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South Africa is experiencing disappointing structural growth after the Covid-19 pandemic, due to international and national disasters such as Russia’s invasion in Ukraine, the collapse of local public services and the collapse of Eskom. Severe electricity deficits also disrupted economic activity and affected services and infrastructure such as education and health services and water supply.

According to the World Bank, there were still close to half a million fewer jobs in South Africa at the end of 2022 than at the end of 2019, with poverty at an estimated 63% in 2022 based on the upper-middle-income country poverty line. Socio-economic challenges were further exacerbated by rising fuel and food (bread and cereals) prices, which disproportionately affected the poor. Inflation averaged 6,9% in 2022 but was 8,2% for those at the bottom 20% of the income distribution.

South Africa’s relationship with Russia caused the sentiment of its major trade partners towards the country to sour, which is reflected in the exponential weakening of the rand, especially in the past two months.

Private sector’s burden

It therefore becomes an increasingly difficult task for the public and private sectors to relieve the plight of so many South Africans, of which the population growth is more than 1% per annum and the life expectancy at birth, is increasing.

I am mentioning the private sector specifically, as government increasingly fails the citizens in every respect; and as the private sector is increasingly assuming government’s responsibilities.

The South African dairy industry already bears the brunt of all this, in terms of significantly weaker product sales and lower production of unprocessed milk since after Covid-19, on the back of an ailing economy. It means that dairy industry players are being tested to their limits to offer products that meet regulatory standards against reasonable prices.

Read more about the winning South African Dairy Product of the Year.

Positioning of industry organisations

This also means that the role of industry organisations such as Milk SA, community organisations and the like have become increasingly relevant, and that they must increasingly position themselves as partners – and in some instances extensions – of government for the optimal benefit of the people of South Africa.

For many years already, Milk South Africa and its projects have increasingly aligned themselves with all relevant public sector structures, which is reinforced through regular personal interaction and mutual understanding. Strategic alliances with other industries and government such as through the National Animal Health Forum and the Agricultural Trade Forum has also proven to render optimal results. Milk SA has also played leading roles in government-initiated forums such as the Agricultural and Agro-processing Master Plan.

Milk SA’s projects impress

The activities and projects of Milk SA serve the collective interest of industry role-players and are essentially aimed at increasing the industry’s competitiveness. The board of directors of Milk SA approved all the reports and commended the projects on their excellent performance.

The advisory committees and other structures gave the necessary guidance and ensured that the projects deliver on their mandates.

The relevance and impact of these projects in the dairy industry are overwhelming, as described in the report of the board of directors.

Milk SA’s finances and administration sound and solid

The company is proud to announce that it was handed another clean audit report by its external auditors, who are designated by the auditor-general. Although income was slightly less than budget in 2022, Milk SA could finance all its activities and retained sufficient operational funds, while excellent debt management was reported.

The board of directors considered and approved reports from the project advisory committees, audit and risk Committee, ministerial inspector, internal auditor, external auditor, the CEO, statutory measures committee, executive committee and human resources committee.

The Board has focused a great deal more on risk management in the past year, with emphasis on risks facing the dairy industry. As Milk SA celebrates its 20th anniversary this year, the board also emphasised the importance of institutional knowledge among the directors and members of Milk SA, and the risk of failure in this regard.

A word of thanks

It has been a privilege to lead the board of directors for another year of sound and professional interaction at board level and having dealt with all matters aptly and efficiently. The dairy industry can rest assured that the administration and other business of Milk SA are well-managed and overseen.

I wish to thank every director for their attention to every detail of the sizeable board packs and their loyalty and commitment to this organization, its projects and other activities.

A word of thanks goes also to the staff of Milk SA for their meticulous handling of the administration of Milk SA, and to the project managers for their continued hard work and success stories. – Dr Bonile Jack-Pama, chairperson’s report, Milk SA