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Fiji’s indigenous investment conglomerate, the Fijian Holdings Group Ltd, will establish new business ventures in the Pacific region as part of a strategy to grow into the region in the next 12 months, says chairman Isoa Kaloumaira.
This will be done “selectively and with prudence” in order to better manage the group’s geographical exposure risk as an investment company, Kaloumaira told shareholder’s at the group’s annual general meeting in Suva this week.
Major subsidiaries such as Fiji Industries Ltd (FIL) and Basic Industries Ltd (BIL) successfully achieved the drive for expansion and growth in the Pacific market during the 2009 financial year, said managing director Sereana Qoro.
FIL now exports cement to 10 Pacific island countries and is looking to the northern Pacific for new opportunities, said the company in its annual report.
The drive to push FIL exports into neighbouring Pacific islands arose out of a strategy to soften the effect of the slump in the local construction industry.
“Construction activity in a number of neighbouring Pacific island countries over the next couple of years is expected to be more buoyant than our local market,” said the annual report, of Basic Industries Ltd’s (BIL) efforts to expand into the region.
BIL company Standard Concrete Industries spearheaded these efforts by establishing a nine-month aggregate crushing operation in Vanuatu in March this year.
As part of the contraction suffered by local businesses following the 20 percent devaluation of the Fiji dollar in April, another FHL subsidiary, the RB Patel Group, owners of a chain of supermarkets throughout Fiji, lost close to $200,000 “in opened foreign exchange position particularly with New Zealand imports” following the devaluation.
Its stake in the RB Patel Group and a 15 percent shareholding in New World Ltd, which also owns a chain of supermarkets, give FHL a sizeable exposure in the local retail sector.
The annual report said the future operating environment in Fiji’s retail market “is likely to become more challenging” with consumers finding it hard to adjust their consumption to their current disposable income, leading to an overall fall in customer count, even though domestic prices have stabilised, the report said.
Blue Lagoon Cruises of which FHL owns 70 percent, also experienced a challenging year “in a difficult environment brought on by the global economic downturn, despite a small increase in visitor arrivals”.
The report said while passenger numbers increased slightly compared to the previous year, “yield suffered in order to remain competitive and attract clients”.
The forecast for 2010, however, was more positive, the report said, with an increased focus on sales and marketing “with particular efforts being concentrated on the Internet to maximise exposure and capture last minute bookings”.
For a year in which FHL recorded its highest profit ever with a consolidated post tax earnings of 49.7 million compared to the previous year’s $12.9 million, shareholders were told yesterday that besides receiving normal dividend payments of 20 cents for Class A shares and 10 cents for Class B shares, there would also be an extra one-off dividend of 10 cents for both class shares.
The anticipated bonus dividend payment, taking total dividends in its 25-year history to $59 million, caps off a record performing year for FHL in which dividends received by the holding company for 2009 totaled $11 million for the company, a 10 percent increase from 2008.
Kaloumaira said the divestment of 3,017,500 shares in Foster’s Group Pacific Ltd was a “strategic business decision due to its low dividend yield and declining return on investment at FHL level”.
