Posts tagged Fiji Pine

SPEECH AT THE FIJI PINE GROUP HANDING OUT OF BONUSES

Bula Vinaka and good afternoon to you all.

I’m very glad that I was able to make it for this special occasion.

In fact, I’m travelling around the West today to inspect the preparations being made for the coming storm, but I insisted on keeping this appointment because I wanted to be here with you to celebrate yet another milestone in Fiji Pine’s remarkable turnaround. In this case, the presentation of the Industry’s first-ever lease security bonuses.

This is a wonderful new initiative that will forge a closer partnership between the Fiji Pine Group and landowners as the Group continues to demonstrate to Fijians that the Pine Industry can not only be sustainable, but profitable.

It’s a shining example to the rest of the country of what can be accomplished when stakeholders share a vision and then join forces to accomplish it.

I’ve always said that co-operation and partnership during periods of reform will lead to shared successes and profits. And today is proof of this.

It’s true that I often hold up Fiji Airways as an example of how smart policies and long-term thinking can not only avert disaster, but pave the way for new beginnings.

The process of reform wasn’t always easy and my Government had to intervene to make a number of difficult decisions. But all involved were able to work together and in the end Fiji Airways emerged stronger and better than ever, including a profit-sharing scheme for employees that ensures everyone benefits from the company’s success.

Well, Ladies and Gentlemen, now we can start to talk about the Fiji Pine success story. There’s no doubt that the Fiji Pine Group which includes Tropik Wood, rightly deserves a place alongside Fiji Airways as an example of how the right policy settings, the right people and the right attitude can lead to the most remarkable turnaround in fortunes.

Like Fiji Airways, the Fiji Pine Group is showing us what can be accomplished when management, staff and stakeholders – in this case which also includes the landowners – work together towards a common goal. It’s a success story that all Fijians can be proud of.

I’m sure by now many of you know the story. As recently as 4 or 5 years ago, the company was drowning in debt, corruption, outmoded practices and mismanagement.

Repeated loans were barely able to keep the organisation afloat and many of those in the banking sector eventually started to feel like they were throwing good money after bad. By the end, those few who were willing to lend did so at astronomically high interest rates.

It’s true that many of the logging operations that were set up to help landowners see a healthy return never produced anything but a loss. In fact, the cost structure was so backwards that in theory one could make more money by doing nothing and simply receiving their no-strings commission payment from Fiji Pine. It doesn’t take a degree in finance to know that’s bad business.

It’s no surprise that as a result many landowners were unable to see the benefits of a partnership with the company. I don’t blame them. For a partnership to be successful, both parties have to see the advantages clearly, otherwise it’s an uneven relationship.

In this case, all the landowners could see was their land tied-up in an unprofitable enterprise. It’s no wonder many did not want to renew their leases when the time came.

I’m happy to say that we’re putting those days in the past. Fiji Pine is turning the corner under new leadership and capable management.
Indeed, the impetus for the reform at Fiji Pine was the appointment of skilled professionals in key management positions who have acted honestly and worked tirelessly for the company.

My Government has always put a premium on finding the right people to do the job, whether it’s building a road, running a Government agency, or getting water flowing from the taps.

In stark contrast to past Governments, we believe it’s about hiring the best person for the job, not about appointing someone because of where they’re from, what their ethnicity is, or who they know.

In order to attract the best, we’ve made sure that we offer competitive salaries that are in line with the private sector. The cost is more than made up for by the increase in capability, productivity, honesty and transparency.

We’ve adopted this policy across a broad front and I’m happy to say that it is already paying dividends, as can be seen right here at Fiji Pine.

Faiz Khan has led his team through the most incredible reform program that’s moved the company toward sustainability and growth, two words that we always like to hear.

As a result of his strong leadership, all stakeholders stand to benefit including the landowners, staff and all workers.

Now, the company is actually in the position to start clearing its debts and paying corporate taxes for the first time in its history.

Today, Fiji Pine will be repaying a loan of $6.7 million to Fijian Holdings Limited, which I helped them secure less that a year-and-a-half ago. In August last year, Fiji Pine repaid a $2.4 million Government loan less than 3 months after it was made. This is clearly quite a difference from the past record of taking more than 25 years to pay off a loan, if ever. Such ability to pay off loans within only such a short period of time is virtually unheard of in Fiji.

By conducting business like this, it’s no wonder that banks are beginning to lend to the company at record low rates.

But, of course, an organisation is nothing without its staff, it’s workers. My Government has always believed that all employees should benefit from their company’s success. It’s a matter of basic fairness and one of the most fundamental of workers’ rights.

Fiji Pine is no exception. In this case, the company’s growing success has already allowed it to reward its employees for their hard work with pay rises last year as well as bonuses for unused sick leave.

They have also reinvested some of their profits to improve working conditions for employees, including the construction of a new canteen that offers subsidised meals and new shower and toilet facilities.

Another major part of the reforms has been bringing the landowners back into the fold by showing them that the Pine Industry can indeed be profitable.

This brings us to why we are gathered here today.

Lease security bonus payments are a new idea designed to encourage landowners to renew their leases with Fiji Pine. They are a sign of change for the better and an indication of more benefits to come.

Under this system, bonuses will be paid to landowners with land currently leased to Fiji Pine that has at least 15 years of the lease term left or land that already has pine plantations on it.

This will allow Fiji Pine to replant land that is currently not being used. There’s no point planting a tree today if the land will be taken away tomorrow.
I hear that out of the sixty-thousand hectares of leased land on Viti Levu, only twenty-thousand are currently planted.

This program will help switch those figures around. In total, 300,000-dollars-worth of these bonuses is being paid out today, and I understand that by 2015 Fiji Pine plans to grow the program to $1-million.

Ladies and Gentlemen,

My Government supports reforms like that at Fiji Pine because we care about making the necessary decisions to achieve concrete results. We’re not interested in fancy words that make empty promises. Words come easy, and like that, they’re gone again.

We want reforms that benefit ordinary people. This has always been my Government’s top priority and it will continue to be as long as I am your Prime Minister.

With those few words, it is now my pleasure to hand over the very first bonus payments to Fiji Pine’s landowning-partners.

Vinaka Vakalevu. Thank you.

Early Debt Repayment Heralds New Beginning for Fiji Pine: Bainimarama

In a clear sign of the remarkable turnaround in the fortunes of Fiji Pine, the state-owned enterprise has paid off a loan it recently secured from Government to clear a 28 year debt.

Just three months ago, Fiji Pine borrowed $2.4-million dollars from Government to finally settle a loan it obtained from the European Investment Bank in 1985.

Its recent financial performance has been such that the Executive Chairman of Fiji Pine, Faiz Khan, was today able to hand the money back when he presented a cheque for $2.4-million to the Prime Minister, Voreqe Bainimarama.

The Prime Minister commended Fiji Pine for the prompt repayment. “ I can’t recall another occasion when a state-owned enterprise has paid off an outstanding amount to Government so quickly. It’s a great credit to the Board, management and workers and a clear sign of the success of our reform program at Fiji Pine”, he said.

For his part, Mr Khan thanked the Prime Minister for the Government’s support, describing the repayment as a significant milestone “ Because of this assistance, we have been able to clear a debt that has been on our books for almost three decades. It marks a new beginning for Fiji Pine in that we can now put our focus firmly on the future growth of our businesses”, he said.

Mr Khan said Fiji Pine had long been burdened by past failures but was gradually turning its fortunes around and guaranteeing a sustainable future for the enterprise and its workers.

“We made record profits in 2011. And while we have endured an unprecedented slump in the wood chip market over the past 18 months, our marketing strategies will ensure more stable demand for our products into the future”, he said.

Mr Khan said Fiji Pine had transformed its operations at the Wairiki chip mill in Bua and had tackled the corruption, mismanagement and outmoded work practices that were holding it back.

“We have also revamped our nurseries and our planting programs. However, we are still a long way from where we want to be in terms of upgrading the capital we have in our forests, factories and workforce. Fiji Pine Limited, the holding company, had accumulated losses of around $130-million in its books as at December 2010. It is logic and common sense that a business cannot continue like this and will be doomed to fail if not corrected”, the Executive Chairman added.

Mr Khan said debt clearance remained a big priority for Fiji Pine but the Group’s debt burden had now been brought under control. “In the past two-and-half years, the Fiji Pine Group has serviced $25.3 million in debt and reduced our principal by $17.6-million. We still have $55.5m debt left in our books but we are now in a reasonably comfortable financial position where the debts are serviceable from our operations”, he said.

Mr Khan paid tribute to Fiji Pine’s workforce and said they could be proud of their own role in turning around the company’s fortunes. “For too long, we neglected our human assets. We are nothing without our workers and a large part of the credit belongs to them. So as well as providing them with new uniforms, we are currently spending $350,000 on new canteens to provide them with subsidized meals and improving their general work environment with new toilets and shower facilities. This is one of the most exciting priorities on our list of current work”, he said.

Fiji Pine workers were also singled out for praise by the Attorney General and Minister for Public Enterprises, Aiyaz Sayed-Khaiyum, who said they had worked hard with the Board and  management to achieve  “an outstanding result”.

“What we are seeing is proof that our public enterprises can thrive if employees, management and Government work together cooperatively for the common good. This is all good news for those dependent on the industry and for the Fijian economy as a whole”, he said.

Fijian Prime Minister Voreqe Bainimarama Accepts Early Debt Repayment from Fiji Pine