Government Printing Works GPW 200708 Strategic Plan Portfolio

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

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

The Strategic Blueprint

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

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

Four Pillars of Success

Long-Term Shareholder Value

Government Printing Works MARKETING q. Maintain and grow the current product mix o Security printing o Standard printing o Publications q. Grow security printing into Africa q. Restore and maintain customer confidence

Defining value in Customer Terms

Strategic Initiatives to Drive Customer value

Internal Business Process

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

Government Printing Works IMPORTANCE OF R&D STRATEGY q Advantages of Research and Development ü Scoping new products (experimental research) ü Development – proof of concept, testing, ideal levels & delivery ü Manufacturing new technologies ü Increase investment – economic impact (+/-3. 5% of revenue) ü Forensics

Understand our People Requirements

Financial Projections

Government Printing Works Financial Projections - Assumptions q 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) q Growth in Sales unaffected by loss of exclusive rights as per draft Security Printers Bill in year 3 q 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 q Salaries as 16% of Revenue (in line with industry benchmark) q Marketing Costs as 2% of Revenue q New Passport production equipment requires OPEX budget of R 30 million per year q CAPEX of R 340 million spread over 5 years

Government Printing Works Financial Projections - Assumptions q Impact on GPW of business integration of current Passport Assembly Personalization process at DHA from a people and process perspective – discussions proposed for alignment q 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 q 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 DIVISION Revenue Profit Margins % Origin 17 621 681 839 128 5% Letterpress 22 414 042 1 067 335 5% 7 111 410 (660 623) -8% Book Binding 10 665 458 (678 751) -6% Form Binding 26 937 141 657 003 2% Po. D Section 11 190 374 978 484 10% Security Binding 37 571 636 7 884 555 27% 2 361 910 525 991 29% 135 873 653 10 613 123 8% Litho Rubber Stamp SUB TOTAL

Government Printing Works Revenue Budget 2007/08 DIVISION Revenue Profit Margins % Contract Printing 95 000 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 0 0% 143 331 453 5 733 258 4% 0 0 0% 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% Stationery Stores Publications Government Gazettes

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

Government Printing Works THANK YOU