Onderstepoort Biological Products (OBP), the state-owned manufacturer of animal medicines and vaccines, achieved only 62% of its targets in the past financial year and recorded a revenue deficit of R100 million.

Deur Nico van Burick, senior journalist at African Farming and Landbouweekblad

Onderstepoort Biological Products, which recently met with Parliament’s Portfolio Committee on Agriculture to report on its performance, informed the committee that its profit had declined from R231 million in the previous financial year to R186 million in 2024/25, while vaccine production dropped by 24%.

OBP once again received a qualified audit opinion with four unresolved findings, and continues to have vacant key positions, including those of chief executive officer and chief financial officer. The portfolio committee expressed serious concern about the loss of income, the qualified audit and the ongoing vacancies in key leadership positions.

OBP attributed its financial difficulties and lower vaccine production partly to packaging problems, a shortage of diluent (solution material) and freeze dryers that were not yet fully operational. The committee questioned these explanations and called for stronger management, tighter internal controls and compliance with public financial management legislation.

Performance Targets: Some Progress, Many Still Unmet

In response, OBP stated that the recruitment processes for a CEO and CFO were under way, and that newly installed freeze dryers were expected to be operational by the end of the year.

Interim CEO Dr Jacob Modumo said the freeze dryers should be fully functional by March next year. This will also make it possible to start using an automatic packaging machine that was bought in 2018/19, as production volumes will for the first time be high enough to justify its use. He said these upgrades would significantly increase production and reduce costs.

According to Dr Modumo, OBP set itself 21 performance targets for the financial year, of which 13 had been achieved and eight still needed to be met. Among the targets not yet achieved were increased income from product sales, higher sales of the company’s 20 main vaccines, the registration of three new products, and facility improvements to enable certification for Good Manufacturing Practice.

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Among the targets that have been achieved are improved client satisfaction, a higher number of resolved client complaints, retention of OBP’s top 20 clients and an expansion of distribution channels.

Willie Aucamp, a DA member of the portfolio committee, said the greatest concern was the expected shortfall in revenue – about a third of projected income that will not materialise.

He said the presentation marked the first time he had heard of a packaging problem. “To attribute a R100 million loss in revenue to a packaging problem is problematic. OBP needs to determine the source and root causes and find solutions.”

During a visit to OBP in October 2024, he said, there was no indication of a packaging problem, nor was it mentioned in discussions with the portfolio committee earlier this year. Clarity on this issue is urgently needed.

Aucamp also noted that infrastructure and the retention of skills were among the biggest challenges at OBP. “If the freeze dryers are operational, it will make a huge contribution to vaccine manufacturing capacity. If they are operational, OBP will have the largest vaccine capacity in Africa.”

He added that the availability of water was also a concern. The boiler system requires a constant supply of water, and OBP currently relies on water tanks and external service providers, although the Department of Agriculture was assisting with the installation of a borehole to ensure a consistent water supply.

Aucamp believes there is light at the end of the tunnel, noting an improvement in overall performance from 53% in the previous financial year to 62% in 2024/25. This is the first time in five years that performance has exceeded 60%. Regarding vaccine availability, there has been a net increase in the supply of key vaccines since the fourth quarter.

Call for Urgent Reform and Competent Leadership

The Southern African Agri Initiative (Saai) said in response to the annual report that it confirmed the collapse of South Africa’s state-owned vaccine manufacturer. According to Saai, this is not merely due to administrative challenges – it also means fewer vaccines, weaker disease control, and greater losses for farmers already struggling with the ongoing foot-and-mouth disease crisis.

Saai criticised the fact that essential equipment bought as far back as 2018 had never been used. The organisation called for the immediate appointment of competent leadership, an independent investigation into the entity’s operations and production capacity, and serious consideration of public–private partnerships or partial privatisation to restore efficiency and accountability.

Saai added that it would continue working with parliament, the auditor-general and agricultural partners to demand urgent reforms that can restore vaccine security and protect the livelihoods of South African farmers.