SUNBIZ

Ali: Milk Supply, Production Up Following Reforms

Our national milk supply and production has increased following reforms in the dairy industry which led to the sale of Fiji Dairy Limited to Southern Cross (SC) Foods Limited in
05 Aug 2015 13:51
Ali: Milk Supply, Production Up Following Reforms
Shaheen Ali.

Our national milk supply and production has increased following reforms in the dairy industry which led to the sale of Fiji Dairy Limited to Southern Cross (SC) Foods Limited in 2012.

Permanent Secretary for Industry, Trade and Tourism, Shaheen Ali, informed the Public Accounts Committee of this yesterday.

He did not have the exact figures at hand, but said in terms of national supply, the Western Division had begun contributing.

This, he said, was a result of chilling centres being established by SC Foods in the West.

Mr Ali told the committee the whole purpose for the reforms and the sale was to increase production and bring about self-sufficiency in the industry.

He also highlighted the company’s financial position before the sale which did not look very sustainable.

 

Background of sale

In 2010, Government supported and provided funds for the restructure of the Rewa Cooperative Dairy Company Limited (RCDCL).

The restructure sought separation between the processing and supply functions, in order enhance the efficient operation of the dairy business.

The RCDCL was re-organised into FDL, as the processing company, and Fiji Cooperative Dairy Company Limited (FCDCL), as the farmers/suppliers cooperative company.

At the time the reforms began, Mr Ali highlighted RCDCL’s net asset position as at December 31, 2010 was negative $4.7 million.

He said it had also accumulated a debt of $18 million which later on increased to $22 million.

Mr Ali said there were unexplained debtors of $4 million that had to be written off as well.

When SC Foods bought Government share of Fiji Dairy for $10 million, it also took a liability portion of $17 million in addition to what was paid to Government.

When asked on the selection of SC Foods for the sale, Mr Ali said the expression of interest were sent out and 16 companies showed interest.

Out of this, he said two were shortlisted and Southern Cross Foods Limited was picked as their offer by far was better than any of the others.

He said the company had also agreed to Government’s condition of increasing production and increasing supply by also going into dairy farming and also establishing chilling centres.

 

Current situation

Although Fiji Dairy Limited is now a private entity run by Southern Cross Foods Limited, Mr Ali said they still hold regular consultations with the company.

This, he said, was to follow up on the conditions that were attached to the sale which included increasing milk production, establishing chilling centres as well as buying land to start their own dairy production.

Mr Ali stated so far, the quality of milk supplied is noted to have improved with better standards now being shown.

Feedback: rachnal@fijisun.com.fj

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