Implementing Agency:
Department For International Development (EAPD)

Project Code: 208-502-003	Start Date: 28-Mar-95	End Date: 01-Mar-97
Commitment: £169,816	Status: Completed	Type of Funding: Bilateral - TDR

Project Background:
The Government of Fiji began planting pine on degraded grasslands in the 1950s, in an effort to rehabilitate the land and prevent further soil erosion. The areas planted are leased from the native land owning groups. The planting proved successful; later, a species of pine, Pinus Caribaea was introduced and proved particularly suitable.

The former Fiji Pine Commission was corporatised in January 1991. Fiji Pine Ltd is now a public company wholly owned by Government and landowners, and headed by a Chief Executive who reports to a Board of Directors. There are 14 Board Members of whom 8 are appointed by Government, 6 by the landowners.

The core business of FPL is to grow and sell trees. It does this by growing, managing and protecting the forest resource. FPL has a Government directed commercial mandate to maintain the highest attainable level of performance and profitability in order to achieve a target rate of return of 3% on its investments in wood growing and processing. However, the company has also been charged with responsibilities for environmental improvement and ensuring that benefits from its activities are equitably distributed among the rural community.

In terms of forest management, FPL attempts to ensure the sustained availability of improved woodflows that enable it to attain the company's financial objectives, while at the same time addressing relevant environmental issues.

There are two fundamental questions facing FPL: whether it can be both financially viable and economically efficient.

Although it has a modest operating profit, it has not reached the point where is can meet operating costs, development expenditure and debt service obligations from internal revenues.

If concessional finance is secured and if the Vanua Leva resource is developed (52,000 ha plantation) and exploited, the company will achieve its modest target financial rate of return of 3%.

A second consideration is whether the environmental and social benefits generated by the project are sufficient to justify the low target financial rate of return.

Project Objectives:
To assist FPL in improving the quality of its forestry management operations (institution strengthening).

Intended Outputs:
Effective and environmentally sensitive management at sub-division level.

Successful HRD programme producing trained personnel.

Increased and beneficial participation of landowner companies in Fiji Pine Ltd (FPL) activities.