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

3. 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

4. The Strategic Blueprint

5. 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

6. 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

7. Four Pillars of Success

8. Long-Term Shareholder Value

9. 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

10. Defining value in Customer Terms

11. Strategic Initiatives to Drive Customer value

12. Internal Business Process

13. 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

14. 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

15. Understand our People Requirements

16. Financial Projections

17. 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

18. 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

19. Revenue Budget 2007/08 DIVISIONRevenue Profit Margins Profit Margins % Origin 17 621 681 839 128 5% Letterpress 22 414 042 1 067 335 5% Litho 7 111 410 (660 623) -8% Book Binding 10 665 458 (678 751) -6% Form Binding 26 937 141 657 003 2% PoD Section 11 190 374 978 484 10% Security Binding 37 571 636 7 884 555 27% Rubber Stamp 2 361 910 525 991 29% SUB TOTAL 135 873 653 10 613 123 8% Government Printing Works

20. Revenue Budget 2007/08 DIVISIONRevenue Profit Margins Profit Margins % Contract Printing 95 000 000 3 928 216 4% Face Value Services 39 937 874 1 597 515 4% Regional Offices 21 375 231 855 009 4% Paper Stores 77 816 062 00% Stationery Stores 143 331 453 5 733 258 4% Publications000% Government Gazettes 46 192 727 3 598 707 8% SUB TOTAL 423 653 347 15 712 705 4% CONSOLIDATED REVENUE/SURPLUS 2007/8 559 526 999 26 325 827 5% Government Printing Works

21. 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

22. THANK YOU Government Printing Works