REPORT TO MINERALS AND ENERGY
4 NOVEMBER 2005
Schalk de Waal: Interim CEO
Ms Nomfuyo Galeni: CFO
ACKNOWLEDGEMENT – ANNUAL REPORT 2004/05
• Mr Senti Thobejane was the Chief Executive
Officer during the reporting period. He resigned
on 31 March 2005.
• The CFO of Necsa, Ms Nomfuyo Galeni was the
Acting CEO from 1 April 2005 until 24 October
• [PMG note: graphic not included, please email@example.com]
Vision and Mission
• Necsa’s long term growth strategy, Vision 2010,
seeks “to pursue nuclear technology excellence for
sustained social and economic development”.
• Its mission is to develop, utilize and manage nuclear
technology for national and regional socio-economic
• Values that are strived for:
- Life enhancement
- Leadership; and
• Necsa has to position itself to be a serious player in nuclear
matters in terms of:
- active involvement in the international nuclear arena.
- establishing Necsa as a recognized centre of excellence
in nuclear technology and related fields.
- becoming a major contributor towards the national
agenda of developing people of South Africa.
HIGHLIGHTS AND CHALLENGES
• SAFARI-1 reactor achieved 40 years of safe and successful
• Necsa continued to experience a negative impact from the
strengthening of the rand which resulted in net operating loss of
• To reverse the financial challenge, a Recovery Plan was launched
in consultation with labour.
• Reduced discretionary spending through the implementation of
strict austerity measures.
• Necsa experts continued to play a pivotal role in the International
Atomic Energy Agency/African Regional Co-operative Agreement
for Research, Development and Training Related to Nuclear
Science and Technology collaborative research, development and
CHAIRMAN’S REPORT: LOOKING AHEAD
• Need to empower and re-organize Board of
• Board intends to take SA’s nuclear science and
technology to new highs of development and
• Necsa to be established as a centre of excellence
• Necsa needs additional funding support to:
- remove balance sheet encumbarances
- recapitalise and turn Necsa around
MANAGEMENT REPORT: HIGHLIGHTS
• Necsa experienced a turbulent time during
2004/05 but maintained its positive image and
• Management and staff remained committed to
safe and secured nuclear operations.
• Group revenue increased by 2,2% from previous
• Made good progress to curb the escalating cost
of post-retirement medical aid liability.
• Success in improving gender equity quota
- woman now 23% in 3 critical categories
MANAGEMENT REPORT: HIGHLIGHTS
• A woman was appointed as CFO of Necsa and acted as CEO
from April to October 2005.
• Target that 40% of workforce will be women by 2010.
• Provide products regularly and reliably to 50 countries
mainly through NTP Radioisotopes (Pty) Ltd (a fully Necsa
• Implemented a staff retention strategy to protect core skills.
• Necsa has numerous collaborative research projects
with the high education sector including universities and
• Necsa engaged in various awareness and public relations
programmes to educate stakeholders on nuclear matters.
(SA FUNDAMENTAL ATOMIC REACTOR INSTALLATION)
• SAFARI-1 is the mainstay of Necsa’s nuclear programme and will
render at least a further 20 years service to the country.
• Research reactor also utilized for production of medical
radioisotopes mainly during last 10 years.
• Annually ~60 000 SA and 2,3 million patients across the world
benefit from isotopes originating from SAFARI-1.
• Experimental beam line facilities are used extensively for
research and training.
• ISO9001 and ISO14001 accredited (this is an exceptional
achievement which only a few reactors in the world received)
• SAFARI-1 currently one of most efficiently operated and best
utilized reactors in the world.
• The Government has approved that the reactor be converted to
utilize low enriched uranium together with dedicated funding for
this purpose (R12m/a for 3 years).
PRODUCTS AND SERVICES
Major products and services:
• Radiopharmaceuticals used in nuclear medicine
• Radiochemicals used for medical and agricultural purposes
• Radioactive sources used in industry
• Irradiation services and radiation technology products
• Fluorine-based chemical products and services
• Specialised engineering products and services
• Operation of SAFARI-1 nuclear reactor
• Management of the institutional obligations on behalf of the State such as
decommissioning, decontamination, storage and disposal of radioactive waste
• Management of the State’s programme of safeguarding nuclear material to prevent
proliferation of nuclear weapons
• Provision of a support structure for African Regional Co-operative Agreement for
Research, Development and Training
• Development of nuclear fuel production technology for PBMR
• Radiation and reactor theory; research and services to Necsa and the PBMR
• Radiochemistry and radioanalytical services for Necsa
• Utilisation of existing infrastructure and buildings
• Research collaboration with SA and international universities and research
ECONOMIC PERFORMANCE INDICATORS
• Approximately 14,8 per cent suppliers listed as black suppliers
• 33% of Necsa’s budget was spent on black suppliers
• 42% of Necsa’s expenditure comprised personnel expenses
• 69,6% of our workforce comprises designated employees
• Due to a moratorium on appointments, we lost 235 employees
who was replaced with 168 new appointees
• Strong alliance with the Chemical Industries’ Education and
Training Authority SETA.
• About 70 learnerships were trained in various occupations such
as engineering, chemistry, apprenticeships.
• Though the Necsa bursary scheme, 24 previous disadvantaged
students are being sponsored for their studies in science and
• A total of 1409 employees received training, some of whom
attend more than one course in various disciplines, including
leadership development, health and safety and technical training.
• ARECSA is a joint venture between five SA companies, namely,
Eskom, Necsa, PBMR, NNR, Koeberg and Areva (France) for the
training of especially previously disadvantaged individuals in the
much sought-after nuclear and related skills.
Necsa: CURRENT SITUATION
• Deficit recorded for 2004/05 – R29,8m - cumulative R95,6m
• Vacancy of key personnel - 183
• Austerity measures due to cash constraints
• HSE & security risk profile deteriorated
• Management systems inadequate
• Declining market conditions
• Economy of scale problems and operational inefficiencies
• Volatility of exchange rates
• Limited funding of institutional obligations by shareholder
LOOKING TO THE FUTURE
• Necsa received an additional allocation of R56m for the
current year to implement urgent HSE-related projects and
to meet its commitments.
• Possible DST financial support for specific R&D projects.
• Additional funding envisaged from 2006/07 financial year
• Turnaround Plan submitted to Government.
Projects to focus on:
Nuclear technology R&D expansion and
Restructuring and recapitalisation of
Human capital development programmes.
Infrastructure and HSE upgrading.
High Temperature Reactor/PBMR Advance Fuel
Necsa TURNAROUND PROGRAMME
• The Turnaround Plan to run over 5 years.
• Necsa will prioritise projects within available funding
• The plan will be aimed at the renewal of Necsa to take
advantage of the re-emerging nuclear market.
• The plan will require significant commitment from
Necsa, the Board and Government.
• Necsa is confident that the implementation of the plan
will yield the desired results to ensure that Necsa could
fulfill its mandate and be looked upon as a centre of
excellence for the nuclear industry.