FSC’s call for support: laughable

[posted 11 Aug 2009,1600]

FSC’s call to sugar industry stakeholders to work together would be laughable, if it were not a matter of the survival of the sugar industry.

CEO Deo Saran is now trying to sift the blame on to “politicians and growers’ representatives” for a situation FSC has created itself. He needs to ask himself:

• Is it not FSC that has shut the growers out by denying them statistics on how the mills are performing each week and how much sugar is being manufactured? Is he telling the growers that with 70% stake in the industry, they are not entitled to know how the mills are performing this season?
*Special Branch is entitled to this information but not the Growers Council. Shame on FSC!

• Is it not FSC that distanced itself from an industry solution to the financial crisis facing the South Pacific Fertilisers Ltd (SPFL) by opting out of a long term tripartite arrangement to the problem?

• Is it not FSC that unlawfully off-loaded its shares in the sinking SPFL on to the Growers’ Fund – shares that are not worth a cent today! FSC thought it could operate in splendid isolation!

• Has FSC not completely shut growers out from the industry’s marketing arm?

FSC is screwing up the growers, just as CSR used to do a few decades back, and in the same breath expects growers to co-operate.

Mr Saran’s talks of “maximising revenue for the industry” is just as ridiculous. Eight weeks into the season and the industry has already lost $20m as a result of FSC’s failure to ensure its mills were ready to begin crush. Of this, loss to growers is $14m or $5 a tonne.

Its first shipment of sugar to the UK was delayed by two weeks. When the ship finally left at the end of July it was 2500 tonnes short of a 30,000 tonne load. The second shipment is expected to leave Monday week (17 August) – FSC will only be able to ship 26,700 tonnes – a shortfall of 3300 tonnes.

Is this how FSC expects to maximise revenue for the industry??

Milling inefficiencies

Farmers are also losing heavily as a result of milling inefficiencies. The Labasa and Penang mills are now running satisfactorily after a dismal start. But performance at the Lautoka and, particularly, Rarawai mills are pathetic.

The Lautoka Mill a couple of weeks ago was showing a TCTS of 86 which means it was taking 86 tonnes of cane to produce one tonne of sugar (it should by this time of the season be about 8.5). The mill is operating at an average capacity of 60% or less. It has failed dismally to meet its 8-week crush target of 289,000 tonnes. So far the mill has barely crushed 142,428 tonnes of cane – giving a shortfall of 146,351 tonnes.

Taken at a very conservative TCTS of 14 (actual ratio is much higher), this means a sugar loss of 10,000 tonnes which translates to a minimum $4million loss to the industry to date at the Lautoka Mill alone.

The situation at Rarawai Mill is even more appalling. The mill is plagued by boiler problems – it is not creating enough heat to crystallise the cane juice.
Result: hundreds of litres of cane juice is being dumped into the Ba River creating a mighty stench, and incurring millions of dollars in loss to growers.

Little wonder FSC is not releasing to growers how much sugar has been made at Rarawai from the 66,540 tonnes of cane crushed so far this season (up to Monday 10th August). As a result of the troubled mill, the Corporation is not supplying quotas and rail trucks to harvesting gangs. One cane cutter bemoans the fact that in a three-week schedule so far he has only earned $42 – not enough to even feed his family!

And now gang sardars’ suspect they are being cheated at the Rarawai weighbridge. The equipment is believed to be giving faulty reading and should be re-checked before it creates even more instability and suspicions among growers in the area.

FSC must take sole responsibility for this mess. If it wants growers to cooperate it must change its attitude and treat the growers as equal partners, at the very least. It badly needs to restore transparency and trust in its dealings with growers.