SOUTHERN Cross Foods Limited (SC Foods) made a $10million settlement in Suva yesterday for the transfer of government shares in Fiji Dairy Limited to its new owners.
Prime Minister Commodore Voreqe Bainimarama received the purchase price of Fiji Dairy Ltd on behalf of government following the signing of the sale and purchase agreement last week.
Attorney-General and Minister for Public Enterprises Aiyaz Sayed-Khaiyum said SC Foods — a subsidiary of CJ Patel Group — would now own 80 per cent of the dairy company and the 20 per cent retained by farmers who are members of the Fiji Co-operative Dairy Company Ltd (FCDCL).
"We are very excited about this particular divestment of shares by government bringing in the private sector into the dairy industry. Also it creates a separation of the processing arm from the production arm which is international best practice," Mr Sayed-Khaiyum said.
SC Foods chief executive officer Vishwa Sharma said this had been the single largest investment for Southern Cross Food — the initial investment of about $25million in the industry.
"So we are obviously very committed to make this industry work. We do not see ourselves only as the processor of dairy in the country. We actually want to take the leadership role in the development of the dairy industry in the country and for that, I'd like to thank the government for having faith in us and taking us to be the partner to lead the dairy industry in the country," Mr Sharma said.
There are conditions of the sale, which include that FDL, under SC Foods;
* will at least for the next 10 years purchase all the milk produced by Fiji Co-operative Dairy Company Ltd (FCDCL);
* FCDCL would in turn sell all its milk to FDL;
* SC Foods, in purchasing FDL, will take over the company's liabilities at $17million;
* On top of taking over the debt of FDL, SC Foods would pay a minimum of $10million for the purchase of the shares from government.
Furthermore, as part of the conditions subsequent, SC Foods will by December 31 commence work on a 350 acre dairy farm in Waidina involving a minimum of 150 cows.
It would also, within four months of settlement, install two chilling centres in the Western Division and within three years upgrade and modernise the plant and machinery at the existing factory.
To this, Mr Sharma yesterday said the set up of chilling centres in the western parts of Viti Levu was in progress.
"We have already ordered three chilling centres and paid 75 per cent deposit on them," he said.
He said it would be in the country in the next 10 weeks.
"So we are well ahead with our commitments in meeting those requirements," Mr Sharma said.
"In terms of setting up the dairy farm, we again have relevant approval from the Ministry of Health in terms of all the check offs for the herd, and we are now setting up the milking sheds and trialling out zero grazing farming of dairy at our Waidilo farm," Mr Sharma said.