Maui Land happy
with tariff relief

Steel for pineapple cans will be
exempted from U.S. duties

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By Dave Segal
dsegal@starbulletin.com

That sound you just heard was Maui Land & Pineapple Co.'s executives breathing a sigh of relief.

Steel tariffs that would have put a big dent in the company's pineapple can operations won't happen now after Maui Land & Pineapple's exemption request was granted Monday by the U.S. Commerce Department and the U.S. trade representative.

"We're all very pleased to receive that great news," said Doug Schenk, president of subsidiary Maui Pineapple Co. Ltd. "We continue to get great support from our congressional delegation out of Washington. This decision is really going to assist us in keeping the pineapple business viable in Hawaii."

Maui Land & Pineapple, which stood to pay an additional $300,000 this year and an extra $1.2 million in 2003 without the waiver, has seen its pineapple business suffer in recent years. The company's pineapple division saw its operating loss grow to $3.2 million in 2001 from $2.9 million in the previous year and last quarter saw the trend continue as its operating loss of $1.1 million was 18 percent greater than the operating loss of $967,000 of the previous year's quarter.

"We didn't expect to pay this ($1.2 million in) additional money for steel, having to pay these punishing duties," Schenk said. "It's not in our business plan to pay this much for steel."

The exemption for tin-plated steel, one of 116 waivers that the Bush administration announced Monday, means that cans used by the company's pineapple subsidiary are now fully exempted.

"In these sorts of things, it's not over until it's over," Schenk said. "And although we always remained hopeful, we didn't get it in the first and second rounds of exemptions. In this business, you've got to expect the unexpected."

The company had earlier received partial relief when lithographed thin-plated steel, which is used to make the can's lid, was exempted. That material was considered a different category of material than the rest of the can because it is lithographed with the 100 percent Hawaiian logo on it.

Still, until this week's news, Maui Land & Pineapple was faced with having to pay tariffs for the steel that makes up the remainder of the pineapple can.

Maui Land & Pineapple's request for an exemption had received congressional support in a Feb. 7 letter from U.S. Sens. Daniel Inouye and Daniel Akaka and U.S. Reps. Patsy Mink and Neil Abercrombie.

The company, which operates the state's last remaining pineapple cannery, had argued that it had been unable to get the steel products it needs domestically and depended on Japan for its supply.

"This decision is a win for Hawaii's economy," Abercrombie said. "It recognizes the special situation of Maui Pine and their dependence on imported tin plate steel. We made a concerted effort to win this exemption, and I'm very pleased that we succeeded."

In March, President Bush imposed steel tariffs ranging up to 30 percent to protect the struggling U.S. steel industry from a flood of imports. More than 30 U.S. steel companies have filed for bankruptcy since 1997.

"That (tariff decision) came right out of the blue," Schenk said.

The Bush administration, which has now granted 224 exemptions, had set a July 3 deadline for decisions on its initial group of exemption requests.

The tariffs have angered more than a dozen nations, with some threatening to impose retaliatory sanctions on U.S. products. Japan, South Korea, and the European Union have asked the World Trade Organization to rule the tariffs illegal.