The Fiji Sugar Corporation has recognized weak cash flows and severely limited borrowing capabilities as significant obstacles in its future development. The Corporation described this situation as “deep stress,” which has resulted in the need for consistent borrowing at high interest rates to fund normal operations, leading to yearly average interest expenses nearing $18 million in recent years.
FSC chairman Nitya Reddy expressed particular concern regarding the dramatic increase in the company’s debt over the past 20 years, rising from $7 million in 2006 to $443 million by the end of the financial year on May 31, 2024, with $156 million due for repayment in the next 12 months.
He noted that such high debt levels not only classify the FSC as insolvent but also force it to rely on government guarantees. Furthermore, he indicated a lack of evidence for responsible investment of these funds into long-term productive capital.
“Looking ahead, FSC must persist in its transformation and growth with renewed vigor,” Mr. Reddy stated in the FSC 2024 annual report. He emphasized that improvements in financial performance, operational efficiency, and strategic planning provide a solid foundation for future efforts.
Mr. Reddy highlighted that the FSC cannot survive on its current yield, which is less than 15 million tonnes, stressing the need for stakeholders to commit to recovery efforts. The Corporation is focused on enhancing the entire value chain from the field to the factory to boost productivity and lower costs, including investments in research and development to foster innovation in sugarcane agriculture and milling processes.