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The ongoing legal wrangle regarding insurance claims by palm furniture maker Pacific Green Industries (PGI) has been a sore thumb in its financial progress, the company revealed this week.
In a statement filed at the South Pacific Stock Exchange this week, PGI Group general manager Ravin Chandra said while the company expects to make a profit at the end of its 2009 financial year, its books are still haunted by the fire that consumed the company’s Sigatoka-based manufacturing factory in November 2004.
“In the years 1998 through to December 2003, PGI exports were in excess of $8 million,” Chandra said.
“In 2004 to the end of October 2004, exports broke all records. It was to be a particularly good year. However in November 2004, the PGI manufacturing factory was burnt to the ground. Today, November 2009 - five years later - because of the legal situation, PGI is still unable to rebuild its Fiji manufacturing plant. Audited accumulated losses since the fire have been in excess of $7 million.”
Since the fire, PGI has been locked in a legal battle with its insurer Sun Insurance and the ongoing costs have bitten heavily into its business operations.
Chandra said the company has yet to receive compensation from Sun Insurance as its initial success in the High Court was held back when Sun Insurance appealed against it.
Legal complication have now further delayed hearing of the case with more submissions expected by the Appeals Court from both parties.
“The appeal will be set for hearing in the March/April 2010 session,” said Chandra.
“A fixture could not be made for the March/April 2010 session because the Court of Appeal did not have the exact dates for appeal court sitting finalized yet.”
Chandra said the company expects that ongoing costs related to the fire and legal issues would be in excess of $0.5 million this year, but it is also hopeful of an end to its legal battle over insurance.
“Despite this unfortunate situation, PGI has managed to survive and even recover some of the lost opportunities. It would be nice if we could say ‘survive, recover and prosper’ but that may take a few more years. It is totally dependent on rebuilding the factory,” Chandra said.
PGI currently assembles its furniture in China and recently revealed it is diversifying into the European and Middle East market as a response to the global market downturn, which has also affected business badly.
