Fiji Times Logo

Fiji Time: 8:41 AM on Friday 25 April

/ Front page / News

$26m mill

Serafina Silaitoga
Friday, April 13, 2012

TROPIK Wood Fiji Limited has spent $26million over the past six years to complete the Wairiki chipping mill, says its chief executive officer Faiz Khan.

Costs incurred also included the hiring of ill-equipped contractors that had cost the company a substantial amount of money. Mr Khan, who took over the running of the company last year, said the "substantial amount" was used to hire contractors who did not finish the job because they lacked proper knowledge of engineering work.

He said the situation forced the company to hire new contractors, subsequently having to fork out extra to pay for new contracts.

He added the poor advice by contractors resulted in the one-year extension of work at the Wairiki project, which was scheduled to have ended in August last year.

"Over the past one year, we resolved numerous contracts that were under dispute, seen non-performing contractors leave รน when pressure was put on them. They admitted not having the know-how or capacity for a project of this nature and we engaged new contractors for this project," Mr Khan said.

"We were advised by ill-equipped contractors and managers involved at that time that this project would be completed in August last year," he said.

"Neither did they have the know-how on what was involved nor did we have the capital to fund the equity of this project.

"We have come a long way since," he added. Mr Khan said poor advice on geo-technology also led to an earlier landslide in the area."

* Turn to PAGE 3

"It is always easier to build something from scratch than to complete a project with some parts on site, some partly completed in various places around the globe without ownership of title with us, and most missing without any proper design plans that took into considerations the engineering challenge of taking woodchips through a conveyor system 35 meters above sea level to port through unstable geography," he explained.

Asked on the initial budget set by Tropik Wood for the Wairiki project, Mr Khan said it would be difficult to determine the cost as the situation varied on different work carried out at the port.

However, he said the company was positive for a recovery period when Wairiki started exporting chips.

Mr Khan said the gross revenue would depend on the market but the company had projected revenue from the export of chips at around $30 million to $35 million annually.

While he admitted that it would take years to recover, the company was positive about successful growth with the chipping project in Bua on Vanua Levu.

"We can't keep dwelling on the past and we need to move on," Mr Khan said.

"We were also forced to drive profits at our Viti Levu operations so that the equity funding in excess of $4 million for this project over the last one year was made possible," he said.

"This among our other challenges such as reducing debt level by $8.7 million in one year for Viti Levu operations and funding other substantial capital projects there through cash flow," he added.

The jetty belongs to the government while the chipping mill, the conveyor and the tower belongs to Tropik Wood.

"It is always easier to build something from scratch than to complete a project with some parts on site, some partly completed in various places around the globe without ownership of title with us, and most missing without any proper design plans that took into considerations the engineering challenge of taking wood chips through a conveyor system 35 metres above sea level to port through unstable geography," he explained.

Asked on the initial budget set by Tropik Wood for the Wairiki project, Mr Khan said it would be difficult to determine the cost as the situation varied on different works carried out at the port.

However, he said the company was positive for a recovery period when Wairiki started exporting chips.

Mr Khan said the gross revenue would depend on the market but the company had projected revenue from the export of chips at around $30 million to $35 million annually.

While he admitted that it would take years to recover, the company was positive about successful growth with the chipping project in Bua, Vanua Levu.

"We can't keep dwelling on the past and we need to move on," Mr Khan said.

"We were also forced to drive profits at our Viti Levu operations so that the equity funding in excess of $4 million for this project over the last one year was made possible," he said.

"This among our other challenges such as reducing debt level by $8.7 million in one year for Viti Levu operations and funding other substantial capital projects there through cash flow," he said.

The jetty belongs to government while the chipping mill, the conveyor and tower belong to Tropik Wood.