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$24.5m Investment For Tropik Wood’s Ageing Factory Facilities Overhaul

Entire funding through monies saved over the past three years by the company with self management By the end of the year, Tropik Wood’s Drasa Mill in Lautoka is expected
20 Jul 2016 11:53
$24.5m Investment For Tropik Wood’s Ageing Factory Facilities Overhaul
Prime Minister Voreqe Bainimarama on his way to open Tropik Woods new sawmill and kiln at Drasa, Lautoka yesterday.Photo: ARISHMA DEVI NARAYAN

Entire funding through monies saved over the past three years by the company with self management

By the end of the year, Tropik Wood’s Drasa Mill in Lautoka is expected to have undergone a $24.5 million upgrade resulting in almost a complete overhaul of its ageing factory facilities.

Executive chairman of the parent company Fiji Pine Group of Companies, Faiz Khan, revealed this yesterday as the Prime Minister opened the new sawmill and kiln facilities.

The investment in the new state-of-the-art Soderhamn Vislanda sawmill itself was an investment of $16.25 million and the Windsor kiln facilities cost arounf $1.87 million.

Mr Khan confirmed there is an additional $6.5 million of works currently ongoing on a brand new water treatment facility, boiler and turbine repairs.

All combined, the investments will tally up to $24.5 million.

“We have upgraded our sawmill with a state-of-the-art automated brand new Soderhamn Vislanda line from Sweden,” he said.

“There are only a handful of factories in Australia and New Zealand that can boast a Soderhamn Vislanda line such as ours.”

Mr Khan emphasised following the commissioning of the sawmill, they have successfully increased their output by about three times.

“Our recovery of timber from logs has increased from 28 per cent to 51 per cent,” he said.

 

No debt taken

And the best part of the investment has been that the entire $24.5 million of upgrades have been carried out through monies saved over the past three years by the company.

Mr Khan informed: “We have not taken a single cent of debt to fund these projects. This is truly astonishing.

“In fact in the past five years, we have also reduced our external financial debt by $20 million.

“Our shareholders fund (including forest valuation) has grown by $74 million; or excluding forest valuation by $52 million.”

It would be worth to note that in 2007, Fiji Pine Limited as the parent company, became insolvent, having to borrow every Friday to just pay weekly wages.

Mr Khan said: “By March 2008, Westpac our financer imposed a condition for the subsidiary Tropik to manage Fiji Pine failing which they would appoint receivers.

“This condition was satisfied. Then in 2010, both Fiji Pine and Tropik, became financially insolvent and faced receivership.”

Therefore, Mr Khan urged the landowners, whether they have contributed five hectares of land or 2000 hectares to Fiji Pine, the need is there to stay united on long term future to ensure the company doesn’t go back to those days.

 

Urgent need for upgrades

Some might argue the performance of Tropik Wood and question whether the $24.5 million upgrade has been justified.

But the fact was this was a 35-year-old sawmill facility which has now been entirely removed.

In fact, Mr Khan said when they advertised the old sawmill for sale, the highest bid they received was $6500.

“Factories and machines have a use by date just like the packet of milk that we buy from the supermarkets,” he said.

“Just as we need to replant what we harvest, the factory needs to be upgraded when it has gone past its use by date.”

 

Self project management

Mr Khan highlighted another milestone for them was Tropik did not hire an external project management firm for overseeing these project works.

“Instead our executives internally undertook project management. They made decisions on every aspect of this project be it procurement, planning or delivery,” he said.

“In doing so they saved millions of dollars by making timely and value for money decisions. This is no mean feat by any standards.

“Managers and staff members often worked around 80 hours a week. Many a time they were physically tired, but by maintaining a high morale they remained mentally strong and driven.”

Mr Khan publically acknowledged and thanked each one of them for their efforts.

Edited by: RACHNA LAL

Feedback:  rachnal@fijisun.com.fj



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