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ARC TEAM

AGRICULTURAL RESEARCH COUNCIL BUSINESS PLAN FOR 2009 TO 2010 Dr Shadrack Moephuli President & CEO. ARC TEAM. Ms. Jean Davidson – Chairperson (farmer) Prof. Michael Kahn – Chair: R & D Committee Mr. Hamish McBain – Chair: F & I Committee MANAGEMENT Dr. Shadrack Moephuli – CEO

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ARC TEAM

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  1. AGRICULTURAL RESEARCH COUNCILBUSINESS PLAN FOR 2009 TO 2010Dr Shadrack MoephuliPresident & CEO

  2. ARC TEAM • Ms. Jean Davidson – Chairperson (farmer) • Prof. Michael Kahn – Chair: R & D Committee • Mr. Hamish McBain – Chair: F & I Committee MANAGEMENT • Dr. Shadrack Moephuli – CEO • Ms. Anati Canca – Exec. Director: Tech. Trans. • Prof. Mohammed Jeenah – Exec. Director: Research • Mr. Gabriel Maluleke – Chief Financial Officer • Mr. Michael Netsianda – Exec. Director: HR & Corp.

  3. MANDATE (OBJECTS) OF THE ARC AS PER ACT • To CONDUCT RESEARCH, • DEVELOPMENT, &, • TECHNOLOGY TRANSFER, • IN ORDER TO: • Promote agriculture & industry; • Contribute to better quality of life; • Facilitate/ensure natural resource conservation

  4. Policy Considerations (March 2009) • Government’s National Priority • Agriculture Programme of Action • Strategic Plan for South African Agriculture (Sector Plan) • Land and Agriculture Reform Programme (LARP) • National Research & Development Strategy • Ten Year Plan for Science and Technology • African Agenda (NEPAD) • Consolidated Science and Technology Plan of Action • Comprehensive African Agricultural Development Plan

  5. COUNCIL STRATEGIC REVIEW • Growth in agriculture – increased productivity • Growth in exports – innovation (products & processes) • Reduction in rural poverty – productivity improvements • Mitigation of agricultural risks • Business analysis – optimize performance & reduce duplication • Synergy & collaboration • Ratio of scientists – critical mass & optimum performance • Improve efficiency • Improve reporting controls

  6. STRATEGIC CONSIDERATIONS • Increased Focus on Basic/Fundamental Research • Applied & adaptive Research • Human Capital Development • Technology Development & Dissemination • Organizational Performance

  7. VISION & MISSION • VISION: • “Excellence in Agricultural Research and Development” • MISSION: • “The ARC is a premier science institution that conducts fundamental and applied research with partners to generate new knowledge, develop human capital and foster innovation in agriculture, through technology development and dissemination, and competitive commercialization of research results, in support of developing a prosperous agricultural sector”

  8. Strategic Thrusts Strategic Objectives

  9. VALUES • Batho Pele principles • Ons maak ‘n plan • TARGET • Truth • Accountability • Respect • Growth • Excellence • Trust

  10. ARC Mandate: To conduct research, development and technology transfer in order to: • promote agriculture & industry; • contribute to a better quality of life • facilitate/ensure natural resource conservation Mission Statement: The Agriculture Research Council is a premier science institution that conducts fundamental and applied research with partners to generate new knowledge, develop human capital and foster innovation in agriculture through technology development and dissemination, and competitive commercialisation of research results in support of developing a prosperous agricultural sector. Vision: Excellence in Agricultural Research and Development Generate, develop and apply new knowledge and technology Sustainable use and management of natural resources Enhance Nutrition, Food Security and Safety Enhance the ability of the agricultural sector to manage and mitigate agricultural risks Achieve organisational growth and sustainability Technology Transfer & Commercialisation

  11. MINISTER COUNCIL (BOARD) CHIEF EXECUTIVE OFFICER COMPANY SECRETARY CHIEF RISK OFFICER CHIEF FINANCIAL OFFICER MR. MALULEKE EXEC. DIR HR & SUPPORT MR. NETSIANDA EXEC. DIR. R & D Dr. JEENAH EXEC. DIR. TECH. TRANSFER MS. CANCA

  12. Product Portfolio Total Value Chain VEGETABLES LIVESTOCK HORTICULTURE • Primary • Agriculture Processing Packaging / Additional Value add GRAINS Primary Agricultural activity Primary Agricultural activity Primary Agricultural activity Processing Processing Processing Packaging / Additional Value add Packaging / Additional Value add Packaging / Additional Value add ARC AREAS OF PRIORITY Start with • Industries that deliver growth now and/or are positioned for further growth: collaborate & de-bottleneck • Industries that are important for desired outcomes but are not yetcompetitive: lead the way AGRO -- PROCESSING Primary Agriculture Processing Packaging / Value add the Foundation • Fix the basics: scientific solutions • Research & Development • Human Capital Development • Knowledge Infrastructure • Mitigate agricultural risks • Enablers for Innovation Cross-Cutting Issues • New & improved technologies • Technology Transfer • Support LARP • Competitiveness of SA Agric. • Organizational Sustainability

  13. LARP Goals, Strategies & Objectives Poverty Eradication Goals Goals Good Governance Govt. Policies Govt. Policies Job Creation Economic Growth Access & Participation Profitability & Competitiveness Sustainable Agricultural Resource Use Exports Land Reform Production Agribusiness Services & Infrastructure ARC Interventions ARC Interventions

  14. Strategic Objective 1Generate, Develop and Apply new Knowledge and Technology RATIONALE: • Critical component of a knowledge based economy and people; • Underpins generation of new (novel) products/processes/ technologies; • Contributes towards excellence and scientific knowledge; • Enables ARC to use best science to address agricultural problems unique to RSA & Africa; • Generates intellectual property essential for economic development

  15. Strategic Objective 2Sustainable use and management of natural resources RATIONALE: • Improve efficient use of agricultural natural resources for food production; • Ensure sustainable use and management; • Reduce poverty and increase wealth; • Competitiveness of industries dependent on natural resource – based agriculture

  16. Strategic Objective 3Enhance Nutrition Food security and Safety RATIONALE: • Increase access and availability of nutritious food; • Broadening the food base to enhance food security and nutrition; • Improving the inherent nutritional quality of food at source; • Broadening participation in the value chain and reducing waste; • Integrated approaches to optimize impact and adoption of new technologies.

  17. Strategic Objective 4Manage and mitigate agricultural risk RATIONALE: • Reduce vulnerability to climate change; • Solutions and management of pests, diseases, weeds and alien invasives; • Management of natural disasters in agriculture; • Manage risks to increased agricultural productivity and trade

  18. Technology Transfer RATIONALE: • Creation of value through Agricultural R&D • Transfer ability to utilize new & improved technologies • Contribute to growth in agricultural sector through Tech Transfer and adoption programmes • Contribute to increase in exports through the dissemination of technological innovations • Contribute to the reduction of rural poverty through formulation and execution of programmes to address access and improved quality of life

  19. Human ResourcesARC’s Intellectual Asset The HR division’s mandate is: • Develop, review, update and implement comprehensive and dynamic HR policies, procedures and protocols aligned to the core business of the ARC. • Attraction & retention of critical and scarce skills • Human Capital Development. • Implementation of a robust Performance Management System • Maintain sound labour relations with organised labour (OL). • Strive to ensure that ARC is legally compliant with relevant labour laws. • Change Management & Transformation

  20. Strategic Objective 6Achieve Organisational Growth and Sustainability • Human Capital Utilisation • Effective talent management framework implementation • Organizational Development & Design • Fully implemented Organizational structure • All new posts established, profiled, graded and budgeted. • Aligned and improved organisational performance • Implementation of Performance Management System • All employees have quality performance agreements and development plans • Establish performance moderation framework and process • Performance reviews 4. Attracting, developing and retaining Human Capital • Develop and implement a retention strategy and an incentive scheme • Development and implementation of a succession planning model • Implementation of remuneration policy and recruitment strategy

  21. Strategic Objective 6Achieve Organisational Growth and Sustainability (cont.) • Human Capital Development • Development and conducting training needs analysis • Develop 100% of personal development plans for staff • Conduct skills audit • Occupational Health & Safety • Conducting Health & Safety audits • Management of transformation & Diversity • Diversity and change management training • Employment Equity program • Develop Institute EE Plan with Targets • Training of EE Committees

  22. SCIENTIFIC CAPACITY PER RACE30/06/2009

  23. DISTRIBUTION OF SALARY BILL30/06/2009

  24. Finance overview • Analysis of Expenditure • Analysis of Income • Budget Assumptions • Budget Scenarios • Recommended Budget • Medium Term Actions • Risks in the Budget

  25. ANALYSIS OF EXTERNAL INCOME

  26. ANALYSIS OF EXPENDITURE

  27. Baseline Allocation (excl capex and ringfenced projects) vs Personnel Costs

  28. Budget Assumptions For 2009/10 • PG increase 2% • External Income Neutral 0% (Risk) • Personnel Cost Increase 7 % (Risk) • Vacancies & salary adjustments • Cost of living adjustment (inflation) • Roll over capital (FMD facility) R44m • Forecasted deficit 08/09 (R23m)

  29. Revenue PG: R503m External: R338m Other: R23m Expenditure Personnel: (R522m) Operating: (R328m) Depr: (R28m) ADD Depreciation: R28m WC Movement: R3m Cash at Beginning Of Year Capex FMD: (R44m) Other: (R57m) (Deficit)(R15m) Cash Ex OpsR16m Net Cash for Year(R85m) Cash end of Year(R78m) Total R864m Total(R879m) Total R31m R9m Total (R101m) ARC 2009/10 Budget Scenario 1

  30. Revenue PG: R503m External: R338m Other: R23m Expenditure Personnel: (R487m) Oper: (R317m) Depr: (R28m) ADD Depreciation: R28m WC Movement: R13m Cash at Beginning Of Year Capex FMD: (R44m) Other: (R57m) SurplusR32m Cash Ex OpsR73m Net Cash for Year(R28m) Cash end of Year(R19m) Total R864m Total(R832m) Total R41m R9m Total (R101m) ARC 2009/10 Budget Scenario 2

  31. Revenue PG: R503m External: R294m Other: R16m Expenditure Personnel: (R500m) Admin: (R281m) Depr: (R21m) ADD Depreciation: R21m WC Movement:R17m Cash at Beginning Of Year Capex FMD: (R22m) Other: (R20m) SurplusR11m Cash Ex OpsR49m Net Cash for YearR7m Cash end of YearR16m Total R813m Total(R802m) Total R38m R9m Total (R42m) ARC 2009/10 Budget Scenario 4 Approved

  32. BUDGET PER STRATEGIC OBJECTIVE

  33. Medium Term Management Actions (3- 5 YRS) • Rent out unused facilities • Establish a unit to focus on sale of ARC products (e.g. milk, eggs, fruits, etc) • Review all non-value adding Projects • Negotiate Prepayments & Progress payments on contracts • Closure of non- required facilities

  34. Risks in the 2009/10 budget

  35. THANK YOU COMMENTS/QUESTIONS

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