The Fiji Sugar Corporation has identified weak cash flows and severely limited borrowing capacity as significant obstacles to its future progress. The Corporation described this “deep stress” as resulting in regular borrowings at high interest rates, primarily to cover operational costs, leading to average annual interest expenses nearing $18 million in recent years.
FSC chairman Nitya Reddy expressed particular concern over the ballooning debt levels over the past 20 years, which surged from $7 million in 2006 to $443 million by the end of the financial year on May 31, 2024. Of that amount, $156 million is due for repayment within the next 12 months.
Mr. Reddy stated that with such extreme financial exposure, the FSC is not only considered insolvent but also heavily reliant on government guarantees. He noted a troubling lack of evidence showing that the organization is using these funds prudently for long-term productive investments.
He emphasized the need for the FSC to pursue its transformation and growth with renewed energy and commitment. In the FSC’s 2024 annual report, he highlighted the strides made in financial performance, operational efficiency, and strategic planning as a solid foundation for future development.
The FSC is committed to enhancing the value chain from field to factory, aiming to improve productivity and reduce costs. This includes investments in research and development to foster innovation in sugarcane agriculture and milling processes.
Mr. Reddy also pointed out that the FSC cannot sustain itself on its current crop production, which is below 15 million tonnes, urging stakeholders to commit to its recovery efforts.