Dear Editor – Please allow me to respond to the article by MMF “MMF Defends Ports” from your edition of Monday 21st March.
As you know my position is to only respond where there is inaccuracy in either content or reporting, so that a ‘fair’ view can be determined by your readership.
Although MMF has every right to comment and share a point of view, I must point out the following from the biased position stated by MMF in the article.
Firstly, MMF have been rather misleading in their statement about SolRice turnover and trying to relate that to our parent company (SunRice) profits. There is no relationship between the 2 numbers and it is mischievous to try and make one.
It is fair comment from MMF that we are keen to protect our revenue stream, as business people, members of MMF would understand this to be a very normal thing for a business to do.
The difference however is that we generate no ‘smoke screens’ as suggested in the article, we have a fair, open and legitimate reason to protest the fees and inefficiency at the port and one of these is that we understand as a business that as our prices are increased by unfair and unjustifiable tariffs, our volume and profitability drops as the grass roots people of this country, loyal and long term consumers of the SolRais brand, struggle to buy our products.
By trying to protect our brand, we are also trying to protect our consumers. This is good business practice.
As a business, SunRice has an obligation to return a reasonable margin to the shareholders of the company. This is how a company survives and gains investment support from shareholders to expand and grow, again as MMF business owners know and would expect themselves. So there is no hidden agenda here.
SolRice has only 2 issues. I have been very open about these so no smokescreen when I point out firstly, we agree the Ports must invest and improve its effectiveness and efficiencies to generate flow on benefits to the people of the Solomon Islands.
Along with other business houses, some of which are named in the MMF article, we have always supported this view and been willing therefore to have tariffs increased to make this happen. However, it is the extreme level of tariff increases and the flow on effect of increased costs from shipping companies that is the issue.
Further, the fact that after these enormous increases have impacted on business, the operation at the port continues to deteriorate, which is having a double whammy effect on business in this country.
The second open point that I make on behalf of SolRice, and again MMF know this if you read this paper, is that competition is welcome. Competition is good for everybody concerned, including SolRice.
However, competition must be fair and equitable, it must follow legislative governance (such as the margin control on rice importers by the Ministry of Commerce), the fair payment of taxes and fees to meet company obligations to government (the port is tax free) and should NEVER be allowed to be managed by a monopoly that has financial control over part of its opposition input costs and this is where the Port steps over the line.
Finally, please let me point out to MMF that profit dollars are not the true measure of a company success. It is the margin the company provides. SunRice, as MMF rightly points out is a public company and thereby produces open book financial results. The turnover last year was $1.35 billion dollars and profit was $35 million dollars. That is a return on investment of 2.59%. This clearly does not signal a company that is making the massive and outrageous profits some would like to suggest. I would bet my bottom dollar that SIPA have a better return than this, do you agree?