Fiji Hardwood Corporation Ltd. (FHCL) faced a daunting financial situation with $50,000 in its trust account and a staggering $8.7 million in debt when the current administration stepped in during 2021. General Manager Semi Dranibaka expressed his astonishment at being appointed to the role, indicating both surprise and a sense of responsibility.
The debt originated from loans taken out by the company from various sources including the Fiji Development Bank and the Fiji National Provident Fund, along with outstanding arrears related to land leases and stumpage. However, by implementing significant internal changes from 2021 to 2022—including restructuring and process improvements—the company turned its fortunes around.
Thanks to these efforts, FHCL saw a remarkable transformation, going from a $50,000 balance to reporting $3 million in profit within a single year. By the end of 2022, the company had successfully cleared its total debt and financial obligations, making it debt-free by 2023.
Mr. Dranibaka attributed this success to the company’s adherence to proper procedures and legislation, such as the Company’s Act of 2015 and the Public Enterprises Act of 2019, which fostered transparency and accountability. The organization adopted stringent cost-cutting measures and closely monitored cash flow to safeguard financial integrity during its recovery.
In 2023, FHCL also began making advance lease payments, contributing approximately $800,000 each year. Significant payments were made to settle outstanding stumpage and lease rentals, along with addressing previously unfiled tax provisions.
Looking ahead, Mr. Dranibaka has laid out plans for the future, having submitted a draft of the Annual Business Plan and Statement of Corporate Intent for 2025-2027 to the relevant government ministries for further discussion.
This development illustrates a significant turnaround for FHCL and showcases the potential for recovery and growth through effective management strategies and a commitment to good governance. The company’s journey from substantial debt to profitability serves as an inspiring example for other organizations facing financial challenges.
In summary, FHCL’s remarkable recovery journey highlights the importance of responsible financial practices and strategic planning, suggesting a positive outlook for the company’s future endeavors.
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