The Fiji Sugar Corporation Limited (FSC) has announced notable advancements in revenue and profitability, despite encountering various obstacles.
Although cane production fell by 15 percent due to adverse weather, FSC saw a 12 percent rise in sales revenue and a 10 percent increase in its share of proceeds. This positive trend, detailed in the financial results for the year ending May 31, 2024, was supported by improved operational efficiencies, stringent cost-control measures, and innovative approaches.
FSC Board Chair Nitya Reddy remarked that the Corporation has demonstrated its resilience in overcoming significant challenges, particularly in light of the persistent neglect and mismanagement that have affected operations for many years.
Reddy stated, “It is well-known that the industry, including FSC, has faced incredibly serious challenges throughout its 150-year history, largely stemming from poor management over the last two decades. We are confronting an existential crisis of unprecedented magnitude.”
He continued to highlight that every aspect of performance has been adversely impacted, citing unsustainably low cane production, declining sugar output, losses in revenue, severe inefficiencies, and aging mill infrastructure as contributors to the current crisis.
“This is a critical time not only for our past but for our future. We are committed to rebuilding confidence at all levels of the industry, a challenge that should not be underestimated,” Reddy added.
He emphasized that the current dilapidated state of the mills is the result of long-term neglect, insufficient maintenance, misguided investments, and a culture of disengagement among authorities. “Those expecting immediate results must understand these realities,” he asserted.
FSC’s focus is on restoring manufacturing efficiencies while enhancing cane production through improved transport, harvesting, and farm mechanization logistics. Reddy noted the importance of addressing issues like burnt cane and unapproved cane varieties.
Additionally, he advocated for transitioning to a quality-based payment structure for sugar, rather than one based solely on weight, which he believes is time-sensitive.
“There are many structural reforms needed, and we must stop being delusional about this. Every segment of the industry must take responsibility for their efficiency and outcomes, rather than relying solely on FSC,” Reddy emphasized.
FSC’s revenue rose by 12 percent to $235.2 million, showcasing a significant improvement in financial performance driven by increased sales and higher prices. The corporation recorded its highest revenue returns in nearly two decades, underlining the sugar industry’s critical role in Fiji’s economy.
Key financial highlights include:
– Share of proceeds at $71.15 million, up from $64.25 million the previous year.
– Trading profit of $13.13 million, compared to $7.45 million last year.
– Profit from operations of $2.51 million, reversing a loss of $4.98 million from the previous year.
– Positive Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) at $24.97 million, up from $17.87 million.
– Operating loss of $4.24 million, improved from a loss of $23.0 million the previous year.
– Investment in Property Plant and Equipment reached $10.05 million, up from $6.94 million the previous year.
Reddy expressed confidence that, with continued stakeholder support, a more robust and sustainable future for Fiji’s sugar industry can be established. He affirmed that FSC remains dedicated to its strategic goals of restructuring, revitalizing crop production, enhancing mill performance, and optimizing revenue.
The Corporation will continue to prioritize operational efficiency, reduce downtime, and seek new market opportunities. These initiatives have contributed to a positive financial outlook and positioned FSC for future growth. Moreover, FSC is committed to sustainability and community involvement, promoting environmentally responsible methods and supporting growers to ensure the sugar industry’s long-term viability.
Recognizing ongoing challenges, Reddy reaffirmed determination to overcome them through new market exploration and strengthened partnerships, setting the stage for FSC’s long-term success.