MACHINES bought by the FSC under the Sugar Technical Mission of India program have hardly been used.
FSC board chairman Nitya Reddy said the machines were bought through a $US50million ($F113m) loan from EXIM Bank in the early 2000s.
“In one catastrophic misdirected investment alone referred to the STM, the Sugar Technical Mission of India underwritten by an EXIM Bank loan of $US50million equaled $110million, FSC suffered an efficiency loss of more than $350million from the purchase of machines, many of them have remained idle without any prospect of use,” said Mr Reddy.
“There is a machine that is valued at close to $400,000 that was pawned, sold to us lying idle at the mill. It will never be used.”
Mr Reddy said they’d tried to sell it by tender “and the highest tender we got for that $400,000 machine is $10,000”.
He said these figures were confirmed through an audit which was also a costly exercise.
“These are not conjectures that I am making. These figures are supported by one of the most independent KPMG Sydney, for which the industry paid $180,000.”
Mr Reddy said years of mismanagement and failed leaderships have been the root cause of the industry’s downward turn over the past 25 years.
“The result has been a spectacular litany of failures of stewardship and a gross oversight of responsibilities.
“We must confront with urgency the multiple challenges and crises that have been around over the last two decades and address the near fatal damage inflicted through reckless neglect, chronic mismanagement and millions of dollars wasted and misdirected investments including an underbelly of corruption.
“We estimate the cumulative cost of all this to be in the vicinity of $1billion.”
‘Band-Aid fixes won’t save industry’
TEMPORARY Band-Aid solutions and reoccurring government guarantees will not restore the sugar industry’s long-term sustainability, says Fiji Sugar Corporation Ltd (FSC) board chairman Nitya Reddy.
Speaking in Lautoka recently, Mr Reddy did not hold back on his opinion of the country’s numerous attempts to revive the sugar industry.
“We are at least 30 years behind in comparison to other sugar producing countries in terms of our cultivation practices, growing agriculture productivity, land utilisation, transport infrastructure, mill inefficiencies and diversification into value added products,” said Mr Reddy.
“Our sole dependence on raw sugar manufacturing in the face of declining world sugar prices is an imprudent commercial strategy that sees us working on a tightrope.
“There is no other country that relies on one single commodity for an industry that is so important to their nation’s economy.”
He said every other sugar-producing country has heavily invested in diversification and value-added alternatives to produce at least a dozen additional products.
“It is a serious indictment of those who had previously been assigned to have oversight of the industry that not a single meaningful initiative was implemented despite a large number of overseas delegations, attendances at international sugar conferences.
“They have been to every corner of the globe where cane is produced yet not a single strategic change has been made to the industry over the last 20 years.”
Mr Reddy said the industry would need at least $500million to get itself out of its current situation.
Sugar Minister Charan Jeath Singh agreed with Mr Reddy’s sentiments, saying there was a need for a huge financial boost from the Government and its partners to revive the industry.
“Whatever (Mr Reddy) has said is actually the reality on the ground for FSC and the industry itself,” said Mr Singh.
“What he emphasised is the neglect of the industry in the last 30 years and where we have been given to start and take the industry forward. “As far as the move forward of the industry, he has made it very clear that if we are to turn it around, the Government has to inject $500million and that is mainly to bring in two brand new mills.”
