Fiji Forest Industries Limited (FFI) will close its operations 22nd May 2019. FFI has been in an insolvent state over the last decade.
FFI is a native specie plywood and veneer mill and the main reason for its insolvency status is the non-availability of native specie logs.
FFI was never established as part of the pine industry. It was a company purchased in 2002 and has turned out to be a bad investment. FFI has been operating through financial support provided by its parent companies. Every effort has been made to revive the company over the past decade however the challenge of resource is beyond FFI’s control.
The 100% dividend holding shareholders of the parent company are the pine landowners who lease their land for pine plantation. The money that the parent companies have put into FFI to cover its losses over the years is money taken from pine landowners.
Through widespread consultation undertaken by Fiji Pine Trust, the trustee of pine landowners, a decision was made to close FFI. This decision was made after over a decade of parent companies’ support.
FFI’s inability to meet its statutory and supplier commitments exposes it to criminal and winding up proceedings. The parent companies are sorry that they cannot continue to run FFI under such state of affairs.
Considering the financial status of FFI with $9.5 million in liabilities, under a liquidation process FFI’s employees will not get anything.
However, in line with our policy of care towards all our workers, the parent companies of FFI will pay redundancy packages to 220 workers depending on their years of service. The total cost to the parent companies for this redundancy package and leave entitlements is a substantial $3m.
A MOU on the redundancy package was executed between FFI and National Union of Workers.