Fiji’s sugar company loses millions

The Fiji Sugar Corporation Limited (FSC) group recorded a loss of $19.3 million during its financial year ending May 2008.

The previous year, FSC recorded an operating profit of $6.6 million.

The FSC has described this as one of its biggest loss ever recorded in recent years.

Corporation director Marika Gaunavou said these results reinforced the much need restructure of the sugar industry as a whole so it was competitive in the international market and meet stakeholders’ expectations.

He said while it was encouraging to see added focus on accelerating progress on sugar industry reform programmes, trading performance was disappointing, which saw sharp decline in cane production and sugar make.

“It is apparent that delays in implementation of various reform programmes, which are significantly behind schedule, are now beginning to have adverse effect on the operating results of the Corporation,” Gaunavou said.

“The bring the sugar industry back to global competitiveness and prepare in the industry to survive the reductions in the protocol sugar price to 14.3 per cent in 2008 and 36 per cent in 2009, the implementation of the industry reform programme is urgently required,” he said.

Gaunavou said delay in the implementation of the mill upgrade programnme, by almost two years, was a major concern as this was linked to the various initiatives being considered part of sugar industry reforms.

He added steps had been taken to accelerate progress on the project to ensure completion by May 2009.

He highlighted that the upgrading of mills around the country would require a total of 4.2 million tonnes of cane for a 25-week crushing season, compared to current production levels of around 2.5 million tonnes.

“This will require cooperation and support of all stakeholders, including growers, landowners, government and related institutions. The Corporation looks forward to working closely with all the industry stakeholders on this initiative.”

Gaunavou said diversification projects would also be essential to enhancing the profitability of the sugar industry.

In this regard, he said the Corporation was actively pursuing cogeneration of electricity, production of ethanol and other value adding projects.

“These diversification strategies are consistent with global sugar industry best practices for competing in the new market conditions.”

“In addition to the mill upgrade project, increases in cane production and diversification projects, several other key areas is the streamlining of harvesting and transportation operations, which provide huge opportunities for cost reductions,” Gaunavou said.

“Manpower levels will also need to be rationalised,” he said.

The corporation crushed 2.5 million tonnes of sugar cane compared to 3.2 million tonnes in the previous season, and sugar production of 237,418 and 114,199 tonnes of molasses.

source:fijilive