Saai calls for privatisation of Onderstepoort Biological Products

Saai is calling on the Government of National Unity to privatise Onderstepoort Biological Products (OBP). OBP is a wholly state-owned animal health and vaccine manufacturing company, but its lack of efficiency and competitiveness is crippling certain sectors of South Africa’s livestock industry.

For more than two decades, OBP has no longer been the centre of excellence that once added immeasurable value to the livestock industry. Outdated ideology, race-driven appointments, power struggles and petty party-political considerations have displaced science, while research, service delivery and even basic maintenance have suffered as a result.

OBP has become to animal health what the Post Office became to communications and parcel delivery, what Denel became to the defence industry, and what state hospitals have become to public healthcare – and for much the same reasons. A privatised OBP could once again appoint top scientists on the basis of their qualifications, expertise, abilities and proven track records rather than political compliance. It could attract capital that is invested in infrastructure, equipment and research rather than disappearing without explanation, and it could once again become an asset to farmers rather than an obstacle.

As far back as 2007, veterinarians and scientists warned that OBP had deteriorated to such an extent that it could no longer fulfil its purpose and functions. As an institution, it was no longer able to perform its role in accordance with the applicable legislation and regulations. In response, Parliament allocated R480 million to maintain and upgrade OBP.

That money disappeared. Its whereabouts remain unknown. OBP’s upgrading and maintenance stalled. No manager or director was held accountable.

By 2013, it had already become apparent that OBP was failing in its mission and responsibilities towards South African farmers and was letting the agricultural sector down. One after another, vaccine production programmes fell behind or ground to a halt.

Of the 24 most important livestock vaccines distributed by OBP, it supplies only approximately 40% of market demand.

Horse owners are legally required to vaccinate their animals against African horse sickness every year, yet OBP has for years been unable to manufacture sufficient quantities of the vaccine. This week, following urgent orders, OBP distributed African horse sickness vaccine that had already expired, and no veterinarian is prepared to sign off on it. The equine industry is at the mercy of OBP’s inability to deliver, with no alternative available.

Nothing has highlighted OBP’s decline and redundancy more starkly than the current foot-and-mouth disease (FMD) outbreak. OBP did not have sufficient vaccine stocks to contain the outbreak in its early stages, nor was it capable of manufacturing the required quantities. To this day, it cannot manufacture more than 20,000 doses per month. That amounts to just 0.5% of our annual requirement.

Under intense pressure from the industry, the local virus strains were sent to the Pirbright reference laboratory in England nine months late, ostensibly because OBP wanted to protect South Africa’s intellectual property rights relating to FMD vaccines. What use are intellectual property rights to South African farmers if we no longer have a cattle industry? Those nine lost months have cost the red meat and dairy industries billions of rand.

The state should immediately contract out to the private sector the right to manufacture OBP’s vaccines on a large scale. The private sector can supply these vaccines to livestock farmers more cheaply, quickly and efficiently.

In January 2025, through what Saai regards as heavy-handed intimidation, OBP took over the local agency for the importation of Biogénesis Bagó vaccine from Argentina from Centurion-based Design Biologix. Since then, all imported vaccines – including those from Türkiye – were channelled through OBP, effectively creating a state monopoly. Saai, Sakeliga and Free State Agriculture challenged this arrangement in court and succeeded.

During settlement negotiations before the interim court order was made final, Minister Willie Aucamp took a firm position that the state would retain no exclusive rights over the importation, distribution or administration of vaccines and would not profit from the crisis. OBP was a party to both the litigation and the settlement and agreed with the Minister’s position. In any event, OBP added no meaningful value to the process, failed to exercise proper control over it – with questions remaining about what happened to approximately six million doses, for which no satisfactory answers have yet been provided – and, at most, added cost and delays to the handling of the vaccines.

This followed months of confusion and an intense dispute over the price at which OBP supplied vaccines to the state, the Department of Agriculture and provincial governments. The figures ranged from R71 per dose to R300 per large stock unit per year for two vaccinations. Although industry organisations and service providers raised no objections, the issue caused considerable tension between Saai and then Minister John Steenhuisen, who dismissed questions about the pricing as “disinformation” and mischief-making.

The precautionary suspension of Dr Jacob Madumo, Chief Executive Officer of OBP, over alleged price manipulation and unlawful profiteering therefore comes as no surprise and has been widely welcomed by farmers. A thorough investigation must now follow into the prices charged in intra-state transactions, the prices invoiced by OBP for the Biogénesis vaccine, and the structuring of beneficiaries who may have profited from these transactions. Where it is established that OBP made undisclosed or improper profits, those funds should be recovered and paid into a fund from which the financial burden of FMD on farmers can be alleviated.

For years, OBP has been more of a liability than a solution. Fixing it will take many years and billions of rand – resources that South Africa and its livestock farmers simply do not have.

For this reason, Saai is calling for OBP to be privatised.

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