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Necsa group corporate plan (2011/12 - 2013/14). Parliament Portfolio Committee on Energy. By: Rob Adam Necsa CEO. 24 June 2011. Index. Necsa’s Achievements Nuclear Power Cluster Radiation Science and Application Cluster Necsa as Host of Nuclear Programmes Cluster - PowerPoint PPT Presentation
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NECSA GROUP CORPORATE PLAN (2011/12 - 2013/14)
By:
Rob Adam
Necsa CEO
24 June 2011
Parliament Portfolio Committee on Energy
Index
2
1. Necsa’s Achievements
2. Nuclear Power Cluster
3. Radiation Science and Application Cluster
4. Necsa as Host of Nuclear Programmes Cluster
5. Key Risk for Necsa Group
6. Key Performance Indicators
7. Budget Assumptions
8. Government Grant Budget 2012
9. Government Grant Reduction
10. Necsa Group Revenue 2011/12
11. Necsa Group Expenditure 2011/12
Index
3
11. Necsa Group Capital Expenditure Plan
12. Necsa Corporation Revenue 2011/12
13. Necsa Corporation Expenditure 2011/12
14. Necsa Corporation Government, Grants vs. Personnel Costs
Continues…
Necsa’s Achievements in 2010 - 2011
5
• Necsa Group revenues from products and services reach R1,17 billion,
approximately 15% up from last year.
• NTP Radioisotopes (Pty) Ltd, the SAFARI-1 Reactor and the Necsa
MTR Fuel department combined forces to successfully address the
global medical radioisotopes supply crisis during the period 2009-2010.
In doing so the NTP Group achieved record sales and became the world
leader in the supply of medical isotopes for quite some time until the
Canadian NRU reactor was returned to operation.
• The Nuclear Skills Development Centre was established successfully,
received accreditation from three SETAs and also recognition as a
Decentralised Trade Test Centre to do the final trade testing of
apprentices.
Necsa’s Achievements
6
• The successful conversion of the SAFARI-1 reactor to low enriched uranium
(LEU) fuel, together with the irradiation of LEU target plates for Molybdenum-
99 production, saw NTP becoming the only company in the world with the
proven ability to produce Mo-99 on a commercial scale using a fully LEU
process. A project for the establishment of LEU silicide fuel fabrication and
LEU target plate manufacturing facilities are well on track.
• The Necsa Visitor Centre, as the first phase of the envisaged Nuclear
Science Centre, was successfully completed and opened to the public.
• Necsa is one of the first Corporations in Africa to obtain the American Society
for Mechanical Engineers (ASME) certificate. We are now in a position to
manufacture any class 1 (NB) class 2 (NC) or class 3 (ND) AMSE III
components without any design responsibilities.
Necsa’s Achievements
Continues…
7
• A comprehensive set of feasibility studies relating to the re-
establishment of nuclear fuel cycle programmes in South Africa was
completed. In the process Necsa developed excellent relationships with
all major international suppliers of fuel cycle technologies and products,
which will be of great importance during the implementation of the
Nuclear Energy Policy. The project to establish development and test
facilities for uranium enrichment technologies are on track.
• Necsa enhanced its SHEQ System by adopting and including all the
quality management system requirements of the National Nuclear
Regulator as prescribed in RD-0034: Quality and Safety Management
Requirements for Nuclear Installations.
Necsa’s Achievements
Continues…
8
• Necsa contributed to a range of policy making and public participation
processes relating to the energy planning, nuclear energy R&D and related
topics, and maintained participation in national and international collaborative
programmes in the field of nuclear R&D and Generation IV nuclear energy
systems.
• For the first time since 1963, Necsa has reached the point where we can
dispose low level radioactive waste that complies fully with the Vaalputs
Waste Acceptance Criteria. The first shipment of Necsa low level radioactive
waste was recently transported to the National Radioactive Waste Disposal
Facility at Vaalputs in the Northern Cape Province.
• The Necsa Group continued to receive unqualified audit reports from the
Auditor General
Necsa’s Achievements
Continues…
9
Transport Truck at the Vaalputs Disposal Site
Necsa’s Achievements
10
Transport Truck at the Vaalputs Disposal Site
Necsa’s Achievements
Corporate Plan
2011 - 2013
Nuclear Power Cluster• Long Term Objective: To expand and industrialise Necsa’s nuclear
and related technologies to, amongst others, establish NFC
capabilities and plants and to ensure self-sufficiency of nuclear fuel
cycle activities for the RSA.
• Nuclear power cluster comprises:
– Uranium Beneficiation;
– MTR fuel and target plate production;
– PWR fuel programme;
– Nuclear Manufacturing;
– Components of Applied Chemistry; and
– Pelchem (Pty) Ltd.
12
Nuclear Power Cluster
• Medium-Term Objectives include:
– To progress with preparations for the development or demonstration
of required nuclear fuel cycle processes and technologies
– To achieve the necessary project targets for establishment of MTR
and PWR fuel fabrication capabilities
– To increase nuclear manufacturing sales from current R52m to
R98m by 2013/14
– To diversify Pelchem’s product portfolio and increase current sales
of R169m to R232m by 2013/14
13
Continues…
Radiation Science and Applications Cluster• Long term Objectives:
– Radiation Sciences R&D outputs: To grow outputs of new technology,
products and services in alignment with applicable national priorities and
imperatives in science and technology; and to drive Necsa’s commercial
growth objectives.
– Reactor utilisation: To optimally utilise the SAFARI-1 reactor for isotope
production and research purposes by ensuring reliability and availability;
and to plan for the eventual replacement of the reactor and/or the
establishment of an additional neutron source for research and
production.
– Revenue growth: To maintain Necsa/NTP’s dominant status in the global
radioisotope market and further grow its market share.
14
• This cluster comprises of:
– Radiation Science and components of Applied Chemistry
– SAFARI-1
– NTP Radioisotopes
• Medium-Term Objectives include:
– To increase Necsa’s research, development and innovation outputs
– To maintain the full operational capability of SAFARI-1 and to progress
with studies on future irradiation facilities
– To grow NTP Group current year sales of R851m by 47.5% to R1,255m
by 2013/14
15
Radiation Science and Applications Cluster
Continues…
Necsa as Host of Nuclear Programmes Cluster• Long Term Objective: To continuously strengthen Necsa’s ability to
host nuclear programmes, through the nuclear compliance portfolio
of functions and support services including human resource
management, financial management and site and infrastructure
services.
• This cluster comprises of:
– Licensing
– Nuclear safeguards management
– SHEQ
– Security
– Technical Services
16
– Human Resources
– Finance and Information Management
– Strategy and Performance
– Marketing and Communication
• Medium-Term Objectives include:
– To constantly improve SHEQ management performance
– To increase the percentage of black technical staff and black
professionals
– To maintain investment in training of staff
17
Necsa as Host of Nuclear Programmes Cluster
Continues…
Key Risks for the Necsa Group• Key Risks for the Necsa Group
– Financial resource constraints, including misalignment of funding
required to deliver timeously on the role Necsa has to play in terms of
the NEP and challenging market conditions;
– Shortage of appropriately skilled staff to execute and expand Necsa’s
core technical programmes;
– Ageing equipment (particularly the SAFARI-1 reactor) and
infrastructure as well as production plant availability;
– Business sustainability (particularly of Pelchem); and
– Lack of public awareness and knowledge of nuclear technologies.
– Fragmented nuclear industry.
18
Key Risks for the Necsa Group
• It should be noted that the reducing trend of the Government grant
allocated to Necsa over the past two MTEF budget processes,
together with more challenging market conditions for its commercial
subsidiaries, place Necsa at risk of not fulfilling its core legislative and
policy mandate.
• It is also pertinent to highlight here that although the NTP Group has
produced excellent results in the recent past, that its markets are
likely to stabilise going forward and that its envisaged Dedicated
Isotopes Production Reactor (DIPR) project will require significant
contributions from its reserves until around 2021/22.
19
Continues…
Key Performance Indicators
20
Output KPA KPI 2010/11 Actual 2011/12 Target 2012/13 Target 2013/14 Target1. Necsa Group
annual incomeAnnual % growth in Group income
19.90% 11.60% 14% 6.30%
2. Necsa corporate core grant
Annual % growth in core grant
6.70% 5% 5% 5%
3. Necsa Group other grant income
Annual % growth in other grant income
10.40% 109% 127% (33.2)%
4. Refereed research publications
Number of refereed research publications
17 22 28 32
5. Innovation value chain
Number of innovation disclosures
31 10 12 14
Number of priority patent applications
1 3 4 6
Number of PCT or equivalent applications
4 3 3 4
Number of granted international patents
12 12 15 8
6. Nuclear fuel cycle (PWR) programme implementation
Achievement of strategic project objectives
Concept design for NFC development
facilities completed and included in various
study reports
• Necsa approved as supplier of PWR fuel components • Techno-economic study for
U from Usi completed
• Stage 1 of U-plant refurbishment
commissioned
• Basic design for U recovery from Mo production residue
and U from Usi submitted to NNR
Procurement and construction
of U from Usi facility
Key Performance Indicators
21
Output KPA KPI 2010/11 Actual 2011/12 Target 2012/13 Target 2013/14 Target
7. Black technical professionalsBlack technical professionals as a % of all technical professional staff
29% 30% 31% 32.60%
8. Investment in trainingInvestment in training as % of staff budget
8% 7.60% 7.80% 8%
9. Public dose impact of annual releases and events
Reduction in releases (3-year moving average)
9µSv 6.3µSv 6.3µSv 5.8µSv
10. Unqualified audit: Compliance to GAAP accounting, auditing and PFMA requirements
Number of annual report qualifications
0 0 0 0
11. National key point reportable security incidents
No NKP events 0 0 0 0
12. Marketing and communication programmes to stimulate public awareness on nuclear energy (ito NEP policy principle 14)
Improve public perceptions of nuclear technologies as measured by the social development component of the Emex rating
15 points 15 points 15 points 15 points
Promote and grow the Necsa brand as measured by the MSA rating
62% 60% 62% 64%
Advertising volume equivalent
R15.8 million R25.7 million R35.4 million
Continues…
Budget AssumptionsInflation 2012 2013 2014 2015
Projected CPI 5.2% 6.0% 5.7% 5.7%
Projected PPI 6.2% 6.9% 6.5% 6.5%
2012 2013 2014 2015
Salary increases Necsa 0.0% 0.0% 0.0% 0.0%
Salary increases SAFARI1
6.0% 5.7% 5.7% 5.7%
Exchange Rates 2012 2013 2014 2015
R R R R
1 American Dollar / Rand 7.13 7.85 8.50 8.96
1 British Pound / Rand 11.22 12.41 13.48 14.25
1 European Dollar / Rand 9.10 9.67 10.41 10.93
22
Government Grant Budget 2012 (Excl. VAT)
23
ACTUAL BUDGET PLAN PLAN PLAN
2011 2012 2013 2014 2015
ACTIVITIES 416.2 431.3 422.0 407.8 428.1
SECURITY SERVICES 8.2 8.4 8.2 7.9 8.3
LEU Conversion 11.0 11.1 10.9 10.5 11.0
D & D 68.2 63.2 61.9 59.8 62.8
TOTAL 503.6 514.0 503.0 486.0 510.2
Baseline Budget 2011 Nov. 2009 503.6 528.0 517.3 548.4 575.8
Reduction (R) - (14.0) (14.3) (62.4) (65.6)
Reduction % 0.0% -2.7% -2.8% -11.4% -11.4%
Government Grant Reduction Budget 2010 to Budget 2012
24
2011 2012 2013 2014 2015 TOTAL
Baseline Budget 2010 Nov. 2008 522.3
550.9
584.0
619.1
650.1 2,926.4
Baseline Budget 2012 Feb. 2011 503.6
514.0
503.0
486.0
510.2 2,516.8
Reduction (R) (18.7)
(36.9)
(81.0)
(133.1)
(139.9)
(409.6)
Reduction % -3.6% -6.7% -13.9% -21.5% -21.5% -14.0%
NECSA Group Revenue 2011/12
25
NECSA Group Expenditure 2011/12
26
Necsa Group Capital Expenditure Plan
27
Budget Plan Plan Plan
2012 2013 2014 2015
R’000 R’000 R’000 R’000
Land & Buildings 26 712 9 502 1 860 592
Plant 125 338 241 627 340 995 166 384
Furniture & Fittings 770 591 586 631
Motor Vehicles and Transport Containers
8 019 1 647 1 232 180
IT Equipment 7 110 3 573 2 509 3 032
Machinery and Equipment
72 518 56 524 60 242 60 217
Component Spares 2 282 2 779 1 288 1 372
Total 242 749 316 243 408 712 232 408
NECSA Corporation Revenue 2011/12
28
NECSA Corporation Expenditure 2011/12
29
NECSA Corporation Government Grant vs. Personnel Cost
30
31Thank You!!!