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| 7/10/08 - Govt to divest its shares in Copra Millers (Fiji) Ltd |
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Government will divest its shares in Copra Millers (Fiji) Ltd (CMFL).
An independent valuation will be undertaken to determine the purchase price and terms and conditions of sale before an “Expression of Interest” is invited.
Cabinet based its decision on a submission by the Minister for Primary Industries and Sugar, Mr Joketani Cokanasiga.
Mr Cokanasiga said that the CMFL, which is currently managed by the Coconut Industry development Authority (CIDA), has been making losses for the last seven years, averaging $200,000 per year.
“This is despite Government having made available a grant of $700,000 through CIDA to the Company.
“The Government through CIDA owns 94% of the Company, with the remaining 6% shareholding held by minority shareholders.”
Mr Cokanasiga said that the Company attributes its losses to the copra price formula fixed by CIDA, which does not allow it flexibility to make adjustments to buying price in the event of sudden downward movement in sale price of coconut oil, its main product.
“The Company also has not been able to rationalize its operations, reduce overheads or for that matter diversify in further downstream processing.”
Mr Cokanasiga said that it is evident from the losses made over the last seven years that the Company’s operations under management of CIDA are not sustainable, thus the decision to divest its shares to a private investor giving it the opportunity to manage the company.
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No:1730
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