Posts tagged Loan Facility

Prime Minister Voreqe Bainimarama’s Remarks on the New Trade Finance Facility for Fiji Sugar Corporation (FSC)

My Government has reaffirmed its commitment to the sugar industry and sugar farmers by guaranteeing a Euro 40 million structured trade finance facility for the Fiji Sugar Corporation (FSC), provided by the ANZ bank.

The agreement between ANZ and the FSC came after a rigorous process of vetting potential finance providers, both on and offshore.

It is important that we cut through the technical-speak and financial language of this agreement. The purpose of this finance facility is to aid sugar farmers and the sugar industry by improving FSC’s cash flow and as a result enforcing financial discipline, and creating more confidence and stability within the industry.

After the establishment of the new finance facility, FSC will have financing on hand to carry out preventative maintenance at the crushing mills and also to put in place a system whereby famers can receive payment for their cane within two-weeks of delivery to the mills.

Because of significant cash flow problems FSC, over the years, has not been able to pay farmers on time – sometimes delays of up to 6 weeks are experienced. This will now become a thing of the past.

The implementation of this new payment system for farmers is a continuation of my Government’s strategy to encourage participation in the industry. The period of payment for cane cutters has already been reduced from 4 weeks to 2 weeks.

Another important aspect of this agreement is the enforcement of financial discipline. For many years, financial discipline was lacking at the FSC, due to a number of unscrupulous individuals, which led to the significant deterioration of the sugar infrastructure in Fiji, especially at the mills. ANZ will now have an input to ensure that proper due diligence is performed before funds are spent.

This agreement also demonstrates the confidence the private sector sees in Fiji’s sugar industry, and shows the potential for private sector involvement in the development and growth of agriculture with Fiji.

This agreement is the most recent facet of my Government’s commitment to effect real reform in the sugar industry, to provide tangible benefits for sugar farmers, and to overall create a modern, viable and sustainable industry. This is a reversal of the unfortunate trend that existed in Fiji where certain individuals and groups used the sugar industry as a means to further their own personal and/or political interests, without a true commitment to the farmers and the growth of the Fijian sugar industry.