Fiji Hardwood Corporation Ltd (FHCL) faced a challenging financial situation with $50,000 in its trust account and a significant debt of $8.7 million when a new administration took charge in 2021. General manager Semi Dranibaka expressed his astonishment at being appointed to lead the company amidst these challenges.
The debt stemmed from loans taken out from various financial institutions, including the Fiji Development Bank and the Fiji National Provident Fund, along with arrears owed to landowning units that dated back to 2007 and 2011. In response to these challenges, the company undertook a major internal revamp between 2021 and 2022, restructuring its operations and collaborating with internal auditors and the Office of the Auditor-General to streamline procedures.
This overhaul resulted in remarkable financial improvements, turning the company’s bank balance from a deficit to a profit of $3 million within a year. In 2022, FHCL managed to pay off its significant dues, clearing a total of $1.2 million in lease arrears, and by the end of 2023, it became debt-free.
Dranibaka attributed these successes to the proper management of mahogany log sales in compliance with the Company’s Act 2015 and the Public Enterprises Act of 2019. He emphasized the importance of transparency and good governance for state-owned enterprises.
In 2023, FHCL commenced making advance lease payments, contributing $800,000 annually. Additionally, the company settled approximately $875,000 in arrears concerning stumpage and lease rentals. Dranibaka also noted the resolution of previously unt lodged tax provisions.
Looking ahead, FHCL has submitted a draft of its Annual Business Plan and Statement of Corporate Intent for 2025-2027 to the Ministry of Public Enterprise and the Ministry of Forestry for further discussions, exemplifying their commitment to sustainable growth and improved financial health.
This turnaround story illustrates the powerful impact of strategic management and accountability in overcoming financial adversity. It serves as an inspiration for other companies facing similar challenges, highlighting that with the right leadership and operational reforms, it is possible to achieve financial stability and growth.
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