Fiji Hardwood Corporation Ltd (FHCL) faced significant financial challenges when the current administration assumed control in 2021, with only $50,000 in its trust account and a staggering debt of $8.7 million. Semi Dranibaka, the company’s general manager, expressed his surprise at being appointed to the role given these circumstances.

The debt primarily stemmed from a loan acquired through the Fiji Development Bank, the Fiji National Provident Fund, and other financial institutions dating back to between 2007 and 2011, along with arrears owed to landowning units.

To address these issues, FHCL undertook substantial changes between 2021 and 2022, overhauling internal operations and restructuring the organization with the help of auditors and the Office of the Auditor-General. This effort resulted in impressive financial improvements, with the company’s bank balance soaring from $50,000 to a profit of $3 million within a year. However, these profits were utilized to pay off outstanding loans and arrears, including $1.2 million in lease arrears.

By the end of 2023, the company had successfully cleared its $8.7 million debt and was proud to report that it is now debt-free. Mr. Dranibaka attributed the turnaround to the increased value of mahogany logs sold, emphasizing the importance of adhering to proper procedures and regulations outlined in the Company’s Act 2015 and the Public Enterprises Act of 2019. Such governance practices have ensured transparency and accountability as a public enterprise.

In 2023, FHCL began making advance lease payments, with $800,000 paid annually, and significant payments to TLTB for arrears and stumpage rentals were also completed. Furthermore, the company is addressing previously unfiled tax provisions.

Looking ahead, Mr. Dranibaka stated that a draft of the Annual Business Plan and Statement of Corporate Intent for 2025-2027 has been submitted to the relevant ministries for further discussions, setting the stage for continued growth and stability.

This turnaround story of FHCL illustrates the power of strategic planning and effective management in overcoming financial difficulties. It embodies hope and serves as a model for other organizations facing similar challenges, demonstrating that with the right focus and governance, recovery and success are within reach.