Fiji Sugar Exec Pushes for Breakup
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SUVA, Fiji (AP) _ A top executive of Fiji’s state-owned sugar company called Tuesday for quick government action on a company-backed restructuring proposal that he said was critical to the survival of the island’s 120-year-old sugar industry.
John McFadden, managing director of Fiji Sugar Corp., pushed for action on a plan the company submitted to the government last October that would break up Fiji Sugar into four stand-alone companies, one for each mill that the company operates.
The new companies would be owned by cane growers, sugar mill workers and indigenous Fijian landowners, with the government retaining a small stake.
The government has still not responded to the proposal because of the ``incredible″ politicization of the sugar industry, McFadden told reporters.
``We have a national crisis on our hands and it is about time we got on with it,″ he said.
Sugar accounts for 7 percent of the nation’s gross domestic product and 18.5 percent of its foreign currency earnings.
According to McFadden, a former Australian sugar industry executive, almost a quarter of Fiji’s 840,000 people depend either directly or indirectly on the industry.
After losing 37 million Fiji dollars ($17.1 million) in the last two years, Fiji Sugar continued to operate only because of a loan and guarantee from the government to cover operations until March 31, 2003, McFadden said.
McFadden said the European Investment Bank, Asian Development Bank and commercial banks would back the restructuring plan if it was clearly a business proposition and not a social rescue plan.
Fiji presently enjoys guaranteed access to the European market for more than one-third of its sugar output at a price heavily subsidized by the European Union. But the European Union has said it will wind back its support starting in 2007.
Fiji’s production costs are now around 14.3 U.S. cents a pound. It would be unable to compete at present world market prices of 5.5-6 U.S. cents per pound.