CORPORATE PLAN
2013/14 to 2016/17
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2. PRESENTATION OUTLINE Introduction of OBP Delegation OBP Background
Governance
OBP Corporate Plan
Review process
OBP’s Alignment to Government programmes
Strategic Objectives
Key Objectives and indicators
Financials
Performance Monitoring
Conclusions
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3. OBP DELEGATION Board Members Dr JH Adams : Chairperson OBP Executives
Dr Steven Cornelius : CEO
Mr Matsobane Gololo : CFO
Ms Zodwa Mobeng – General Manager : Legal, Compliance & Company Secretary
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4. OBP BACKGROUND
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5. 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, which became part of the ARC 2000: OBP incorporated on 6th September (OBP Incorporation Act 19, 1999) 2001: OBP received funding of R9 million 2005: State owned land and buildings officially transferred to OBP 2010: Achieved a revenue milestone > R 100 million 2011: Achieved revenue milestone > R 160 million 2013: Allocated funding from Treasury to refurbish manufacturing plant
Incorporated in 2000 – OBP Incorporation Act 19, 1999 (OBP Act)
Incorporated to ensure financial viability & sustainability – access to technology, GMP facilities, etc.
Facility build in 1968:
R&D, Manufacturing, QC labs and Experimental Animals facilities.
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6. Vision, mission and mandate
OBP exists to prevent and control animal diseases that impact food security, human health and livelihoods.
Vision:
To be a global biotechnology manufacturer of animal health products, underpinned by a skilled, innovative and passionate team.
Mission of OBP:
To translate science into biological and health products and technologies resulting in improved animal and human health, food security and safety for all stakeholders.
The primary objective of OBP is to manufacture/produce
quality vaccines for the prevention and control of livestock
diseases in South Africa, Africa and globally.
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7. Workforce Profile Occupational Levels Male Female Total A C I W
Executive Management 2 1 7
Management 4 5 17
Skilled/advanced operational 25 6 8 67
Semi-skilled 30 28
Basic skilled 20 9 29
TOTAL PERMANENT 81 14 68
187
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8. OBP Product Portfolio Bacterial Vaccine Products
Viral Vaccine Products
Actinomyces (Corynebacterium) pyogenes
Anthrax
Black Quarter
Botulism
Botulism/black quarter
Blue Udder
Brucella Rev 1
Brucella S19
Calf paratyphoid (live & inactivated)
Corynebacterium Ovis
E Coli
Enterotoxaemia (pulpy kidney)
Fowl Typhoid
Gangrene Complex
Haemophilus Coryza
Lamb Dysentry
Leukopast 3 (with IBR and PI)
Leukopast
Pasteurella Bovine
Pasteurella Ovine
Septicum
Swelled Head
Tetanus
Vibrio (Campylobacter)
Rift Valley Fever – live, inactivated, Clone 13
African horse sickness
Bluetongue
B-Phemeral
Chlamysure
Lumpyskin
PI and IBR (in Leukopast 3)
Fowl Pox
ORF
Equine Influenza
Other Products
Frozen infective blood against (in conjunction with ARC-OVI)
Anaplasmosis
Heartwater
Redwater African / Babesiosis
Redwater Asiatic / Babesiosis
Antiserum
Diagnostic Reagents (eg dourine, rose bengal)
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9. Business Performance
Unqualified audits from period of 2000/1 to 2009/10 FYs
Qualified audit for 2010/11 FY
Unqualified audit for 2012/13 FY
Significant declines in sales revenue in FY (2012/13) . Revenue well below budget of
R 120 million by 26% (R 31 million)
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10. GOVERNANCE
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11. 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
OBP Incorporation Act (OBP Act no 19, 1999)
Corporate governance codes & protocols
National Key Point
ISO standards & business specific regulatory authorities
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12. Board of Directors
Board was appointed on 1 March 2011 and Chairperson of Board on 1 August 2011
3 Sub-committees :
Audit, Risk and IT Committee
Remco, HR and Ethics Committee
R&D, Sales and Marketing, Operations and Quality Committee (RDSMO&Q Committee)
Committees and board scheduled to meet 4 times per annum
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13. Board of Directors Ms Z Mobeng (Company Secretary)
Mr JH Adams (Chairperson)
Dr PE Hanekom
(Non-Executive Director)
Dr AT Kgasi
(Non-Executive Director)
Mr NT Baloyi
(Non-Executive Director)
Dr ST Cornelius
(CEO)
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14. OBP Structure OUTSOURCED VACANT
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15. GM: Legal, Compliance & Company Secretary
Executive Management Team
Dr ST Cornelius
(CEO)
Dr Theresa Smit
COO
Mr Matsobane Gololo
CFO
Dr Jacob Modumo
BDO
Ms Mpume Ramutle
HR Executive
Mr Pieter Pieterson
Quality Executive
Ms Zodwa Mobeng
GM: Legal, Compliance & Company Secretary
Dr Jeanette Verwey
Acting CSO
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16. Annual Strategy Review Process
Situational analysis conducted
Sales and Marketing (external and competitor environment)
Financial position of the organisation
Production (challenges and capabilities)
Other Divisions
SWOT analysis
Review/identification of strategic goals
Identification of key outcomes and targets of goals identified
Considered available internal resources required to successfully implement strategy
Prioritisation
Alignment of OBPs strategy to government initiatives/plans
Compliance – National Treasury framework for Strategic Plans and
Annual Performance Plans
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17. Planning Cycle Concepts
Constitutional and legislative mandates
National, provincial and local governments planning frameworks and plans
Vision, Mission & Values
Strategic goals (with 5 or 3 year targets)
Budget programme structures
Strategic objectives (with 5 or 3 year targets)
Performance indicators with annual and targets
Reconciliation of budgets and performance targets
Government
wide plans
Strategic Plan
Annual Performance
Plan
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18. Alignment to Government Programmes
As an SOE, OBP will strive to contribute towards the following programmes/initiatives:
National Development Plan:
Economy and employment, economic infrastructure, inclusive rural economy, positioning SA in the world.
PICC SIP11:
Agri-lostics and infrastructure
MTSF:
Outcome 7: Vibrant, equitable, sustainable rural communities, contributing towards food security for all
New growth path –
Job driver 2 – Improving job creation in economic sectors: Agricultural value chain & Manufacturing.
Job driver 3 – Seizing the potential of new economies: Knowledge economy
DAFF’s strategic objectives:
Strategic Goal 1: Increased profitable production of food, fibre and timber products by all categories of producers (subsistence, smallholder and commercial
Strategic Goal 5: Increase contribution of the sector to economic growth and development
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19. National Development Plan
Alignment to Government Programmes
Government programme
Strategy
OBP Alignment
National Development Plan
Economy and development
OBP provides direct and indirect through the manufacturing of vaccines and the support of livestock farmers.
Economic infrastructure
OBP is being modernised and recapitalised
Inclusive rural economy
OBP supports rural livestock owners and farmers.
Positioning SA in the world
OBP competes with its products in world markets.
PICC SIP11
Agri-lostics and infrastructure
OBP indirectly supports this strategy through its support to livestock farmers.
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20. Alignment to Government Programmes
Strategy
OBP Alignment
MTSF
Outcome 7: Vibrant, equitable, sustainable rural communities, contributing towards food security for all
Promotion of vaccination as a cost-effective measure to manage diseases and improve livestock production.
Continued development and manufacturing of vaccines against economically important animal diseases
New growth path
Jobs driver 2: Agricultural value chain
Vaccines continue to play a critical role as a cost effective solution to animal health in livestock production.
Job Driver 2: Seizing the potential of new economies
Vaccine technologies applied by OBP to manufacture products are based on 1st generation biotechnology and there is a need to transition into new innovative “3rd generation biotechnology” for safer, more efficacious and affordable vaccines.
Jobs driver 2: Manufacturing – IPAP2 (Scale-up and broaden interventions in the Plastic, Pharmaceutical and Chemical sectors)
Increased revenues from export of OBP products into current and new markets once the manufacturing facility is GMP certified resulting in job creation.
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21. Alignment to Government Programmes
Strategy
OBP Alignment
DAFF Strategic Plan
Strategic Goal 1: Increased profitable production of food, fibre and timber products by all categories of producers (subsistence, smallholder and commercial)
Strategic Goal 5: Increase contribution of the sector to economic growth and development
OBP’s mandate is to assist government in the control and prevention of animal diseases that impact food security and public health
Improved animal health and reduction in losses due to morbidity or mortality of animals, and ability to export to other markets will contribute to the growth and development of the livestock (agriculture) sector
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22. Strategic Objectives Build a successful, high performance organisation
SG 1:
Build a successful, high performance organisation
SG 2:
Improve business processes and management practices
SG 3:
Build a profitable and sustainable company
SG 4:
Facilitate job creation through indirectly supporting our clients and directly creating subsidiaries, joint ventures, incubating, accelerating and spawning off new business entities
SG 5:
Contribute to government priorities with respect to food security and economic growth
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23. Build a successful, high performance organisation
Strategic Goal 1:
Build a successful, high performance organisation
Objective statement
To build an innovative, passionate, high performance culture through a highly skilled and motivated workforce through improved and on-going human capital development and management:
Improved and on-going human capital development and management
Improved alignment of organisational structure to strategy
Build the brand recognition of OBP
Drive a high performance culture
Build a customer-centric and service focussed business
Design and implement a change enablement framework for OBP
Baseline
Workforce that requires further skills enhancement to align to changing technology, processes and quality standards and increased ability to innovate.
Structure needs to be aligned to strategy
HR and organisational development plan in process of being implemented
Justification
There is a need to introduce significant change in the organisational culture, mind set and performance of employees in the organisation to enable the organisation to adapt to changes in quality, production and industry trends and technology. This will ensure that we reap the benefits of an engaged and diverse workforce
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24. Profitable company with zero debt Manual processes and reporting
Strategic Goal 2:
Improve business processes and management practices
Objective statement
To improve business processes and management practices through the following:
2.1 Optimise business processes through implementation of the Enterprise Resource
Planning (ERP) system
2.2 Provide service delivery support throughout the organisation - Security
management, legal services, stakeholder and communication
services and IT
2.3 Improved financial management and reporting of the company
2.4 Manage and achieve efficiencies across the full value chain for vaccine
production
2.5 Invest in upgrading the quality and manufacturing systems to comply
with local and foreign standards
2.6 Effective plant and utilities management
2.7 Achieve compliance and governance throughout the organisation
2.8 Develop a sustainable Corporate Social Investment (CSI) programme
Baseline
Profitable company with zero debt
Manual processes and reporting
Outdated production systems, processes, facilities and equipment
ISO 9001:2008 certified
Justification
There is a critical need to improve efficiencies and productivity across the organisation – to reduce costs, increase yields and value add and to ensure the profitability and sustainability of the organisation.
Improved business processes and practices are required to improve access to critical information and reports to guide the decision making of the organisation in the short- and long-term.
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25. Build a profitable and sustainable company
Strategic Goal 3:
Build a profitable and sustainable company
Objective statement
To build a profitable and sustainable company focussed on core competencies that will drive future growth and opportunities through the following:
3.1 Increase OBP’s market share in vaccine sales (volume and revenue)
3.2 Increase revenue and profits
3.3 Enhance and invest in product development and innovation
3.4 Commitment to environmental principles in business operations
Baseline
Profitable business
Declining market share
1st and 2nd generation products
Commercial products, orphan disease products and products for social good and many with no or negative gross profit margins
Many products in declining phase of products life-cycle
Limited environmental awareness
Justification
There is a need to increase and grow local and export market share to ensure the sustainability of the organisation and to ensure that our growth strategy is done in a socially responsible manner
There is a need to develop new and improved quality 3rd generation and/or combination vaccines to meet the livestock market needs/demands in South Africa and Africa.
The organisation needs to operate within the strategies and initiatives of the government and to ensure operations contribute to a sustainable environment.
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26. To facilitate job creation indirectly by:
Strategic Goal 4:
Facilitate job creation through indirectly supporting our clients and directly creating subsidiaries, joint ventures, incubating, accelerating, and spawning off new business entities 
Objective statement
To facilitate job creation indirectly by:
4.1 Supplying pharmaceuticals (vaccines) to smallholder farmers to
maintain their herd health and improve production.
4.2 Creating integrated support programmes to ensure smallholder farmers
become productive livestock owners.
4.3 Creating new businesses of which OBP is a shareholder.
Baseline
Currently OBP’s current declining vaccine sales and market share is a reflection of the number of farmers it is impacting.
The sales figures and market share amongst smallholder farmers are much less than for commercial farmers.
Justification
Although OBP creates jobs by directly employing staff to manufacture and distribute its products at the Onderstepoort plant there is also a need to indirectly contribute to job creation. The number of commercial farmers has dropped and smallholder farming is on the rise. It therefore follows that if smallholder farmers are supported that this will be the area of future market growth for the company. OBP can also create additional jobs directly by using its management skills to create or invest in entities.
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27. through its products and services and monitoring their performance
Strategic Goal 5:
Contribute to government priorities with respect to food security and economic growth
Objective statement
To contribute to government priorities with respect to food security and economic growth by:
5.1 Supporting a number of groups of smallholder farmers in each province
through its products and services and monitoring their performance
wrt:
Herd size
Off-take (number of animals harvested per annum).
5.2 Increasing exports of vaccines.
Baseline
Current economic growth is at 2.5%.
Agriculture’s contribution to the GDP is approximately 3.5% and the livestock industries contribute about 60% of this total.
The total value of agricultural exports is
OBP’s share of the vaccine market is approximately 18%.
Justification
OBP exports vaccines mostly to SADC and Africa and to a very limited extent to the rest of the world. If one considers the world’s livestock numbers and the future need for protein then there is potential to grow this side of the business. Exports will generate foreign income.
Meat and meat products are still the best source of proteins for humans. Currently South Africa is a net importer of meat. This is mainly due to an increase in population size, a decrease in heard size and a static off-take. OBP’s interventions can have a positive impact on the heard size and off-take. Obviously OBP cannot be responsible for changing all these targets at a macro scale but it can contribute at a micro level per province.
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28. Estimated budget allocation
Estimated Budget Allocation to Key Initiatives of each
of the Strategic Goals
Strategic Goal
Initiatives
Estimated budget allocation
SG 1
2013/14
2014/15
2015/16
Training costs R R R
Branding R R R
Total R R R
SG 2
Operational expenditure R R R
Repair and Maintenance R R R
Utilities Costs R R R
Quality control costs R R R
Experimental animal costs R R R R R R
SG 3
R&D and innovation R R
Marketing/branding
Administrative costs R R R R R R
SG 4 R R R R R R R R R
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29. FINANCIALS
2013/14 to 2016/17
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30. Financial Projections – Income
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31. Financial Projections – Balance Sheet
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32. Financial Projections – Cash Flow Statement
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33. Facilities and Equipment upgrade/replacement
Project name
2013/14
2014/15
2015/16
Total
Planning, replacement/upgrading of production and packaging equipment
R 96.5m
R 33.5m -
R 130m
New Facility: Phase 1
R 94.0m
New Facility: Phase 2
R 268.4m
R 127.5m
R268.4m
R 492.4m
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34. PERFORMANCE MONITORING
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35. Performance Monitoring
Effective implementation of strategy
Impact of strategic initiatives :
Achievement of KPI’s
Strategic goals achieved
Sustainability
Use experience in annual reviews
Quarterly performance monitoring
Annual performance reporting:
Treasury regulations – Auditor General
Pre-determined objectives
Performance Management of Employees
Alignment to organisational strategy
Quarterly or bi-annul performance monitoring of employees
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36. CONCLUSIONS
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37. Conclusion At an operational level :
Despite negative media reports and a decline in sales, business is projecting revenue achievement of R110 million for the 2013/14 financial year.
Investing profits in:
Development of new vaccines.
Replacing critical equipment to maintain manufacturing capacity.
Emerging sector:
Support through provincial government
Rural vaccine distribution opportunities
Skills development prioritised:
Learnership and Internship programme
Bursaries and development programme
Training budget increased.
GMP project high priority
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38. THANK YOU www.obpvaccines.co.za Dr Steven Cornelius
Chief Executive Officer
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