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Troubled agency faces $8 million budget cut

SUVA, Fiji (Fijilive, June 30, 2010) - The Fiji Sugar Corporation (FSC) has revealed embarking major cost cutting measures aiming to reduce its expenditure by FJ$16.3 million [US$8 million] provided in the Budget for 2010 and 2011.

FSC chief executive officer, Deo Saran stated this is due to FSC’s tight financial situation following an investment of FJ$150 million [US$76 million] on the mill upgrade program along with other factors.

He stated strategies will be put in place to reduce wages cost which currently totals to FJ$33 million [US$16 million].

"FSC has already embarked on a manpower rationalization which has resulted in reduction of its employees from 2,623 to 2,015 in the crushing season, a reduction of 23 percent over the previous year," Saran said.

"Measures are in place to further reduce the workforce to 1,200 during off-season and 1,500 during crushing season which will result 40 percent reduction over the next 18 months.

He established major motor vehicle rationalization program has been put in place which will result in reduction in vehicles by 35 percent, from tomorrow and surplus vehicles will be disposed.

FSC is also taking measures to supplement its revenue stream by disposal of non-core assets, review of electricity rates and increase its cane production.

Saran indicated this move was necessary to accommodate the European Union (EU) sugar price declining by 36 percent from October 1 last year following reform of the EU Sugar Regime.

"Also, the 2009 season did not perform to expectations resulting in operating loss of around FJ$30 million," he said.

He then revealed the sugar mills have now been upgraded and have the capacity to crush over 4 million tons of cane annually.

"However, the current level of cane production is around 2 million tons which is 50 percent of the mill throughout requirement," Saran said.

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