Agri-industry alarmed by Onderstepoort Biological Products’ performance, challenges

The Southern African Agri Initiative (Saai) has raised serious concerns about the performance of Onderstepoort Biological Products (OBP), following the release of its 2024/25 Annual Performance Report, which the organisation says signals a “collapse” of the State-owned vaccine producer.

According to Saai on Monday, the report — presented before the Portfolio Committee on Agriculture — shows that OBP achieved only 62% of its performance targets, missed R100 million in revenue, and again received a qualified audit opinion with four unresolved findings.

Profit reportedly declined from R231m in 2023/24 to R186m in 2024/25, while vaccine production dropped by 24%.

Francois Rossouw, CEO of Saai, said these figures reflect a deepening crisis rather than isolated administrative problems.

Rossouw said these are not accounting errors or administrative issues – they translate directly into fewer vaccines, weaker disease control, and more livestock losses for farmers already under pressure from the ongoing Foot and Mouth Disease (FMD) crisis.

“For more than a decade, OBP has been crippled by weak governance, outdated infrastructure, and leadership instability," he said.

"The entity still has no permanent CEO or CFO, remains without Good Manufacturing Practice (GMP) certification, and continues to waste money on mismanaged contracts while critical equipment purchased in 2018 has yet to be used.”

Rossouw said the State’s inability to produce and distribute essential vaccines has left rural economies vulnerable and export bans in place, costing the agricultural sector billions.

"It is unacceptable that the Department of Agriculture (DoA) continues to shield OBP from accountability while South Africa’s livestock industry collapses under preventable disease outbreaks.”

Saai is thus calling for the urgent appointment of competent leadership at OBP, an independent review of its operations, and the consideration of public–private partnerships or partial privatisation to restore efficiency.

The organisation also urged Parliament to launch an inquiry into the Department of Agriculture’s (DoA) oversight of OBP and its repeated audit failures.

However, the Department of Agriculture has rejected SAAI’s claims, calling them “incorrect and misleading.” The Department said OBP’s overall performance actually improved, rising from 53% in the 2023/24 financial year to 62% in 2024/25 — the highest in five years.

The department said this is the first time in five years that the OBP has achieved performance above 60%, adding that the qualified audit outcome needs to be noted that there has been some improvement.

“The entity has resolved four of the seven qualification findings in the 2024/25 financial year, which had been previously raised by the Auditor General South Africa in the 2023/24 financial year. The OBP is working tirelessly to resolve the remaining findings,” it said.

The department further clarified that OBP does not manufacture Foot and Mouth Disease vaccines, which fall under the mandate of the Agricultural Research Council (ARC).

“Vaccine production did not drop by 24%. Quite to the contrary, for the year under review, the OBP achieved 93.79% production efficiency against the target of 85%," it said.

"The assertion that there are fewer vaccines is far from the truth. The OBP has reported a net increase in product availability across major key product lines consistently since the 4th quarter until to date.”

According to the department, Minister John Steenhuisen has instructed OBP to prioritise financial sustainability, strengthen monitoring of cost escalation, improve procurement compliance, and enforce strict controls to eliminate irregular expenditure.

"Particular focus should also be placed on mitigating critical skills risks through targeted recruitment and retention measures,” it said.

Meanwhile, Steenhuisen said he has also requested both the board and executive management to give an update within the next quarter, outlining how OBP intends to address these challenges.

“The department stands ready to support OBP within its mandate, but accountability for delivery remains with the board and management,” he said.

BUSINESS REPORT