Manufacturing in Fiji

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Daisy Palmer
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1 Manufacturing in Fiji Presentation to the NZFBC/FNZBC Annual Conference 12 th June 2015, Auckland Ram Bajekal, Managing Director, FMF Foods Ltd Group

2 Hari Punja & Sons Ltd (Holding Company) Subsidiaries Major Investments Flour Mills of Fiji Ltd Petroleum & Gas Company (Fiji) Limited Dominion Finance Limited Fiji Television Limited Biscuit Company of (Fiji) Limited Atlantic & Pacific Packaging Co Ltd The Rice Company of Fiji Limited Pea Industries Limited DHF Limited The Biodiesel Group (Fiji) Limited 231 Waimanu Holdings Ltd Kavika Investments Limited (Korolevu Project) Benatil Limited (Land Development) Denarau Enclave Ltd/ Denarau Peninsula Ltd Denarau Tourist Apartments Ltd FMF Investment Limited FMF Snax Limited Bakery Co of Fiji Ltd = Companies listed on SPSE

3 Hari Punja & Sons Group One of Fiji s premier business entities Turnover: ~ $ 302 million Exports: $ 80 million Employees: 1088 Fiji based but present in markets of Pacific Island Nations, Aus, NZ, USA & Canada 3

4 FMF Foods Limited Formerly Flour Mills of Fiji Ltd Listed on South Pacific Stock Exchange Part of Hari Punja & Sons Group of Companies Largest food manufacturing conglomerate in Fiji (3 Listed & 5 unlisted companies) Flour, Rice, Peas, Biscuits, Noodles, Chips, Trading, Properties 4

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7 FMF s Product Portfolio 19-Mar

8 19-Mar-2013 Presentation to the New Zealand Trade & Investment Mission 8

9 $ Million $ Million 300 FMF Group Sales 80 FMF Group Exports

10 $ Million 50 FMF Exports Aus Exports Other Exports

11 The Shifting Focus % 38% = 21%, or $ 58 m

12 PM s Exporter of the Year 2011 & 2012

13 Our Export Markets

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20 Top Class Facilities

21 Certified for Quality

22 Well trained Staff Continuous training of Factory Staff on the job and in classrooms

23 What helps and makes Brand Fiji Manufacturing Hub of PIC Quality perceived in this region as ahead of many Asian products Markets / people culturally closer to Fiji Fiji can customize offer: able to sense implied needs on things like price accommodating last minute orders smaller batch sizes compared to large manufacturers of A&NZ or Asia Price cheaper than A&NZ (currency impact on value added element) Adopt A&NZ standards therefore, A&NZ quality products at Pacific Island prices. Also, a lot of A&NZ companies operating in Fiji

24 Where we have a natural advantage Raw Material proximity: Timber / wood (furniture) Agri processing (sugarcane, pawpaw, pineapple, dalo, cassava, coconut, ginger, tobacco, herbals) Processed Marine based (e.g., Starkist, TriPacific Marine) Mining & minerals (incl cement?) Water Natural / Eco (organic, bio-tech) Dairy, meat & poultry processing

25 Other things going for Fiji Manufacture Non-price competition: Fiji perception of pure & unspoiled (water, herbal - medicinal & aromatics, cosmetics) Consumer culture similar to PICs and A&NZ (comfort in dealing, quality and disclosure standards) Strategic: Food security (Oxfam prediction) Trade Balance & forex imperatives Employment & income generation Based on EPAs, RTAs: MSG SPARTECA PICTA

26 Some Enablers Proximity (and therefore better serviced) Freight (to most islands) relative to A&NZ Relative size of market and therefore willingness to service Ready Availability Availability of Sky Pacific to advertise University of South Pacific exposure Same banks operating across the region Weighted Deduction on Marketing Expenses Growing markets as more interaction & exposure

27 Tariff protection More Enablers Educated, Trained, English-speaking workforce at an affordable cost Infrastructure Utilities, Ports, Shipping links Tax rate & Tax Incentives Corporate, Individual, Export, Mach imports, Tax Free Zone Liquidity South Pacific Stock Exchange Currency & Macro-economic indicators - favorable Livability - Law & Order, Education & Healthcare A Government that has shown it listens to Industry

28 What detracts Size of domestic market Economies of scale Productivity Inadequate supply of skilled tradespeople Access to R&D / Technology Geographic / Logistic inconvenience Wage determination Utilities cost What can comfort Pacific market Advantage on small orders Initiating Govt investment in training Budget 2016? Overseas? Planning / Holding cost Better enforcement & linkage to productivity Still lower than region Large opportunities exist for those that are innovative enough to overcome these challenges!

30 Poised to reap Demographic Dividend Median age (yrs) of total population, Fiji Melanesia Micronesia Polynesia New Zealand Chart Source: Prof Ross Guest, Griffith University, Australia. Presentation at the Pacific Conference on Finance and Investment, May 8-10, FNU Nasinu campus

31 the bottom line Fiji and Pacific Island countries need not fear the ageing population facing advanced economies. The PICs can look forward to demographic dividends that will boost growth and living standards for the next few decades Rising support ratios will boost GDP per capita and living standards by several percent over the next few decades Source: Prof Ross Guest, Griffith University, Australia. Presentation at the Pacific Conference on Finance and Investment, May 8-10, FNU Nasinu campus

32 Investments by the Hari Punja & Sons Ltd Group of Companies between 2004 and 2015 Fin Year Completed Noodles New Biscuit Plant, New Factory Distribution Building, Biscuit Main Items under Warehouse, Biscuit Line-4 8,000 ton AtPack Biscuit Line-3, FMF Group of Tunnel and New Wheat Companies Building Line-2 Chips Conveyor Creamer Line Silo upgrade, Plant from Biscuit Line-1, Factory to New Silos Warehouse $ Million (A) And in 2014: Completion in 2014 Under FMF Group: Six Silos for 24,000 Tons wheat, Bakery Co, Pkg Machines, Wheat Conveyors, IT Upgrades 21 Under Hari Punja & Sons Ltd (Direct Investment by Holding Co) - Residential Land development - Denarau 9 - "The Palms" Apartments - Denarau 21 - TP Villa - Denarau 3-3 Villas in Denarau 6 Under Hari Punja & Sons Ltd: Nasese Waters Residential Sub-division (Anticipated completion June 15: (B) Completion in 2015 Under Petroleum & Gas Co (Fiji) Ltd: Bluegas New Depot (Anticipated completion: June 2015) 6 16 (C) Total Investments by Hari Punja & Sons Ltd Group between 2004 & 2013 (10 years) $ 77 million (A) Work started; and completion by December 2014 $ 60 million (B) Work started; and completion by June 2015 $ 16 million (C) TOTAL $ 153 m

33 And just approved yesterday.. $ 40 m New Biscuit Factory!

34 25-Jul-12 34

37 Your Resources People Agriculture Dairy Oil & Gas Minerals Geo thermal Biodiscovery Manufacture Landscape Etc, etc, etc

38 Resources We have ours too. And at least one New Zealander has shown what he can do with Fijian Resources.

40 So come on over.. Thank you very much. Vinaka vakalevu Ram Bajekal Managing Director FMF Group of Companies Ph: (+679) /

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