Fiji Hardwood Corporation Ltd (FHCL) faced considerable financial challenges when the current administration took charge in 2021, with only $50,000 in its trust account and a staggering debt of $8.7 million. General Manager Semi Dranibaka expressed his astonishment at being appointed to the role amid such difficulties.
The debt stemmed from loans taken from various institutions, including the Fiji Development Bank and the Fiji National Provident Fund, as well as arrears tied to land leases dating back to 2007 and 2011. To address these issues, FHCL underwent a significant internal overhaul and restructuring in its operations, facilitated by internal auditors and the Office of the Auditor-General, between 2021 and 2022.
These changes yielded impressive results, with the company’s bank balance rising to $3 million in profit within a year. However, most of this profit was allocated to repay pending debts and lease arrears. An impressive $1.2 million in lease arrears was settled, and by the end of 2023, FHCL had cleared the entirety of its $8.7 million debt.
Dranibaka attributed this successful turnaround to the effective management of mahogany sales and strict adherence to legal and regulatory frameworks, such as the Company’s Act 2015 and the Public Enterprises Act of 2019. This emphasis on transparency and good governance is notable for a state-owned enterprise.
As of 2023, FHCL initiated advance lease payments totaling $800,000 annually, with significant payments made toward previously owed stumpage and lease rentals. Furthermore, the company addressed past tax provisions that had not been filed.
Looking ahead, Dranibaka indicated that a draft of the Annual Business Plan and the Statement of Corporate Intent for 2025-2027 has been submitted for review by the Ministry of Public Enterprise and the Ministry of Forestry, signaling a proactive approach to ensure the company’s sustainability and growth in the years to come.
This story underscores the importance of strong leadership and strategic planning in overcoming financial difficulties. FHCL’s journey is a testament to resilience and determination, showcasing how concerted efforts and commitment to good practices can lead to revitalization in even the most challenging circumstances.
Overall, the turnaround of Fiji Hardwood Corporation serves as an encouraging example for other enterprises facing similar struggles, demonstrating that with the right approach, recovery and growth are indeed possible.
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