Interview with Mr. ERIC GAN, NESTLÉ FIJI

17/12/2002 - Interview by WINNE

Question: Could you briefly outline the historical background of the Nestlé Group in Fiji?

Gan: Nestlé has a long and proud history operating in Fiji. We started with a sales office, then commenced manufacturing MAGGI 2-minute noodles in Lami factory in 1984. In 1991, we took an equity stake in a local company, Maganlal Jiwa & Sons Ltd, manufacturing sugar confectionery and snack food. We then established a Trading operating and in 2001 invested over F$10m to expand our manufacturing operation in Ba. Today we employ over 300 local staff with an invested capital over $F 35m.

How long have you been in Fiji and what is your opinion so far of the business climate in the country?

I have been doing business with Fiji for over 23 years. The business climate today in Fiji is the best I have known it to be in spite of the events of the past. The current government is highly proactive in promoting and giving incentives to foreign investors. They have been very supportive of foreign investment which is reflected in the progress Nestlé has made.

Question: What are the main challenges you have to face here and what are the main objectives you have set for yourself?

Gan: The major challenge going forward is the development of our people in Fiji. This has been the focus for Nestlé. As a result of the coups, skilled management staff, mostly Indo-Fijians, started leaving Fiji. The government is aware of this, and is supportive in the employment of expatriate managers as an interim measure during the training and development of local staff to takeover these positions.

Question: Nestlé recently relocated a factory from Auckland to Fiji, why? What are the benefits that Nestlé has received from this relocation?

Gan: We had a factory in NZ operating at 30% capacity and a factory in Lami Fiji also operating around the same level. Supported by the Fiji government's incentive scheme it made sense to consolidate the two factories into an expanded Ba site in Fiji. The result was one large cost efficient factory operating at high capacity manufacturing product for both local and export markets.

Question: What opportunities does Nestlé see in expanding operations in Fiji?

Gan: The opportunity from expansion of our Fiji operation is to have a central operation in the Pacific for us to export to the other Islands that do not have sufficient population to justify local manufacture. Fiji for Nestlé is like an economic hub supplying our customers in the Pacific.

Question: You export your products to the Pacific region, what is the importance of exports through the plants in Ba and in Lami for Nestlé's operation in Fiji?

Gan: Exports account for over 50% of production. We export all over the Pacific including Australia, NZ, PNG, Tahiti, New Caledonia and to all the smaller Islands like Tonga and Samoa.

Question: Why would you say Fiji is the crossroad of the Pacific, the economic hub of the Pacific?

Gan: Fiji is uniquely positioned geographically in the center of the Pacific region. Given the shipping infrastructure it makes economic sense to export from Fiji to the other Islands. The routes are cost competitive and there is sufficient shipping frequency to ensure continuous supply.

Question: Fiji has a negative reputation among foreign investors and now it needs to increase investments from 11% to 25% of GDP. Fiji competes with many other countries for FDI. How does the example of Nestlé help changing this perception among the International Business community?

Gan: Nestlé is able to work in most countries around the world regardless the political system. Our objective is to develop our business and create jobs in that country, we do not get involved in politics. We have managed to be successful keeping to this principle. We believe it is primarily the government's responsibility to promote Fiji to the International Business Community, however Nestlé like other businesses, is willing to support the government and play our part, since foreign investment is good for business and the country, it creates jobs and consumer demand. On request by the government I have spoken at business council forums about Nestlé's success in Fiji. By telling our story, it demonstrates to potential investors that it can be done.

Question: Nestlé worldwide process over 100 thousand tons of sugar annually. What is the relation of Nestlé with the Fiji Sugar Industry?

Gan: We are one of the major customers of the local Fiji sugar industry. It is in our interest to source local raw materials in the country where we operate, in addition to the economic benefits of proximity and cost, we help create and sustain jobs in that industry and build a strong sense of community spirit as many of our employees at the factory have family and friends working on the farms. It is good for the country and good for Nestlé.

Question: What would be your final message to our decision making audience in order to restore confidence?

Gan: My final message would be to have the courage to look beyond the politics of a country and at the higher potential returns that can be achieved. Nestlé is just one example of successful foreign investment in Fiji, there are also many other success stories in Fiji that are not mentioned in this interview. Add to this the current government incentive schemes for foreign investment and it is worth considering the opportunities in Fiji.

Question: Mr. Gan, Could you tell us a little bit more about your personal background?

Gan: I have been with Nestlé since May 1960. I worked in Malaysia and Singapore for 18 and a half years and in Nestlé Pacific Islands, out off Sydney. I have been responsible for the development of Nestlé's business since 1980, the markets comprising of French Polynesia, East and west Papua New Guinea, and all the islands state in between. I have taken up Australian citizenship many years ago and regard Australia as my home although I was born in Malaysia.

Note: WINNE cannot be held responsible for the content of unedited transcriptions.