The Board and Executive Chairman of Fiji Pine Group,
Representatives of the Vanua and Plantation landowners,
Management and Staff of Fiji Pine Group,
Ladies and Gentlemen,
Bula vinaka and a very good afternoon to you all.
It is a pleasure to be with you all today as we celebrate another successful year for the Fiji Pine Group. We can take pride in yet another year that we have been able to distribute dividends to Fiji Pine’s shareholders. And we all know that dividends mean profits, and profits mean good management and strategy and, a vision.
Only a few years ago, the success we are celebrating today would have seemed impossible, little more than a pipe dream. Back then, we had nothing to celebrate and a lot of work ahead of us. There were no payments to shareholders, because there were no profits. Our pine industry faced catastrophe. But we don’t passively accept catastrophe, and we don’t accept mediocrity. Fatalism is no basis for running an industry or a government, and we seized the opportunity to determine the destiny of our pine industry. So within Government we asked ourselves some questions: Is there any reason we should not have a viable pine industry in Fiji? Can we come up with a plan to make our pine industry profitable? The answer to these questions were yes and yes.
So my Government launched a comprehensive reform of this industry. And here we stand today, at the distribution of the fourth consecutive lease security bonus payment to our valued shareholders.
Our goal was not to survive, but to strive. And the Fiji Pine Group has done just that, over these past five years, steadily increasing its revenue and profits. In 2013, the first lease security bonus payment to give landowners who qualify a share of profits stood at $350,000; today, it stands at a record $1.5 million. Last year, we celebrated crossing the million-dollar mark, and now we have done better—nearly a full 50% better. This is a true victory for the Fiji Pine Group, its shareholders, and, indeed, the entire Fijian economy.
Fiji Pine recorded profits of $24.12 million in 2015, an extraordinary turnaround of $28.6 million from the $5 million loss in 2010. So it is safe to say that this industry is back. Gone are the days of insolvency. Gone are the days of high debts and neglect, rapidly depleting forest resources. Instead, Fiji Pine has emerged as a shining example of what Government can accomplish when we attract the right people and work together with industry–an example of how sustainable practises and development can take performance to new levels.
Thanks to my Government’s reforms – Fiji Pine has practiced prudent financial management, re-invested its profits in forests and factories, and raised the standards and expectations in the work environment. The operation is more disciplined and more innovative than ever before. And it certainly shows—in better profits, proud workers, and content landowners.
This bonus payment is a recognition of all that success. It is a direct return to our landowners who have leased their land to Fiji Pine, and it arrives on top of the $1.1 million paid out for ground rent, $910,000 for stumpage and $660,000 for forest-based levies to the forests in Lololo, Bua, Nabou, Nadi, Macuata and Ra.
I also have been told that the replanting program that begun five years back is progressing well, and that a new nursery has been set up in Uto, Nadi. So as we develop our current pine industry, we are also laying a foundation for future generations. And that is something we must always keep in mind, because pine cultivation is a long-term proposition. The plantation cycle takes 22 years to complete. That means that we are always planting for our children and our children’s children. And they will only have a pine industry if we keep our commitment to safety, sustainability, profitability and, decisive and transparent management.
These forest were neglected for many years, so there is a lot of time to make up. The effort you put into these replanting programs, both at Fiji Pine and as landowners, guarantees a sustainable future for Fiji. A future Fiji where our sons and daughters can enjoy the same bounty of forestry resources that we enjoy today.
One of my Government’s major priorities was putting in place effective management, management that could implement our vision. Thank you Faiz Khan, the executive chair and the board members of the Fiji Pine Group for your energy, dedication and commitment to my government’s vision. The relationships you have forged among staff, with landowners and with Government is at a new level all together. You have shown that it takes more than just investment, cost control and planning to make a business successful. Those activities are critical, but they are only the beginning. You have shown that the workers, the landowners and Government all must share in the progress, the sacrifice and discipline of building a business. This is a partnership, and we all profit when we cooperate as partners. And we will all benefit when there is strict compliance with the law, rules, procedures and processes on a transparent basis and, at all levels.
Ladies and gentlemen, I am here today not only to distribute these bonus payments, but also to open the brand new, state-of-the-art Vislanda sawmill and Windsor kiln system. The new Vislanda sawmill has been constructed at a cost of $16.25 million and replaces a 35-year-old factory that was badly out of date and incapable of meeting the demands of the modern pine market. The Windsor kiln system, constructed at a cost of $1.87 million will allow for faster, higher quality drying of softwoods.
And these upgrades aren’t all you can expect. There are another $6.3 million worth of upgrades ongoing, including the set-up of a new water treatment plant and repairs to your turbine and boiler, which will both begin operating again in four months’ time.
That brings the total value of investments in new upgrades to $24.5 million. And I’m happy to report that the entire sum is paid out of Fiji Pine’s reserve cash flow saved over the past few years. Not a single cent has been borrowed. Quite an achievement for a company on the verge of bankruptcy not so long ago.
On top of that, Fiji Pine has improved its balance sheet by $74 million and reduced its external loans by $20 million over the last five years.
Today is a day of well-earned celebration. To all the landowners, I hope you make the most of these bonus payments and continue to work alongside the Fiji Pine Group to build up our pine industry today and preserve our forestry resources for tomorrow.
My God bless our people and our industry. And may God Bless our beloved Fiji.
Vinaka vakalevu. Thank you.