Crucial 118-year-old South African company collapsed despite R492 million funding

Onderstepoort Biological Products (OBP) collapsed, which means that it cannot manufacture vaccines to fight the foot-and-mouth outbreak in South Africa.

Onderstepoort Biological Products was established in 1908 and exists to prevent and control animal diseases, like the foot-and-mouth disease (FMD).

It was an important weapon to fight diseases which could impact food security, human health, and livelihood in South Africa.

The facility was a globally renowned biotech manufacturer and provider of animal health products and a leader in its field.

It played a central role in the prevention and control of animal diseases in South Africa, Africa, and the world.

Onderstepoort Biological Products SOC was so important to South Africa that it was declared a National Key Point on 22 January 2007.

However, as with many other state-owned companies, severe mismanagement and possible corruption caused significant damage to the facility.

It started to struggle with ageing infrastructure, which had to be upgraded to meet international Good Manufacturing Practice (GMP) standards.

The National Treasury allocated approximately R492 million to the Onderstepoort Biological Products to upgrade and modernise the facility.

However, a large part of this money seemed to have been squandered, and OBP received a qualified audit from the Auditor General (AG).

The Auditor General revealed that a large portion of a grant to Onderstepoort Biological Products was unspent and unaccounted for.

The result was that OBP could no longer produce foot-and-mouth disease vaccines as it lost the ability to meet the safety and containment standards.

This forced South Africa to pay millions to import FMD vaccines from the Botswana Vaccine Institute (BVI) and other international suppliers.

Daily Investor asked Onderstepoort Biological Products (OBP) for comment, and will add their response when received.

Onderstepoort Biological Products’ missing money

When Agriculture Minister John Steenhuisen took over the role, he raised concerns about OBP and the funds allocated to modernise the facility.

He promised a forensic audit would help reveal what happened with the R492 million earmarked for upgrades at Onderstepoort Biological Products.

However, to date, there is not much clarity on what happened to the money or what the forensic audit revealed.

Steenhuisen was asked about the forensic audit’s outcome, but he would not answer questions about it.

ActionSA Parliamentary Leader Athol Trollip said he was concerned about Steenhuisen’s continued silence on the investigative report.

This investigation should have shed light on the disappearance or improper accounting of approximately R492 million at Onderstepoort Biological Products.

“This failure lies at the heart of South Africa’s vaccine shortage and undermines confidence in the current strategy,” Trollip said.

This is the reason the Agricultural Research Council (ARC) and Onderstepoort Biological Products (OBP) have lost the ability to produce sufficient vaccines.

Trollip argued that this collapse was due to chronic mismanagement and infrastructural decay at the institutions.

“How can the very institutions responsible for this failure now be trusted to lead a proactive vaccination campaign? Are they capable of doing so?” he asked.

“Instead of dealing with the question, the Minister remarked that it was highly unusual for a Member of Parliament to ask questions at a press briefing.”

Farmers left vulnerable amidst the devastating foot-and-mouth outbreak

The foot-and-mouth disease (FMD) outbreak is ravaging cattle and dairy farmers across South Africa and has caused tremendous damage to the industry.

The government failed to contain the foot-and-mouth disease outbreak, and it is currently active in seven provinces.

The livestock industry is under extreme pressure. Export markets are restricted, and local meat and dairy prices are expected to rise sharply due to decreased production.

Steenhuisen announced plans to vaccinate all the cattle in South Africa from Foot and Mouth Disease (FMD) starting in February 2026.

Despite these plans, many experts said the ambitious vaccination project is unlikely to succeed, and a more urgent response is needed.

The problem is that farmers cannot solve the problem themselves. They are prohibited from buying vaccines and vaccinating their livestock.

Foot-and-mouth disease is classified as a state-controlled disease, which means only the government may procure and distribute vaccines.

Therefore, farmers are prohibited from sourcing or administering vaccines themselves, even if they can afford them.

This means that even when animals are dying in front of their eyes, they must wait for the government to stop the crisis.

Many experts highlighted that the government and the Department of Agriculture have been ineffective and continue to drag their feet on important initiatives.

Sakeliga, SAAI, and Free State Agriculture have now taken the fight to the next level by serving a letter of demand on Steenhuisen.

They want confirmation that livestock owners and the private sector generally may procure and administer foot-and-mouth vaccines.

However, Steenhuisen dug in his heels and has vowed to fight these demands. He added that it would cause farmers to suffer.

“Litigation, in the midst of a serious outbreak, now seeks to challenge the legislative framework and obligations required by the State to protect the national herd,” he said.

“Now is not the time for distraction. What we need now is a united and full focus on dealing with the current crisis.”