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Maui Pineapple Co. to end operations

By Staff | Nov 12, 2009

KAHULUI — Maui Land & Pineapple Company Inc. (ML&P) last week Tuesday announced that Maui Pineapple Company Ltd. will immediately stop planting pineapple and will stop pineapple operations by the end of the year.

Major structural changes in ML&P’s other operating company, Kapalua Land Company Ltd. (KLC), are also slated.

Due to these changes, 285 employees will be laid off, primarily at Maui Pineapple Company (MPC).

ML&P expects that up to 133 employees will be offered jobs at partner companies.

The company’s goal is to make ML&P more competitive, improve operating efficiencies and position Kapalua Resort for future success.

“Unfortunately, despite our exhaustive efforts to revitalize the pineapple business over the last few years and efforts to keep agriculture jobs on Maui, market conditions have not improved and pineapple operations at MPC are not financially sustainable,” said Warren H. Haruki, chairman and interim CEO of ML&P.

MPC revamped its plant and equipment and focused on higher margin hybrid fruit in attempts to strengthen the operation.

“Since 2002, MPC has lost $115 million in this agriculture business, while investing $20 million in capital expenditures for a new fresh packing facility. Realizing that these losses could no longer continue, we spent the last year exploring options to keep pineapple operations going on Maui. Despite our efforts, it became clear that there were no other financially viable options. The painful decision to close pineapple operations at MPC after 97 years was incredibly difficult to make, but absolutely necessary. We realize this ends a significant chapter in Maui’s history — an important part of many lives, over many generations,” Haruki said.

Kapalua Land Company will make strategic changes to its business model. KLC has managed most facets of Kapalua Resort, operating accommodations, golf courses, retail, adventure activities, shuttle and maintenance services, and an organic farm.

Moving forward, KLC will streamline operations to focus on managing a world-class resort. The firm will partner with “best in class” operators in their respective fields, who can manage select assets of the resort more effectively.

New partnership arrangements, which will be finalized on or before Dec. 31, 2009, include:

1) Appointing a leading hotel/condominium management company to manage the 206-unit Kapalua Villas.

2) Finalizing an agreement to lease equipment and to license operations of Kapalua Adventures to a zipline activity company.

3) Selecting an operator to provide resort shuttle services and resort security services, both currently provided by KLC, and transition management to the Kapalua Resort Association.

4) Seeking a new operator at Kapalua Farms to continue organic farming and to lease its equipment and operations.

“We are hopeful that many employees at the affected resort divisions will be hired by the new management companies and owners,” said Haruki.

“We express our deep respect and profound appreciation to our employees for their many contributions to the company over the years.”

Mayor Charmaine Tavares said ML&P’s announcement “is very sad news for our community, especially for the employees and their families who will be affected.

“Agricultural fields are part of our heritage and have been a foundation of our island’s history. For nearly a hundred years, the company’s pineapple operations have made our community’s character unique. Working in our pineapple fields has been the source of income for many families, where high school teenagers spent their summers and where multiple members of a family worked in different parts of the operations. I have my own personal memories of summer work in the fields,” she continued.

“I’m certain that this was not an easy decision for the company to make in light of the economic difficulties affecting the world today. The county Office of Economic Development has already begun working with our state and private sector partners to pull all of our resources together and provide help for the displaced workers through job fairs, training, counseling and assistance with the unemployment process.”

Gov. Linda Lingle said it’s important to support agriculture in Hawaii to ensure food security and provide jobs.

“This is a difficult time for the employees of Maui Land & Pineapple, and the state is ready to assist those who will be displaced through our multi-agency Rapid Response Team. The hard work and dedication of these loyal employees and those before them contributed to the cultivation of the pineapple industry and agriculture on Maui over the years,” Lingle said.

“Unfortunately, while this kama‘aina company tried its best to keep its pineapple operation financially viable, the realities of today’s global economy and the worldwide agricultural market has led to this business decision by Maui Land & Pineapple.  

“Pineapple has been an integral part of Maui’s community, heritage and way of life for generations, and for many Maui residents, the plantation and cannery provided their first jobs.”

ML&P noted that Kapalua Resort has been revitalized in a multi-year effort. Improvements include the new Ritz-Carlton Club and Residences at Kapalua Bay; new Kapalua Spa; Kapalua Adventures; upgrade of many Kapalua Villas to “Gold” standard; renovation of The Ritz-Carlton, Kapalua; improvements to The Plantation and The Bay Golf Courses; restoration of Honolua Store; and the creation of an extensive network of hiking and walking trails.

Haruki said, “With these changes, KLC is now well positioned for future growth and will remain a committed steward and part of this community for decades to come.”