The Fiji Sugar Corporation's debt has increased to around $310 million despite a $200 million government debt write-off in 2025, with the corporation attributing the rise to persistent annual cash flow deficits and declining sugar cane production.
Speaking before the Parliamentary Standing Committee on Economic Affairs during submissions on the Fiji Sugar Corporation's 2024–2025 Annual Report, FSC Chief Executive Officer Bhan Singh said the debt had fallen to around $200 million following the write-off but has since increased as the corporation continues to operate at a loss.
Singh says FSC faces annual cash shortfalls of between $30 million and $50 million because it is unable to generate sufficient revenue to meet its operating costs.
He says the corporation's debt continues to grow as it relies on borrowings supported by government guarantees to maintain operations.
Singh warned that if cane production remains at around 1.5 to 1.6 million tonnes and global sugar prices remain at current levels, FSC will continue to experience cash flow difficulties.
He says the corporation is looking at reducing costs through operational changes, including its rail operations and a proposal to consolidate milling operations in Viti Levu.
Bhan also told the committee that one of the corporation's major challenges is the underutilisation of ageing mills, which continue to incur high operating costs despite significantly reduced cane throughput.
He says the Lautoka Mill was designed to crush 1.2 million tonnes of cane annually but is expected to process only about 330,000 tonnes this season.
Rarawai Mill, which can process more than one million tonnes of cane, is currently handling between 500,000 and 600,000 tonnes, while Labasa Mill is operating at less than half of its designed capacity.
He says FSC continues to employ similar staffing levels and maintain the same infrastructure despite the decline in production, resulting in high fixed operating costs.
To address the issue, Bhan says FSC is proposing major upgrades to Rarawai Mill, including the installation of a new boiler and co-generation facility.
Officials said the improvements could increase crushing capacity from about 230 tonnes of cane per hour to 300 tonnes per hour, potentially allowing all Viti Levu cane to be processed at a single mill within the next three to five years.
The corporation also plans to explore diversification opportunities, including ethanol production and a refinery, once the mill upgrades are completed.
He adds that FSC has requested assistance from the Ministry of Finance to engage technical consultants to help design the project and secure funding from international agencies and climate financing institutions.
He stresses that the challenges facing the sugar industry cannot be resolved through short-term measures and called for a comprehensive national strategy to ensure the industry's long-term sustainability.
He adds that the government will need to make key strategic decisions on markets, investment and industry structure to secure the future of the sector over the next 50 years.
