Development of NECSAThe Research Era

1959The Atomic Energy Board (AEB) is instituted as an autonomous research organization to serve as South Africa’s national nuclear authority and for basic nuclear research.

Cabinet approval for the four point nuclear research and development programme.Four Point Nuclear Programme

Development and refinement of the RSA’s nuclear raw materialsPromotion of nuclear powerDevelopment and utilisation of nuclear technology in industry, medicine, agriculture and for research•Basic research in support of the above

Mining ofUranium

Development of NECSAThe Strategic Era1960 - 1989

Interior of Z-Plant Koeberg fuel element SAFARI-1 fuel element

Commissioning of SAFARI-1 research reactor (1965)

Vaalputs waste disposal facility becomes operational (1986)

•Strategic Weapons Programme

Nuclear Reactors

Koeberg Power Station SAFARI-1 Research Reactor

•Commissioned 1984•Generates electricity•2 Reactors•1 840 MW•Fuel elements

•Commissioned 1965•Research reactor•1 Reactor•20 MW•Fuel elements

Two Koeberg fuel elementsbeing prepared for transport

Actual size of SAFARI-1fuel element

THE COMMERCIALISATION ERA

1989 - 2001

•Commercialization of Nuclear and related products

•Downsizing the organization

•Commercial and non – commercial organizations

November 2001November 2001 Senti Senti

Thobejane joins NECSA As CEOThobejane joins NECSA As CEO

The Mandate:The Mandate: CLOSE The OrganizationCLOSE The Organization TURN AROUND the Business and TURN AROUND the Business and

Align To National Imperatives Align To National Imperatives

THE NEW ERATHE NEW ERA

The ChoiceThe Choice is to create ais to create a

World-class African-based business World-class African-based business

providingproviding Nuclear Technology excellence for Nuclear Technology excellence for

sustained social and economic development.sustained social and economic development.

January/February 2002 January/February 2002 the New Vision is createdthe New Vision is created

February – onwards February – onwards all our Stakeholders are involvedall our Stakeholders are involved MinisterMinister

Deputy MinisterDeputy Minister

DMEDME

Board of DirectorsBoard of Directors

May – June May – June The Vision is Shared With All employees The Vision is Shared With All employees

JuneJune Restructuring Committee is Constituted to Assist Restructuring Committee is Constituted to Assist

With ImplementationWith Implementation

Now The road AheadNow The road Ahead

The future belongs to

those who prepare fo

r

it………

VISION 2010……..A vision of growth….

VISION

Nuclear Technology excellence for sustained

social and economic development.

Mission

Applied research and developmentApplied research and development

Commercial application of nuclear and associated technologyCommercial application of nuclear and associated technology

Fulfilling the state’s nuclear obligations including safeguards agreement

Fulfilling the state’s nuclear obligations including safeguards agreement

Contributing to the development of skills in science and technologyContributing to the development of skills in science and technology

Mission

Total commitment to health and safety, and to care for the environment.

Total commitment to health and safety, and to care for the environment.Human Resource developmentHuman Resource development

Excellence in satisfying stakeholder requirementsExcellence in satisfying stakeholder requirements

Action without vision is only Action without vision is only passing time, Vision without passing time, Vision without

action is merely day action is merely day dreaming, but Vision with dreaming, but Vision with

action can change the world.action can change the world.

Nelson Mandela

VISION 2010VISION 2010 Is about creating our own futureIs about creating our own future

It involves decisions that will successfully It involves decisions that will successfully

guide our businessguide our business

Our aim is to take our business beyond the Our aim is to take our business beyond the

borders of our countryborders of our country

We will economically manage South Africa’s We will economically manage South Africa’s

Nuclear responsibilities on behalf of the Nuclear responsibilities on behalf of the

GovernmentGovernment

Harnessing market principles to optimize Harnessing market principles to optimize

the utilization of our resources the utilization of our resources

Government policy and legislation Government policy and legislation

provide the framework for conducting our provide the framework for conducting our

businessbusiness

We must build meaningful partnerships We must build meaningful partnerships

with all our Stakeholderswith all our Stakeholders

Our competitive advantage is our Our competitive advantage is our

knowledge-base and expertise in the knowledge-base and expertise in the

Nuclear and related fieldsNuclear and related fields

Vision overviewVision overview

Key Elements critical for SuccessKey Elements critical for Success

Align structure with new Vision of nuclear

Create a strategy for turn around and growth

Focus on the core competencies in high technology

Align with the National imperatives

•Research and development

•Human resources development

•HIV / AIDS

•Social upliftment

Managing the RisksKey Elements critical for Success

Managing the RisksKey Elements critical for Success

Nuclear Institute

Ring fence Liabilities and Risks done on behalf of the State

Managing down government liability

Nuclear Waste management

•Exploit capability and capacity

•Research and development

Innovation and DevelopmentKey Elements critical for Success

Innovation and DevelopmentKey Elements critical for Success

Knowledge-based organization capability

Value adding research and developmentFocused on product developmentContracted R&D

National and nuclear imperatives

•Exploit capability and capacity

•For the good of the country

For the good of NECSA and the country

Focus – Nuclear and Non-Nuclear high technologies

Conduct profitable businesses and other activities

Exploit new opportunities in nuclear

Partnerships with a purpose

Development of entrepreneurial skills

Manage liabilities in terms of market related tariffs

Using the new vision as an opportunity to build a new organization with new opportunities

Sustainable GrowthSustainable Growth

For the good of NECSA and the country

Focus – Nuclear and related high technologies

Core competency assessment and exploitation

Value –adding research and development

Package and market

Development of entrepreneurial skills

Impact of Professional HR Management

Using the new vision as an opportunity to build a new organization

Knowledge –Based OrganizationKnowledge –Based Organization

Benefits of strategy

Alignment with national imperatives

Focus on NUCLEAR

Corporate performance management

Align with InnovationHRDSocial upliftmentHIV/AIDS

Refocus on Core Competency of NECSAManaging down of State liabilitiesRing fencing of NUCLEAR activities

Accountability for actionsMeasures of “Score-card” system to pull people toward the overall Vision

Benefits of strategy

Innovation and

Knowledge base

Change Management

Focus on Core competencies

Emphasize and package as Knowledge based organization

Create entrepreneurial spiritManage communication.Transformation built on trust

The style in which we manage the integration process will set the tone

of the new organization.

Vision 2010:10 YEAR IMPLEMENTATION

PLAN

1988 20042002 2007 2010

Phase 1

Phase 2

Phase 3

Tu

rn a

rou

nd

gro

wth

co

ns

olid

atio

n

OUR CHALLENGE TO CREATE A OUR CHALLENGE TO CREATE A

SUPPORTING ORGANIZATIONSUPPORTING ORGANIZATION

A representative Restructuring A representative Restructuring

Committee was appointed in May Committee was appointed in May

to facilitate the process of to facilitate the process of

implementing the new NECSA implementing the new NECSA

VISION 2010VISION 2010

THE RESTRUCTURING PLANTHE RESTRUCTURING PLANSTAGE ONE

•All Divisions and Units internalize the NECSA 2010 Growth Strategy and workshop their sections to :

•Reorganize current divisions into defined business along Nuclear versus Non-Nuclear activities and Commercial

versus Non-Commercial activities

•Create Cost and Profit centers

•Commence the review of policies and operational manual

•Establish an accelerated transformation Plan

•Develop and implement a sound financing structure

•Ring-fence commercial assets

•Corporatize HTP and NTP

A practical approachto building a new

vision

“Leadership is ultimately about how we can

collectively shape our future –”

Joseph Jaworski

VISIONARY LEADERSHIP

we have a clear sense of purpose, notwithstanding the transition into a global player of note and the fluidity of decisions impacting our destiny.

The organisation has focus and will continue to add exemplary value to the economy of South Africa.

VISIONARY LEADERSHIP we are already making headway and we are set to remain a valuable leader in the field of nuclear in terms of our business, research, partnering, training, and community programs …

Necsa is already a strong proponent of growth and development in our country.

Committed to our vision and values

we’re in your world….

Our vision and values define our identity as an organisation as well as the operating ethics and qualities that drive our performance.

Ultimately our values will define how we will achieve our strategic intent to be the pre-eminent African nuclear and related high technology business , of a global stature.

Our vision and strategic direction

With good corporate governance as our foundation, our vision is to further transform the organisation from one focusing only on our current business, to being a successful continental and global player.

Here we are guided by our strategic intent of being the pre-eminent African nuclear and related high technology business of global stature.

Our vision and strategic direction are continuously being informed and influenced by what is happening on the continent and around the globe.

Organization model

NECSA(holding company)

Nuclear Activities

Commercial businesses

Corporate

Services

CORPORATE SERVICES

FACILITY MANAGEMENT

HTP

NTPNUCLEAR

TECHNOLOGY

NUCLEARSERVICES

CEOOFFICE

CHIEFEXECUTIVE

OFFICER

CORPORATISED NUCLEAR CORPORATE SERVICES

FINANCIAL SERVICES

THE NEW NECSA BOARD OF DIRECTORS

CHAIRPERSON : Mr WR Jardine CEO, Kagiso Media

DEPUTY : Dr PM Ngwenya Exec. Director Phathani Consult

Mr JF Brownrigg MD WesternAreas/ Randfontein

Ms L Dlhamini Deloite and Touche ( Accountant)

Mr P Goosen Dept Foreign Affairs

Mr H Haricharun Dept Minerals & Energy

Ms MB Madumise Madumise Consultants

Mr AS Minty Deputy DG, Dept Foreign Affairs

Mr S Motlhaloga Dept Minerals & Energy

Dr P Mpikashe MEDUNSA

Mr LDS Thobejane CEO, Necsa

MEET THE NEW EMC

These are the persons who will lead the organisation into the future…..

Senti Thobejane

CEO, Necsa

Pule Tsatsi

GM, HTP

Don Robertson

MD, NTP

Karel Fouche’

GM, Nuclear Services

Van Zyl de Villiers

GM, Nuclear Technology

Maphutha Diaz

GM, Corporate Services

Ayanda Myoli

GM, Facilities Management

Sybrandt van Vuuren

Acting GM, Financial Services

OUR CHALLENGE TO GENERATE OUR CHALLENGE TO GENERATE

WEALTHWEALTH

We have an opportunity to use our We have an opportunity to use our

skills and intellectual capital to skills and intellectual capital to

perform our mandate to grow and perform our mandate to grow and

indeed to generate wealth through indeed to generate wealth through

Nuclear and related technologiesNuclear and related technologies

CONTRIBUTION TO THE RE-AWAKENING

IN NUCLEAR

At the core of of NEPAD and the African renaissance is the acceptance that Africa’s people and their institutions have the capacity to create, foster and maintain economic, social, and developmental processes and practices that define us as competent and proud citizens of of the continent and the world; on par with the best

In South Africa the nuclear knowledge trends have been following the same patterns as those internationally.

• The existing workforce is aging.• The nuclear knowledge base is shrinking and • The industry is not attracting the much needed young

skilled and professional people to sustain and grow the nuclear industry.

• Knowledge management has become a critical success factor, within the nuclear industry in South Africa .

CONTRIBUTION TO THE RE-AWAKENING IN

NUCLEAR

Our effort

s with

Visi

on 2010 a

re a

imed a

t

givin

g life t

o our contr

ibutio

n.

NUCLEAR TECHNOLOGY

COLLABORATIONCOLLABORATION

Four proposals for collaborative Four proposals for collaborative research projects with local and research projects with local and overseas institutions submitted to NRFoverseas institutions submitted to NRF

Growing interest in NT’s proposal for a Growing interest in NT’s proposal for a feasibility study on a SA synchrotron feasibility study on a SA synchrotron light sourcelight source

Hosting of African Neutron Diffraction Hosting of African Neutron Diffraction MeetingMeeting

High visibility at international High visibility at international conferencesconferences

PBMR SERVICESPBMR SERVICES

Comprehensive safety review of kernel Comprehensive safety review of kernel laboratorylaboratory

Lab coater operation well establishedLab coater operation well established Decommissioning plan for C3/C5 Decommissioning plan for C3/C5

submitted to NNR in preparation for pilot submitted to NNR in preparation for pilot fuel plant fuel plant

Radiation and Reactor Theory services Radiation and Reactor Theory services continuedcontinued

Proposal for irradiation testing of fuel Proposal for irradiation testing of fuel submitted to PBMR, but changes in their submitted to PBMR, but changes in their strategystrategy

NUCLEAR LIABILITIES AND NUCLEAR LIABILITIES AND WASTEWASTE

The draft policy and strategy document on radioactive The draft policy and strategy document on radioactive waste management was published for comment. waste management was published for comment. Implementation would imply that a section of NLM be Implementation would imply that a section of NLM be included in a new National Radioactive Waste included in a new National Radioactive Waste Management Agency reporting directly to DME.Management Agency reporting directly to DME.

Work on the extension of the pipe storage facility for Work on the extension of the pipe storage facility for spent SAFARI-1 fuel will be delayed following DEAT’s spent SAFARI-1 fuel will be delayed following DEAT’s decision that a public scoping will be required before decision that a public scoping will be required before the project can be submitted for a license change the project can be submitted for a license change request.request.

Three consignments containing 360 low-level waste Three consignments containing 360 low-level waste containers from KNPS were disposed of at Vaalputs.containers from KNPS were disposed of at Vaalputs.

I A E AI A E A Progress with the quantification of the HEU containing Progress with the quantification of the HEU containing

waste in drums, which could not be included in the South waste in drums, which could not be included in the South African nuclear material declaration to the IAEA thus far, is African nuclear material declaration to the IAEA thus far, is good and the matter will probably be finalised within the good and the matter will probably be finalised within the next year.next year.

A Member State Support Programme (MSSP) cooperation A Member State Support Programme (MSSP) cooperation agreement between South Africa and the IAEA was signed agreement between South Africa and the IAEA was signed in Vienna. Initial focus will be on the development of in Vienna. Initial focus will be on the development of safeguards measures for the PBMR.safeguards measures for the PBMR.

Necsa’s contributions to IAEA related programmes Necsa’s contributions to IAEA related programmes (Technical Cooperation, AFRA, borehole project, (Technical Cooperation, AFRA, borehole project, safeguards, training) over the past year featured safeguards, training) over the past year featured prominently in the Minister’s address to the Annual General prominently in the Minister’s address to the Annual General Conference in Vienna. Conference in Vienna.

CONTRIBUTION TO THE DEVELOPMENT OF SKILLS

IN SCIENCE AND TECHNOLOGY

THE STEF INIATIVE South Africa is faced with a number of challenges of which the following is the most important:

         Increase the level of competency

         Encouraging young blood into the nuclear industry

         Rectifying the inequalities of the past

         Train and develop to build up the eroded knowledge base which to a large extent is a result of the brain drain

         Develop research areas that are attractive and exciting to students

THE STEF INIATIVE STEF – what is it?

The MOA between Necsa, NNR,

PBMR, & ESKOM

Registered company --- subsidiary of Necsa

What will STEF do ? Source and allocate funds for development National nuclear training strategy Nuclear industry skills audit

What benefit will this programme bring to Necsa? The first agreement is with AREVA

The MOA & JV between Necsa / AREVA

Focus on skills development in nuclear

GOALS of the JV::

 a)   Training located in South Africa and provided by NECSA, AREVA or appointed service providers

b)     Training provided in France

c)     Training located in South Africa and dedicated to disadvantaged people

d) Community Projects

THE STEF INIATIVE…cont’d

MARST PROGRAMMARST PROGRAM

University of North West – M sc University of North West – M sc Radiation Technology students = 25 Radiation Technology students = 25 studentsstudents

Post-graduate research projects = 30Post-graduate research projects = 30 Lecturers in Radiation protection at Lecturers in Radiation protection at

Wits University = 4 annuallyWits University = 4 annually

PSIPSI

•CE appointed as Chairperson of TrustRestructuring

•Composition of TrusteesPatrons of PSI

B TEC

Co-managed by NecsaCo-managed by Necsa Number of jobless person trained annually Number of jobless person trained annually

=700=700 Annual contribution by Necsa =R 50 000Annual contribution by Necsa =R 50 000

SOWETAN NATION SOWETAN NATION BUILDING PROJECTBUILDING PROJECT

Upgrading teachers in maths and Upgrading teachers in maths and sciencescience

Teachers trained = 800Teachers trained = 800

CONTRIBUTION TO REGIONAL DEVELOPMENT

AFRA AND IAEA INITIATIVES

•Conditioning and safe storage of spent Radium sources – Zambia, Zimbabwe, Morocco, Kenya

•Contract for Borehole Disposal Concept used for disposal of spent radioactive sources

•AFRA national coordinator and IAEA technical cooperation officer

•AFRA project coordinators

FULFILLING THE STATES FULFILLING THE STATES NUCLEAR INSTITUTIONAL NUCLEAR INSTITUTIONAL

RESPONSIBILITYRESPONSIBILITY Manage and discharge Necsa’s nuclear Manage and discharge Necsa’s nuclear

liabilities on behalf of Stateliabilities on behalf of State Maintain, develop and utilise radiation Maintain, develop and utilise radiation

technology and facilities as part of technology and facilities as part of National System of InnovationNational System of Innovation

Contribute to SA’s role in the International Contribute to SA’s role in the International nuclear communitynuclear community

Develop and produce nuclear fuel Develop and produce nuclear fuel according to National needsaccording to National needs

Commercial applic

ation of o

ur

nuclear and associated high

technology

COMMERCIAL COMMERCIAL DEVELOPMENTS AND DEVELOPMENTS AND

ACHIEVEMENTSACHIEVEMENTS 60% of all sales are on the export 60% of all sales are on the export

marketmarket The mechanical division was The mechanical division was

accredited as a supplier to the accredited as a supplier to the armaments counter-trade programmearmaments counter-trade programme

The radiation division NTP confirmed The radiation division NTP confirmed its position as a significant supplier of its position as a significant supplier of Mo-99 and NTD siliconMo-99 and NTD silicon

The funding requirement of 67% for The funding requirement of 67% for SAFARI-1 was surpassed through SAFARI-1 was surpassed through transfer pricingtransfer pricing

PBMR contract for the design of PBMR contract for the design of specialised valvesspecialised valves

NTP received the State President Award NTP received the State President Award for export achievement, andfor export achievement, and

Technology Top 100 Award for the Technology Top 100 Award for the export of processed and manufactured export of processed and manufactured materialsmaterials

R & D contract with Dyneon for a range R & D contract with Dyneon for a range of high-value fluoronated compounds of high-value fluoronated compounds

Sirius project – produdtion facility for Sirius project – produdtion facility for the manufacturing of 50 tpa nitrogen the manufacturing of 50 tpa nitrogen trifluoride that is used for manufacture trifluoride that is used for manufacture of electronic computor chipsof electronic computor chips

Production of high quality xenon Production of high quality xenon difluoridedifluoride

VALUE CREATION TOWARDS

SUSTAINABILITY

GROWTH PROJECTSGROWTH PROJECTS

•PBMR

•BOC contract

•SILICON plant

•Water purification project

•Nordion contract

Honing the competitive edge

BOCNecsa has signed a contract

with BOCThe plant is operatingThis contract will generate

substantial income

Honing the competitive edge

PBMR

PBMR is important for the country’s and our future

We will be actively involved in PBMR

GENERATING NEW IDEAS AND PROJECTS

New Value – adding projects

Focused R & D

Accessing employee creativity

and ideas and rewarding them

  Other Projects.

SSOME AREAS THAT MAY BE CONSIDERED ARE

11       Fluorine platform11       Waste research11       PBMR related projects11       Fuel production capability and especially the

possibility of partnering with BNFL in fuel production for Koeberg

11       NTP acquisitions to generate growth11       Projects focused on Africa 11       Corporate Services and Facilities management

rendering services outside the organisation. 

CORPORATISATIONCORPORATISATION

The Plan is focused on two commercial entities

HTP : Flourochemicals

NTP : Radio-isotopes

Ministerial approval obtainedDate for trading is 1 October

When the Minister approved the restructuring of necsa, she envisaged a process that included the corporatisation of HTP and NTP as companies and the introduction of the private sector into the chemical side of the business

NTP

NTP Radioisotopes (Pty) Ltd.NTP Radioisotopes (Pty) Ltd.

Quarterly ReviewQuarterly Review

12 November 200312 November 2003

Financials

BudgetForecastActual

139.0131.765.766.0Sales

42.040.839.243.0GP %

34.228.111.416.7Profit

25.825.814.411.4Overheads

60.053.925.828.1GP

YearYear2ND 6 Months1ST 6 Months

Sales Revenues & Exchange Rates (12 months)

R 0.00

R 2.00

R 4.00

R 6.00

R 8.00

R 10.00

R 12.00

Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 A pr-03 May-03 Jun-03 Jul-03 A ug-03 Sep-03

M onth

Exc

han

ge

Rat

es

0

2

4

6

8

10

12

14

Sales V

alue (M

R)

Sales USD EUR Sales - 2nd Quarter

Gross Profit(Illustrating effect of cost control m easures im plem ented in Apr il)

0%

10%

20%

30%

40%

50%

60%

M o n th

GP

%

Sales 41% 39% 40% 45% 29% 33% 51% 43% 36% 45% 37% 42%

Oc t 02 Nov 02 Dec 02 Jan 03 Feb 03 Mar 03 A pr 03 May 03 Jun 03 Jul 03 A ug 03 Sep 03

S ales – 2 nd Q u arter

HTP

• Mr Pule S Tsatsi was recently appointed as General Manager of HTP

• The Portfolio, comprising of PELCHEM, PELDEV AND PTS, had continued with lower Sales levels, which impacted negatively on Profitability and increased funding requirements.

• The corporatisation of the management unit was delayed due to the negative financial results.

• A Turnaround Strategy: Savings was implemented and although the Year-end forecast funding requirement has improved, it is unlikely that Budgeted levels will be reached.  

HTP

HTP SALES

• The lower Sales trend of the first quarter continued during the second quarter: Sales were only 54% of Budget at R35.8m.

•All three Divisions contributed to this variance.

•The lower Sales is due mainly to the strong Rand (-R9.4m), lower F2 ,SF6 ,WF6 ,and Siziba sales failed in

the Chemical Divisions, with similar tends in Apogee, Fabritech and Flosep.

• lower levels of Sales are forecast to improve slightly to Year-end, namely 63% of Budget at R154.7m (Budget R246.3m).

• The rate of exchange (ROE) movement accounted for loss of Sales of R22.4m .

• Volume and mix problems are export market related for Pelchem where there is an unhealthy dependence on the semi-conductor industry.

• Volume is the issue for PTS where the domestic market for fixed investment has lost momentum and the PBMR opportunities have not materialised.

lower levels of Sales

HTP: CASH POSITION

• The Net Loss (R23.8m) during the second quarter and an increase in Net Operating Capital (R6.4m) resulted in the Portfolio requiring R28.5m funding (via NECSA internal overdraft).

• The Year-end forecast shows deterioration to R67.4m (Budget –R18.7m) despite the Cash Savings program introduced.

 • Budgeted Capital expenditure of R69.2m has been delayed due

mainly to the unfavourable financial results and cash crises.

PROFITABILITY

• The lower Sales volumes compounded by the unfavourable ROE has directly eroded Gross Profitability and resulted in a Gross Loss of R9.3m (-26% on Sales) during the second quarter: Only PTS achieved a Gross Profit.

 • HTP Overheads exceeded Budget by R1.4m (+17%) due mainly to

the non-achieving of management risk of R1.4m budgeted for. At current Sales levels the Overheads are unaffordable at 26% of Sales (Budget 12%).

 • HTP Net Loss before tax increased by R23.8m (Budget R4.2):

Pelchem –R13.8m, Peldev – --R4.8mPTS –------R2.7m.

• The Year-end forecast shows deterioration to R78.1m, despite the Cash Savings program introduced.

Turnaround strategy

TARGET:Short-term financial viability, including a <R25m cash requirement for the current year-end. To achieve this,

1. restructuring of the business process and organogram is required.

2. capital restructuring will be negotiated with NECSA including the write off of losses to date,

3. a reduction in NECSA overheads allocated and

4. an even more intensive cost-cutting exercise.

Revisit viability of all product, businesses and contracts. Break-even and better 2005+ Budget targets. Corporatisation feasibility Exploitation of Intellectual Property Centralisation of various functions

CURRENT FINANCIAL REPORT

FINANCIAL OVERVIEW FINANCIAL OVERVIEW 2000 – 20032000 – 2003

R’mR’m

20002000 20020011

20022002 20020033

totatotall

1.External sales1.External sales

growthgrowth250250

--307307

+23%+23%301301

-2%-2%356356

+18%+18% +42%+42%

2.Govt Grant2.Govt GrantActivitiesActivitiesD&DD&DSeverance Severance packagespackages

254254

231231

--

2323

194194

166166

1818

1010

161161

142142

1818

11

170170

140140

2020

1010

3.Reduction3.ReductionLoan reductionLoan reductionInterestInterestIAEAIAEA

TOAL GOVT TOAL GOVT GRANTGRANT

--

3333

4545

55

337337

-24%-24%

55

3939

66

244244

-17%-17%

33

3636

--

200200

+6%+6%

233233

3232

--

435435

-33%-33%

Cash flow Situation

and

Organisation Efficiency Measures

The relatively strong RAND, the cut in interest rates, anda general global slump in business

has impacted negatively on our cashflow positionand has resulted in EMC having to take the drasticmeasures all of us have experiencedto curtail non-critical expenditure

WHERE DO WE DO BUSINESS

CLIENT TURNOVER

1 Belgium MR26,1

2 United States MR 8,9

3 Canada MR 6,3

4 Brazil MR 4,4

5 United Kingdom MR 3,9

6 Australia MR 3,2

7 China MR 3,1

8 Turkey MR 3,0

9 Japan MR 2,5

10 South Korea MR 2,4

Total exports for the year to date amounted to MR92,2. (MR4,0 decrease on previous quarter).

Top ten export countries for the quarter

RoE’S Y/E FORECAST AND BUDGETED

FOR THE CURRENT YEAR.

FORECAST BUDGET 

RAND/USD 

7.25 

10.30

 

RAND/EURO 

8.20 

10.20

NECSA FINANCIAL NECSA FINANCIAL PERFORMANCE YTDPERFORMANCE YTD

(2003/9/30) (2003/9/30) (All figures in R Million)(All figures in R Million)

ACTUAL BUDGET VARIANCE

External Sales 151 119 217 442 (66 323)

Operating Expenses 275 446 329 364 78 728

Net Profit (124 327) (111 922) (12 405)

Cash flow Situation and

Organisation Efficiency Measures

The CEO made a presentation to DME on the financial position of Necsa and the actions planned to combat the problem.

This matter is a priority of the EMC. • We must consider all possible actions for cost saving within our Divisions and also any initiatives / projects that can add–value to the organisation

What are doing about it ?

The CEO will be driving a Revenue Diversification Plan for Necsa that will focus on

(a) growing the Rand-based income, and

(b) marketing all Necsa’s capabilities.

Cash flow Situation

and

Organisation Efficiency Measures …cont’d

COMPEITIVE MACRO-ENVIRONMENT

Hedging against the Rand / dollar dilema

Covering our fixed costs in Rand

Broadening our business case

Some of the actions already identified to make the

organisation more profitable and effective are

Reviewing The Business Plans Of Divisions

Identifying areas of savings and productivity

improvement

Effective and Efficient Utilisation of resources

Remove duplication

Redeployment of under utilised staff,

and not necessarily a cut back / retrenchment of staff .

The CEO and Labour will discuss issues

around ways to minimise job losses.

All management systems and procedures must be

interrogated for inefficiencies , eg visitors security

procedure,number of gates open at non-peak times, etc.

In line with Vision 2010 there must be a drive in the organisation to create and identify strategic projects to ensure the long term growth of the organisation .

The CEO will regularly report on the progress of the above organisation efficiency actions

Due to the Knowledge-based nature of our organisation GM’s are required to generate value-adding projects,

 

 

OUR CHALLENGE TO CREATE A FAIR OUR CHALLENGE TO CREATE A FAIR

SOCIETYSOCIETY

As well as doing our business, we will As well as doing our business, we will

harness our skills and competencies harness our skills and competencies

towards contributing to the creation of a towards contributing to the creation of a

fair society through the implementation fair society through the implementation

of equity, skills development, and social of equity, skills development, and social

upliftmentupliftment

EMPLOYMENT EQUITY AT NECSAEMPLOYMENT EQUITY AT NECSA

PRIMARY OBJECTIVES

•To promote equal opportunity and fair treatment in employment through elimination of unfair discrimination

•Implement affirmative action measures to redress the disadvantages in employment experienced

•Ensure equitable representation in all occupational categories and levels

•Ensure compliance with the Employment Equity Act

NECSA PERSONNEL STRENGTH

30 JUNE 200330 JUNE 2003WHITEWHITE BLACKBLACK TOTALTOTAL

PermanentPermanent 874874 598598 14721472ContractContract 1212 3636 4848TotalTotal 886886 634634 15201520

30 SEPTEMBER 200330 SEPTEMBER 2003PermanentPermanent 866866 632632 14981498ContractContract 3333 4242 7575TotalTotal 899899 674674 15731573

PERSONNEL STRENGTH PER GENDER AND RACE

  GENDERGENDER RACERACE

MALEMALE FEMALEFEMALE

PERMANENTPERMANENT %% %% %%

WHITEWHITE 75.075.0 25.025.0 57.757.7

AFRICANAFRICAN 80.380.3 19.719.7 36.836.8

ASIANSASIANS 72.272.2 27.827.8 1.21.2

COLOUREDCOLOURED 65.165.1 34.934.9 4.24.2

TOTALTOTAL 76.576.5 23.523.5 100.0100.0

CONTRACTCONTRACT %% %% %%

WHITEWHITE 93.893.8 6.36.3 42.742.7

AFRICANAFRICAN 86.886.8 13.213.2 50.750.7

ASIANSASIANS -- -- --

COLOUREDCOLOURED 100.0100.0 -- 6.76.7

TOTALTOTAL 90.790.7 9.39.3 100.0100.0

%% %%

ORGANISATIONORGANISATION 77.277.2 22.822.8

AFFIRMATIVE ACTION PURCHASES 2 nd QUARTER M-Rand

41.02

8.2

1

2

BLACK BUSINESS ENTERPRISES

CHALLENGES FOR THE CHALLENGES FOR THE FUTUREFUTURE

1.1. Growth and DevelopmentGrowth and Development Business development to exploit opportunitiesBusiness development to exploit opportunities

PBMRPBMR Sun energy silicon systemsSun energy silicon systems Expansion of radiation based productsExpansion of radiation based products Expansion of Fluorine based chemical productsExpansion of Fluorine based chemical products Contract R&DContract R&D RERTR program—SAFARI-1 conversionRERTR program—SAFARI-1 conversion Green coal Green coal

Corporatisation and growth of HTP and NTPCorporatisation and growth of HTP and NTP Skills development and trainingSkills development and training Improvement of productive application of resourcesImprovement of productive application of resources

2.2. Restructuring and TranformationRestructuring and Tranformation

1.1. Necsa’s PositioningNecsa’s Positioning Alignment to DME Alignment to DME Other DepartmentsOther Departments

2.2. Political Positioning via interaction with Political Positioning via interaction with Parliamentary Portfolio Committee and Parliamentary Portfolio Committee and other entitiesother entities

3.3. FundingFunding Necsa requires approx R 236 million additional Necsa requires approx R 236 million additional

governmental funding over next three years to governmental funding over next three years to address expanded institutional activitiesaddress expanded institutional activities

4.4. Legislative and Policy MattersLegislative and Policy Matters PFMAPFMA King IIKing II Companies ActCompanies Act

5.5. Upgrading of Site SecurityUpgrading of Site Security

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