FSC debt reaches $310m despite $200m Govt write-off

Despite a $200 million Government write-off, the Fiji Sugar Corporation's (FSC) debt has climbed to $310 million as it closed its books for the current financial year.

During FSC's 2024-2025 annual report submission to the Standing Committee on Economic Affairs, deputy chair Premila Kumar questioned the rising debt figure, describing it as a "bottomless pit".

FSC chief financial officer Anjay Sharma said the corporation had consistently operated with a cash deficit because of declining cane production and weak financial performance over the years.

"Around $30 million to $50 million is our cash shortfall because we are not able to generate enough revenue to meet our operating costs," he said.

FSC chief executive Bhan Singh said the corporation was also significantly underutilising the capacity of its mills.

"For example, the mills are designed to crush 1.2 million tonnes of cane annually. This year, they will only crush about 330,000 tonnes of cane," he said.

"We continue to employ the same number of people and incur the same costs. Everything remains the same, but cane production and sugar output have declined."

He said the corporation's financial challenges were largely due to low capacity utilisation.

"We are not utilising the capacity that is available. The design is such that we cannot simply change the operating conditions. So, it is a difficult scenario."

The Rarawai and Labasa mills are designed to process more than one million tonnes of cane annually, but both are operating well below capacity.

To address the issue, Singh said FSC planned to install new boilers, beginning with the Rarawai Mill. The upgrade is expected to increase crushing capacity from 230 tonnes of cane per hour to 300 tonnes per hour.

FSC has also requested additional Government guarantees to support its borrowing capacity, with approximately $66 million in guarantees currently available for new loans.

Based on current cane production levels, the corporation is also looking at reducing costs in key operational areas, including rail services.

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