The Fiji Sugar Corporation has highlighted that weak cash flows and severely limited borrowing capacity are significant obstacles to its future prospects. The Corporation reported that this state of “deep stress” has resulted in frequent borrowing at elevated interest rates, primarily to support daily operations, leading to average annual interest expenses nearing $18 million in recent years.
FSC chairman Nitya Reddy expressed growing concern regarding the escalating debt levels over the past two decades, which have surged from $7 million in 2006 to $443 million by the end of the financial year on May 31, 2024; out of which $156 million is due within the next year.
He noted that this extreme debt level not only renders FSC effectively insolvent but also compels it to rely on government guarantees. Mr. Reddy criticized the lack of evidence regarding the prudent utilization of these funds for long-term productive investments.
“Looking ahead, FSC must continue its transformation and growth with renewed zeal and determination,” Mr. Reddy stated in the FSC 2024 annual report. He emphasized that the improvements made in financial performance, operational efficiency, and strategic planning provide a solid foundation for advancement.
The Corporation is committed to enhancing the value chain from field to factory to boost productivity and lower costs, which includes investing in research and development to foster innovation in sugarcane farming and milling processes.
Mr. Reddy pointed out that FSC cannot sustain itself with its current production, which is below 15 million tonnes, and urged stakeholders to commit to its recovery efforts.