Mo­han Plans Re­port­ing Changes at Loss-mak­ing FSC


Re­cently ap­pointed Fiji Sugar Cor­po­ra­tion (FSC) chair­man Vishnu Mo­han, while not be­ing pleased with the com­pany’s $31.7 mil­lion 2015 loss, said he in­tended to present the com­pany’s ac­counts ev­ery half yearly in­stead of the cur­rent an­nu­ally. He made the com­ments fol­low­ing the pre­sen­ta­tion of FSC’s An­nual Re­port which was tabled at the Cor­po­ra­tion’s board meet­ing in the morn­ing and share­hold­ers meet­ing in the af­ter­noon.

“We are try­ing to get the 2016 ac­counts soon and next time around we will try and have the meet­ing within 6 months of the bal­ance sheet date than what is cur­rent,” he said.

“I can’t say I am pleased,” he said when asked about the loss. “I think there is com­mon knowl­edge that there are chal­lenges, but the im­por­tant thing is every­body has to work to­gether to make FSC a vi­able propo­si­tion for the fu­ture be­cause sugar in­dus­try is par­tic­u­lar for the econ­omy of the coun­try.”

“It con­sti­tutes a good part of the GDP and is im­por­tant be­cause for­eign cur­rency for the coun­try.” “So we need to make the busi­ness suc­cess­ful and first and fore­most is to get the pro­duc­tion up.” Mr Mo­han said costs to the in­dus­try could be brought down fur­ther and FSC was try­ing their best to do this. “But even if we bring it down slightly, the im­por­tant thing is to get the top line im­prov­ing and that’s what we are work­ing on.” Mr Mo­han said an­other way of im­prov­ing the fi­nan­cial sit­u­a­tion for FSC was to find some new markets and they were try­ing their best to do so. “So we need to have more mech­a­ni­sa­tion and one of the chal­lenges with the farm­ers is labour. For peo­ple to cut cane, we need to ad­dress that. Trans­port needs to be ad­dressed. “These are some of the in­fras­truc­ture that needs to be stream lined and im­proved in order to make the ul­ti­mate prod­uct suc­cess­ful. “Clearly we need to make the mills more ef­fi­cient but we also need to fo­cus on get­ting the cane pro­duc­tion up, get the farm­ers in­cen­tivised and clearly mech­a­ni­sa­tion is one of the key com­po­nents of that.” Mr Mo­han said in­fras­truc­ture was crit­i­cal.

“At the end of the day, it’s all about im­prov­ing the top line. If the top line im­proves, ev­ery­thing im­proves.” The Fiji Sugar Cor­po­ra­tion in­curred an op­er­at­ing loss for the year end­ing 2015 of $31.7 mil­lion. This was com­pared to an op­er­at­ing profit of $6.9 mil­lion the pre­vi­ous year.

In its an­nual re­port, the cor­po­ra­tion noted the share of pro­ceeds was $56 mil­lion com­pared to $62.5 mil­lion in 2014.

It suf­fered a con­sol­i­dated trad­ing loss of $9.3 mil­lion, al­most dou­ble the fig­ure of $4.7 mil­lion the pre­vi­ous year. While the cor­po­ra­tion had in­vested $39.9 mil­lion in 2014, it spent $31.3 mil­lion last year while earn­ings per share were $0.71 com­pared to a pos­i­tive $0.16 in 2014.

In its op­er­a­tions for 2015, 1.83 mil­lion tonnes of sugar was crushed from 38,427 hectares com­pared to 1.6 mil­lion tonnes from 38,248 hectares was crushed the year be­fore. Im­proved cane pro­duc­tion and TCTS (tonne of cane for a tonne of sugar) last year saw an in­crease to 226,858 tonnes from 179,870 tonnes in 2014. Last year, the TCTS was 8.08 com­pared to 8.95 the pre­vi­ous year while can qual­ity (POCS) im­proved to 12.3 com­pared to 11.4 in 2014. The An­nual Re­port also noted that 184,414 tonnes of sugar was ex­ported to the Euro­pean Union last year, com­pared to 165,557 tonnes in 2014.

In his re­port, the for­mer ex­ec­u­tive chair­man Ab­dul Khan said in re­view of 2015, the dry year had an im­pact on sugar cane and sugar pro­duc­tion. “This was fur­ther com­pounded by de­pressed sugar prices through­out the world,” Mr Khan said in his re­port. On the ef­fects of Cy­clone Win­ston this year, Mr Khan said this had af­fected the in­dus­try in terms of sugar cane and in­fras­truc­ture. This saw the Pe­nang Mill in Raki­raki close its op­er­a­tions for this year with all sugar cane in the area be­ing trans­ferred to Rarawai Mill in Ba.

“To en­sure the in­ter­est of all stake­hold­ers in the in­dus­try is kept in­tact, the Cor­po­ra­tion im­proved the cane pay­ment to farm­ers from $70.90 to $81.01 per tonne,”Mr Khan said.

“In do­ing so, the prof­itabil­ity of the Cor­po­ra­tion had been af­fected. “Af­ter the an­nual im­pair­ment re­view of the in­de­pen­dent con­sul­tant, the Cor­po­ra­tion de­cided not to write back any im­pair­ment al­though based on the re­view, a value of up to $10.5 mil­lion could have been writ­ten back.

“An­other fac­tor that in­flu­enced any pos­si­ble im­pair­ment write back was the im­pact of weather on sug­ar­cane pro­duc­tion and the de­pressed price for raw sugar.”

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