Interview with Managing Director

1. Fijian Holdings has a unique business model, similar to a concept in Malaysia.  Could you elaborate?

Fijian Holdings Limited was conceived out of a common aspiration of the Chiefs of Fiji to “accelerate Fijians’ participation in business”.  Hence, apart from the commercial drive to be successful, the company has an obligation to foster the involvement and ownership of Fijian in business.  Through their collective ownership in Fijian Holdings, the Fijians can effectively own shares in successful businesses, hence increasing their stake in Fiji’s corporate sector.  However, it is important to mention that we can only fulfil this obligation if we are commercially successful.

So this model allows Fijians to indirectly have a stake into a diversified portfolio of large and successful companies. The alternative is for them to own shares directly into these businesses, which first of all is highly unlikely given that most of these companies are private and secondly will expose them to a more risky financial situation.  We have 20 years of existence and I firmly believe that our model together with its key underpinnings have stood the test of time.

This is very similar to the Permodalan Nasional Berhad concept that they successfully have in Malaysia, although the level and nature of government assistance in Malaysia is much stronger.

2. Government assisted with a $20 million injection in 1989.  Apart from this, what else proved to be the key drivers of FHL success?Government through the Fijian Affairs Board   provided assistance in the form of the $20m investment in 1989.  Whilst this was the impetus to our share acquisition, we would not have been successful if our business model was wrongly structured.  Our business model is underpinned by these three critical factors:

• A stringent investment criteria, which allowed us to build a strong portfolio of equities;
• Good composition and dynamics from the Directors, which gave prudent and clear direction for the company; and
• Lean structure driven by a strong and dynamic management team.

3. How would you sum up the progress in the last 20 years?

Using financial results as a yardstick, there is no doubt that FHL is very successful.  Fijians can now identify themselves with successful and big businesses in Fiji.  In addition to this growth, ordinary Fijians have directly benefited from close to $37m in dividends paid out by the company to date. 

FHL Group assets are now approaching the $200 million. From initial capital of $30 million, Fijian Holdings has achieved close to 4 times growth in our shareholders funds, with net assets now at $113 million.  Supporting this net asset base are our investments in 25 strong companies diversified amongst key sectors in Fiji’s economy.  These milestones are phenomenal in the drive to enhance and empower the participation of indigenous Fijians in the country.

4.  One of your key objectives is to create business leaders.  How are you doing this and what kind of business leaders are you creating?

FHL runs a Management Training Program, which is the entry point for this objective.  The company is also putting together a Succession Plan for middle and executive Management for the Group.

At present, Fiji is in great need for strong leaders both in business and government.  These are leaders who are committed to Fiji’s cause and have the resolve to carry through new ideas amidst uncertainty.  There is a need for leaders in Government who can sacrifice short-term interests for the sake of establishing a clear way forward for Fiji.

Business leaders also need to make some compromises and really hard decisions to bring back confidence.  As you know, FHL undertook two major investments in amidst the crises in 2000, against a backdrop of uncertainty.  These were the acquisition of Blue Lagoon Cruises Limited and the construction of a new eight story building in Suva.  We suffered an immediate dilution in our investment ratios for two years, but we have now begun to reap the benefits of these investment.  I am certain that we made the right investment decision, and have contributed significantly to restoring confidence in the country.

 5. What are the company and Group’s intention in the near future?

Fijian Holdings will continue to pursue its original objective of fostering Fijians’ interests in business.  From a commercial perspective, it means that we will continue to accumulate wealth and increase value to our shareholders.  We have successfully done this in the past through the underpinnings explained above.  We will not change these but will introduce new strategies to achieve renewed growth for Fijian Holdings.

Some of our immediate strategies are:

• Move towards a new structure that will allow us to better determine results at the Group level.
• Pursue consolidation of common services within the Group to derive cost savings at Group level.
• Introduce human resources development programmes at Group levels as part of succession planning to identify and train our business leaders.
• Unlock value from and diversify the earnings base in our properties investment.
• Increase stake in the Information Technology, Energy and the Telecommunications sectors.
• Improve the quality of existing portfolio by divestments of small investments and clear exit options for non-performing investments.
• Look at offshore investment as an opportunity for growth and diversification.

The above strategies underline a shift in our investment management approach from passive to a more active management particularly in determining outcome from our subsidiaries.

6. Where do you see FHL in the next 5 years?

In the next five years, I want to see that the profitability of the Fijian Holdings Group reaches $15M to $20M with an asset base in excess of $200M.  This requires the company to significantly expand in the next five years.  This growth is to be achieved both by acquisition and organic growth.  Therefore, I foresee the Company to continue to be a dominant force in Fiji’s corporate sector and continue to provide satisfactory returns to shareholders.  I must emphasise again that the Company was established to accelerate Fijians’ interests in the corporate sector and the Company must continue to grow to achieve these wishes.

7.  What concluding message can you give for this interview?

There is no doubt that FHL has been successful in its first 20 years and I am privileged to have being of service to the company for the last 17 years.  I am also fortunate to have worked and mentored by some prominent people, from whom I have greatly benefited both professionally and personally.  My Chairman, Mr Lyle Cupit has been a mentor over the years and source of experience.  I have also had the honour to work under Mr Laisenia Qarase, Ratu Jone Kubuabola, Mr Josaia Mar and the late Mr Josevata Kamikamica in their capacity as directors for FHL. 

I should also acknowledge the contributions of all the employees of FHL Group and I wish them well in the next 20 years.