Del Monte quits Kunia
At least 700 jobs will be lost as the firm phases out its local pineapple operations
» Maui firm interested in Del Monte land
Del Monte Fresh Produce's move to leave Hawaii after more than 100 years of operations will wipe out more than a third of the state's 1,800 pineapple jobs while serving as yet another example of an agricultural industry struggling to survive.
The company's announcement yesterday that it would stop planting pineapple in Kunia on Feb. 19 and phase out other operations over the next three years will affect about 700 International Longshore and Warehouse Union employees, as well as an undetermined number of nonunion positions. Del Monte's departure will leave Maui Pineapple Co. and Dole Food Co. Hawaii as the only two pineapple growers in the state.
END OF AN ERA
Del Monte Fresh Produce will leave the state after it harvests its current pineapple crop, which matures in mid-2008.
Hawaii debut: Alfred Eames arrived in Hawaii in 1898 and began pineapple cultivation. Eames started selling fresh pineapple in 1900. His company eventually became Del Monte Fresh Produce (Hawaii) Inc.
Employees: 700 members of the International Longshore and Warehouse Union, plus nonunion workers
Land: 5,100 acres in Kunia leased from Campbell Estate, with 3,100 harvested for pineapple
Remaining pineapple growers in the islands: Maui Pineapple Co. and Dole Food Co. Hawaii
Sources: www.hawaiiag.org, ILWU, Campbell Estate
Del Monte blamed its decision to leave on high costs, increased competition and its inability to obtain a long-term extension of its land-lease agreement with Campbell Estate, an assertion challenged by the estate. Del Monte was harvesting pineapple on 3,100 acres of the 5,100 acres it was leasing, Campbell Estate said.
Fred Galdones, president of ILWU Local 142, said closings of agricultural operations such as pineapple and sugar are devastating to employees, families, communities and other businesses associated with the industry.
"What I have seen over the years is agriculture struggling to be viable in Hawaii," Galdones said. "We had the past experience with the sugar companies, and we also have seen pineapple just scaling back gradually because of foreign competition."
Christine Cannella, a spokeswoman at Del Monte headquarters in Coral Gables, Fla., said the company will file a notice with the state Department of Labor and Industrial Relations next week regarding how many employees will be immediately affected. Del Monte said in a statement it is working with employees and the union on job placement and potentially transferring the company's employee housing in Kunia to the workers.
Galdones said the initial group of affected union workers likely would be the 12 employees that are part of the planting crew, as well as temporary workers.
Del Monte said its pineapple crop has a three-year cycle and that the company expects to continue harvesting and packing the fruit in Hawaii until the end of the cycle in mid-2008. Del Monte said it expects "significant volumes" this year, but would not elaborate.
In 2005, 14,000 acres of pineapple were harvested in the state, producing 212,000 tons -- split evenly between fresh and processed pineapple, according to the U.S. Department of Agriculture. A year earlier the number of acres devoted to pineapple production was 13,000, with an output of 220,000 tons -- 104,000 fresh and 116,000 processed.
"This was a difficult decision for Del Monte Fresh Produce," the company said. "Del Monte has a long history in Hawaii, developing close ties with its employees, their families and the local community."
Sandra Lee Kunimoto, chairwoman of the Hawaii Board of Agriculture, said Del Monte's decision demonstrates the critical need to designate important agricultural lands, which encourages long-term leases for agribusinesses.
"There was great hope that the switch to the newer supersweet varieties of pineapple would keep the industry profitable in the global market," she said. "However, it appears that land issues, coupled with increasing foreign competition, led Del Monte to make this business decision."
Del Monte said it was no longer economically feasible to continue producing pineapple in Hawaii because of increased planting of pineapple at lower costs in other parts of the world. The company also said its current land lease expires in December 2008 and that it has been unable to obtain an extension with Campbell Estate.
However, Bert Hatton, executive vice president of Campbell Estate, said the estate had offered in 2001 to extend the lease 10 years past 2008 with the same rent structure. The offer was rejected by Del Monte.
Then, starting in 2004, Hatton said, Campbell Estate made at least three separate proposals to allow Del Monte to acquire the land. Those offers also were declined.
Maui firm interested in land
Campbell Estate is looking at selling 8,300 acres in Kunia, including the 5,100 acres it has been leasing to Del Monte Fresh Produce, said Bert Hatton, its executive vice president.
David Cole, chairman, president and chief executive of Maui Land & Pineapple Co., said he is "unquestionably" interested in the land depending on the cost.
Cole said MLP already is familiar with the land because several of its executives have come from Del Monte, and MLP conducted farming operations on Oahu over the past year and a half to recover 5,600 tons of pineapple. The recovery effort occurred after Del Monte said it was ending pineapple production at its Poamoho Camp plantation and returning the land to the owner, the Galbraith Trust. Poamoho Camp residents, mostly pineapple workers and retirees, were told by Del Monte they would be evicted, but the land was eventually sold to developer Peter Savio with the idea of selling the 63 homes back to the camp's 300 residents.
"It's high-quality farmland, and it's an area we're most interested in evaluating," Cole said. "Part of what we're doing is diversifying into other crops. We're looking for land that is proximate to sizable markets and has excellent growing conditions with high-quality soil and a ready supply of water."
MLP has shifted its strategy during the last few years to a focus on a niche market for premium fresh pineapple, and government and institutional markets for processed pineapple. To that extent, Cole has high hopes for Hawaii's pineapple industry. MLP is modernizing its processing facility in Kahului to reduce costs and is building an adjacent $17.5 million fruit grading and packing facility that is expected to be ready in June.
"While other companies are folding up their tent and leaving the islands and giving up on agriculture, we see a promising agricultural future," Cole said. "We don't like the idea of Hawaii without a vibrant agricultural sector. If Hawaii goes brown, the hospitality business goes down. The health of the agricultural sector is very much linked to the health of the visitor sector."
Dan Nellis, operations director for Dole Hawaii, declined to comment.