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ANALYSIS: Pine Group’s Success Over The Past Four Years

Talk about culture change. Talk about 360 degree turnaround. Talk about Faiz Khan, the executive chairman now driving the success and success of the Fiji Pine Group of Companies. In
08 Jul 2015 12:47
ANALYSIS: Pine Group’s Success Over The Past Four Years
Faiz Khan

Talk about culture change. Talk about 360 degree turnaround. Talk about Faiz Khan, the executive chairman now driving the success and success of the Fiji Pine Group of Companies.

In the past four and half years, the Fiji Pine Group has successfully delivered major projects and upgrades, contributing to the national economic growth.

Same time, they have repaid $2.5 million loans to European Investment Bank dating back to 1985.

They borrowed $6.7 million to purchase equipment and contractual obligations from a contractor as they were not happy with the terms.

They also repaid that loan in a record 18 months because they were not satisfied with the high borrowing interest rate.

The Group has undertaken many and millions of dollars of capital projects without borrowing to upgrade its aging factory equipment.

Given unprecedented returns to its key stakeholder, its landowners, and in doing so re-invigorated a sense of positivity in the pine industry.

The Fiji Pine Group of Companies in 2013 made profits for the first time in the 50 plus years of history of its parent company Fiji Pine Limited.

It paid income tax; obtained Forest Stewardship Council certification as the first and only company in Fiji, increased its workers pay, benefits and working conditions, and did umpteen policy changes.

These were focussed on the principles of integrity and fairness that brought about record levels of profitability and sustainability to the pine industry.

 

Loan repayment

It continued yesterday.

Fiji Pine Limited, the parent company of the Pine Group, yesterday commenced repayment of Government loans borrowed between 1990 to 2001, by paying off $600,000 of the $12 million loan.

Executive chairman, Mr Khan explained: “The transformation in the pine industry is the result of change in culture, in the way we approach challenges and get rid of years of historical negative mindset that kept pulling the industry back.

“One of these mindsets that we have worked on positively changing is the mindset of subsidy and handout culture.

“Between the years 1990 to 2001, Fiji Pine Limited borrowed $1 million each year from Government for replanting pine after harvesting.

“Government gave a further around $1 million in various forms of subsidy. $2 million a year was given by Government in loans and subsidies every year in this period.

“However, when we look back, the quality of planting was poor and in some areas survivability of trees was only 40-50 per cent.”

Mr Khan said valuable land was being wasted for 15 to 25 years after being planted poorly.

“This is what generally happens with subsidies and loans from Government that are never intended to be repaid by the borrower,” he said.

“People don’t care how it is used. To make it worse, after 2001, the replanting programme came to almost a complete halt.

“This was because the management had not prepared to fund it without help from Government.”

Only as far back as 2010 applications were being made to Government to convert this loan into grant.

“In a 360 degrees turnaround, not only are we now funding ‘long term vision expenditures’ of replanting and capital upgrades from our current cash flow,” Mr Khan said.

“We have vowed to repay the $12 million Government loan that was borrowed between 1990 to 2001.

“This approach is a significant change in mindset. We have shown that we can stand on our feet focussing on qualitative investments.

“Our landowners, our workers, the Government and its taxpayer citizens must all be proud of these achievements.”

Feedback: rachnal@fijisun.com.fj

 

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