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Thursday, September 14, 2000

Paia Mill closure
to cost 77 jobs

A drop in sugar prices helps
spur the move that forces HC&S
to consolidate processing

By Tim Ruel

The closing of the Paia sugar mill on Maui follows a string of shutdowns in the past five years that have left Hawaii with three remaining producers on two islands.

Hawaiian Commercial & Sugar Co., a division of Alexander & Baldwin Inc., said yesterday it would close Paia Mill and layoff 77 workers because of a recent drop in the price of sugar and a three-year drought on the Valley Isle. The layoffs -- which include 52 mill workers and another 25 HC&S agricultural employees -- represent about 8 percent of the division's total work force of roughly 940.

The mill, which is more than a century old, is scheduled to close by the end of September.

HC&S's crops, previously processed at two separate mills, will now all go through the company's larger Puunene Mill on Maui. HC&S said it had invested $20 million to remake the Puunene plant in the past two years, and that the company would not reduce the 37,000 acres that it farms on.

There are a total of 92 Paia mill workers, 40 of whom will be transferred to Puunene

The Puunene Mill will become the only operating sugar mill left on Maui, following the closure of Amfac's Pioneer Mill in September 1999.

Kauai is the only other island with sugar production, done on land owned by Amfac and Gay & Robinson. A&B closed its McBryde Sugar Co. on Kauai in September 1996.

Oahu's sugar industry ceased in October 1996, after the closure of Dole's Waialua Sugar and the year-earlier shutdown of Amfac's Oahu Sugar Co.

"As Charles Darwin said, it is not the strongest who survive, but those who adapt the quickest and the best," said Stephen Holaday, HC&S plantation general manager.

U.S. sugar prices have fallen 20 percent, or five cents a pound, in the past year, robbing HC&S alone of about $20 million in revenues, the company said. Sugar prices are at the lowest levels in twenty years.

Moreover, HC&S's monthly water deliveries have recently hit 15-year lows because of three consecutive years of below-normal rainfall on Maui. That could stunt the company's sugar production by 15,000 to 20,000 tons by the end of this year, with similar losses expected next year.

HC&S said it expects to have its revenue cut by 25 percent this year compared with last year.

Apart from closing Paia Mill, HC&S said it has frozen all nonessential capital expenditures and intensified its push for sugar programs from the U.S. government.

It is also planning to open a new fiberboard plant in November, creating 30 jobs. The composite panel board will be constructed from sugar cane fibers and marketed under the name Hawaiian DuraGreen, Holaday said.

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