We have once again been told that the 2019 sugar cane production will be up to 3 million tons. This was promised some years back and in fact the target was 4 million tons. However, the reality is that we are stuck at 1.69 million tons as of 2018. We were also told by the CEO of FSC at the start of the 2018 crushing season that the mills were ready to crush and that inspections of the mills were conducted by auditors from abroad who gave the thumbs up. What we actually saw was that Rarawai and Lautoka Mill kept breaking down and trucks from Ba were sent to Lautoka Mill and vice versa when these break downs occurred at additional cost. For years now we are continually told that the industry is on its way up and doing well. Recovery and mill performance is improving and we will increase cane production. This is all a pure propaganda.
The reality is that in 2018 only 1,696204 tons of cane was crushed. The TCTS (tons of cane per ton of sugar) was 10.59 compared to 9.04 in 2017. An increase of 1.55 tons of cane to produce the same amount of sugar. Therefore, FSC produced 160,234 tons of sugar at 10.55 TCTS when it could have produced 187,708 tons of sugar had it maintained the 2017 production of TCTS 9.04. A shortfall of 24,474 tons of sugar. This equates to a loss about $16.48m at $600 a ton. The farmer stand to lose the lions share at $11.53m (70%) while FSC lost $4.9m.
Look at it the other way, to produce 27,474 tons of sugar in 2017 at TCTS 9.04, FSC would have had to crush an additional 248,365 tons of cane. The cost of sugar cane with subsidies is about $120 per ton as widely published by FSC and Government. This means that FSC wasted $29,804m in buying sugar cane that did not produce any sugar. Quite apart from the sugar sales, taxpayers money is being used for subsidies. Someone must be accountable for this.
We note that the recent audited accounts of FSC that have been published shows an operating loss of $24.626m, yet FSC made a consolidated trading profit of $844,000. The question that arises is what key transactions led to a $25m turnaround from an operating loss to a consolidated profit> This has not been explained in light of the poor performance and losses incurred as a result of decline in productivity. Did FSC record land sales in 2017-2018 and what were the amounts? Was there a reversal of impairment losses and if so what were the amounts written back into the books? Having seen that there was a decline in the mill performance, there can hardly be a writing back of impaired losses. This needs careful examination as these profits appear to only be paper profits as we have seen in the past years. Subsidies from Government also needs to be recorded in the accounts. What we see here is a total lack of transparency and accountability. We have been taken for a ride for far too long in the sugar industry. Livelihoods have been put to risk with the current state of affairs in the industry. Workers for years have not been given their fair share and have had their real wage decline by more than 30% over the past years. Yet we continue to make grand pronouncement on cane production, mill efficiency and paint a rosy picture of the industry. It is time to get real and honest. Juggling the books don’t improve anything including lives of those involved in the industry. We want honest answers to these questions.
NATIONAL UNION OF WORKERS