A cut back in staffing, wages, overtime payments and sale of non-core assets are some of the major steps being implemented by the Fiji Sugar Cooperation in a bid to reduce overall expenditure levels by $16.3 million by next year.
FSC CEO DEO said they have embarked on major cost cutting measures in recognition of its tight financial situation and an aggressive operating budget has been set for the 2010/2011 financial year which provides for a 20 percent reduction of expenditure compared to last year.
The major cost cutting measures include a manpower rationalization which has resulted in the reduction in employees for the current crushing season from 2,623 last year to 2,015, a 23 percent reduction.
FSC's annual wage cost stood at $33 million.
Saran said measures are in place to reduce the workforce to 1,200 during the off season which would see manpower reduced by up to 40% over the next 18 months.
All overtime payments will also be eliminated.
In attempts to increase revenue, the FSC will also dispose of any surplus land, plant and equipment that have become surplus following the mill upgrade, decommissioned railway lines and all available scrap metal within 12 months.
The FSC has also requested the Fiji Electricity Authority to review the rates it pays to FSC to generate electricity as the rates have not been reviewed to-date.
Saran said FEA has been supplying electricity to the FEA grid since 1992 and gets paid 8.8 cents per unit and the recent decision by the Commerce Commission to fix the rate for Independent Power Producers at 23 cents per unit needs to be relooked at.
The FSC CEO stressed that to achieve their goals would require organisational restructure, outsourcing of non-core functions, streamlining processes and centralizing finances, human resources and technical support functions.
Story by: Roneel Lal
