The South African Bureau of Standards (SABS), faced with insurmountable financial and operational shortcomings, is looking to rope in the private sector to turn around its fortunes.
The entity, which is the custodian of the country’s quality standards systems, has had a horrid eight years since being put under administration in 2018. It has not had a permanent CEO since then, despite getting out of administration in 2022.
In the clearest yet indication that the SABS — which is critical for local businesses to maintain the standards needed to compete in domestic and global markets — has run out of options to stay afloat, it has reached out to the private sector to assist it with developing a self-help plan by September.
Consultants will review the financial performance, revenue streams and cost structures of the state-owned entity and evaluate its organisational structure, governance and decision-making processes and then recommend corrective measures.
The turnaround plan will be expected to reimagine the SABS and assess the role of strategic local and international partnerships to enhance efficiency, innovation and market relevance in a bid to retain the market trust in the “SABS Approved” label.
In a frank assessment, the entity, in its tender document, admits that despite its strategic importance to the economy and its potential to serve as a key enabler of quality industrial development and trade, it is currently operating at “below optimal performance”.
The SABS has embarked on the development of a comprehensive business case to fundamentally transform the organisation into a high-performing, self-sustaining and globally competitive entity
— SABS tender document
“SABS is challenged by operational inefficiencies, constrained capabilities and an organisational culture that limits its ability to compete effectively with leading global and private-sector counterparts,” the document reads.
“In its current state, the organisation is not financially sustainable, with significant losses projected in the absence of continued fiscal support. Recognising this urgency, the SABS has embarked on the development of a comprehensive business case to fundamentally transform the organisation into a high-performing, self-sustaining and globally competitive entity.”
“The business case must articulate the strategic, operational and financial pathway required to achieve this transformation, including the identification of critical capability gaps; enabling support functions such as technology, laboratory infrastructure and specialised skills; as well as the exploration of optimal operating models.”
The consultants will also be expected to develop a “clear pathway” to reduced grant dependence, financial sustainability and profitability, and develop a financial baseline (current revenue, costs and funding structure) and an estimation of investment requirements encompassing technology, laboratories, skills and transformation initiatives.
“The objective of the consultants is to guide and facilitate the development of a business case that will transform SABS into a significant, high-performing entity that will outperform global best-in-class organisations in standards development, testing, certification, training and business advisory,” the entity says in the procurement document.
“The business case must quantify the level of investment required and demonstrate a credible pathway toward long-term financial sustainability, profitability and thought leadership within the standards development and conformity assessment sector.”
Critical weakness
The underperformance of the SABS has been worsened by severe laboratory equipment failures, with the entity needing significant investment to modernise 28 laboratories to remain competitive.
The most critical weakness lies in the certification division, which makes sure that the products South Africans buy comply with local and international standards.
The underperformance is not without consequences for industry and South Africa’s trade with the rest of the world, with local manufacturers having to jump hurdles to secure local and international contracts due to delays and inefficiencies in receiving SABS certification.
The SABS could not be reached for comment.
In its annual performance plan for 2026/27–2028/29, presented in parliament last month, SABS chair Bismark Tyobeka said the role of the entity in the economy was crucial as standards enabled trade and protected consumers.
The appointed consultant will need to look beyond just the SABS operational performance and take into account the NRCS, to establish whether the decision to demerge was the right one
— Toby Chance, DA spokesperson for trade, industry and competition
“In the next three years, the SABS will prioritise the development and promotion of standards in strategic sectors that demonstrate high growth potential, job creation and export opportunities, in alignment with industrial policy, market and public demands,” he says in the plan.
“Key focus areas as detailed in the plan also include the acceleration of the laboratory recapitalisation programme, expansion of testing capabilities for emerging and future products, as well as the completion of the digitisation programme of core business processes.
“Achieving financial sustainability and operational efficiency will be crucial to the plan’s success, alongside fostering a high-performance culture.”
Trade, industry & competition minister Parks Tau last year appointed TSU International to conduct an independent investigation into allegations of misgovernance, corruption and mismanagement at the SABS.
DA spokesperson for trade, industry and competition Toby Chance said the business model of the SABS was rendered unsustainable after it was demerged in 2008, leading to the creation of the National Regulator for Compulsory Specifications (NRCS).
“The appointed consultant will need to look beyond just the SABS operational performance and take into account the NRCS, to establish whether the decision to demerge was the right one,” Chance said.
“The scrutiny the DA put the SABS under over many years eventually led minister Tau to appoint TSU International in February 2025 to conduct an investigation into the problems at the institution. The SABS board is due to present the findings of this investigation to the portfolio committee on 29th May when we will have an opportunity to establish whether necessary actions are being taken to address the deep-rooted problems revealed by the whistleblowers.”
Business Times
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