Bula Friends, Colleagues and Stakeholders,
One of the hallmarks of success is equitable partnerships with key stakeholders.
The relationships we have rebuilt with our landowners has helped us focus on the business of running Fiji Pine and Tropik, that in turn has resulted in many achievements. Please allow me to quickly mention just five.
- We have returned our pine plantations to “sustainability” from a position of hopelessness. In the last 8 years Fiji Pine has planted more than 2 million pine trees every year.
- Fiji Pine and Tropik are the only two companies within the South Pacific Island Countries, that are Forest Stewardship Council (FSC) certified. FSC certification is a global symbol of responsible forestry that is not easy to achieve. To underscore the achievement, Tropik is one of the very few companies in the world that is “100%” FSC certified under a chain of custody. Globally most companies have “mix” certifications.
- We have set up state-of-the-art sawmill and factory facilities here at Drasa and in Wairiki, Bua. Our sawmill set-up is second to none even when we compare with our more developed neighbors in Australia and New Zealand. The biggest achievement was that during construction we successfully interfaced the old infrastructure with the new machines by effective process engineering.
- Our companies are debt free in that we do not have any external long term debts. Put another way we only have short term or operational supplier debts on our books. From a state of insolvency 8 years ago, today we have one of the strongest balance sheets for a large company that has a turnover of around $100m. This is not to say that we compare against others because that would go against the grain of one of our philosophies that we don’t benchmark – we simply aspire to do the best we can. But our balance sheet ratios has a debt to EBITDA of 0.75 times; current ratio of 4.94 times and interest cover ratio of 37 times are difficult to find in such large trading companies, particularly if the companies are heavily investing in its capital infrastructure.
- Not many people know this, but for the past one and a half years Tropik is supplying around 5% of Fiji’s total power demand through renewable energy sources. By this achievement we help reduce carbon emission and foreign reserve losses through reduction in import bills of fossil fuels. Where the Prime Minister has a vision for fighting against climate change, Tropik is delivering upon that vision.
Friends, I cannot go through all the achievements that have been delivered by my work colleagues for our stakeholders. But you will agree with me that the five achievements I have highlighted denote a meteoric rise and transformation of your company from a position of closure eight years ago to one of strength.
Our workplace aspires to many values and habits that we foster in our team. These include integrity, discipline, being proactive and solution driven, adhering to good systems and processes, innovations, courage to make decisions, etc. However, there are four values that are the fundamentals of the success we have experienced:
- Sense of Ownership – Leaders of your company literally get hurt when there is waste. If money is wasted it is as though they have lost it from their own pockets. Such a sense of ownership has been a crucial factor in where your company is today.
- Sustainability – With our pine plantations taking twenty two years to mature, the pine industry requires long term thinking. All business decisions are made with the long term in mind. And you see the results reflected in our balance sheet.
- Running the business of Fiji Pine “like a business” away from politics – We have received the greatest support from the Government and the Prime Minister, for the pine industry; and we thank you sincerely for your support. But despite the fact that we are largely Government owned, the day to day and strategic business of Fiji Pine is run just like a business should in order to compete in the local and international markets. You have seen for yourself that by running your company like a business we are able to give higher returns back to you in empowering landowners particularly in rural Fiji to improve your socio-economic status.
- Differentiation – We have a great team spirit and camaraderie amongst our colleagues. Yet in order to continue to grow and improve it is essential that we reward our colleagues according to their performances. When we differentiate between star and average performances; fairly and effectively communicate these to our people; mentor and coach them to progress; we energise the entire workforce to aim higher. The value of differentiation has brought positive energy and pursuit of success in our organisation. Any successful organisation or country must have the courage to be able to differentiate in order to achieve long term success.
Based on such values and habits our work colleagues of 483 led by some real star performers, through their hard work, strategy, business, common sense, and a bit of luck – have been able to give us one success story after another over the past eight years.
In 2018 the Fiji Pine Group recorded $38.35m in operating profits before forest valuation, depreciation and Lease Security Bonuses.
In return for the trust our Landowners have placed in us, Fiji Pine Ltd pays millions of dollars back to its Landowners every year in forest levies, stumpage and ground rent. These payments help our landowner communities set up businesses and improve their livelihoods.
In addition to these yearly payments of forest levies, stumpage and ground rent, we have paid Lease Security Bonuses (LSBP) every year since 2013. This year, once again, we have paid a record amount of $7m as LSBP making the total LSBP amount of $19m in just 6 years!
These bonuses do not come from any external financial loans or Government subsidies. As a Government owned company we started off eight years ago with a philosophy of being self sufficient and standing on our own feet. Our landowner shareholders receive these bonuses simply from the prudent running of the business of Fiji Pine.
This year our Board through widespread consultations with landowner shareholders has decided to re-invest 70% of the bonuses into capital projects for the landowners. The cut-off for re-investment is a minimum of $20,000 entitlement in bonuses. The balance monies are equally distributed.
Our Landowners can choose to invest in building houses, improving water and sanitation facilities in their communities, buying machinery and vehicles for setting up a business, buying fishing boats and outboard engines, simply renting or buying space for entrepreneurial aspirations, or invest in anything with a view to long term returns. To be fair at least 50% of the land owning unit has to agree to the investment proposal.
I once again thank all our stakeholders and look forward to your continued partnership.
Vinaka Vakalevu to one and all.
May God Bless the Pine Industry.