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Our Side of the Story
 Darrell Askey |
Uniting mac-nut firms
will benefit all playersIn the story "Foes line up against mac nut merger" (Star-Bulletin, July 23), Jim Case, board member of ML Resources, Inc. -- which owns the state's largest macadamia nut grower -- stated, "What we'd like to have happen is that (Mauna Loa Macadamia Nut Corp.) not acquire (MacFarms of Hawaii's processing plant) but acquire the orchards."
We agree with Case that the perceived controversy regarding the acquisition of MacFarms by Mauna Loa is indeed about the processing plant and not about the macadamia nut supply.
Mauna Loa has agreed to acquire MacFarms' operations and enter into a 15-year agricultural lease of its orchards. For Mauna Loa, this transaction always has been about obtaining a sufficient supply of macadamia nuts and expanding our presence in Hawaii. That is why we have stated we are willing to divest of the MacFarms processing plant.
We believe that most of the stakeholders would agree that a processing plant owned and operated by a third party is the way to go. This third party will have a guaranteed 15-year contract to process nuts from Mauna Loa's leased orchards. Effectively, the farmers will continue to have a place, as they have now, to sell their nuts.
We also addressed many other concerns at a meeting last Thursday at the Big Island's Naalehu Community Center. In particular, we assured MacFarms' workers that no jobs will be lost and that Mauna Loa will continue to provide vital services to small farmers such as husking and product transportation.
We held similar meetings with employees of Mauna Loa and MacFarms, and we are scheduling additional meetings across the Big Island with other growers and stakeholders to answer their questions and provide them with information about the benefits of this acquisition.
Simply put, this transaction makes Hawaii's macadamia industry better able to compete in an ever-fiercer global marketplace. In 1980, Hawaii produced 90 percent of the world's maca-damia nuts. By 2004, Hawaii's share of macadamia nuts had eroded to less than 25 percent.
Hawaii's market share likely will shrink further during the next few years. New orchards in Australia and South Africa are anticipated to flood the market with macadamia nuts.
This means that Hawaii's macadamia nut growers face an uncertain future. However, we believe the acquisition and the worldwide strength of Mauna Loa's brand will bring stability to the industry.
The combined company will maintain its relationships with local growers -- some of which stretch back decades -- and continue to offer them fair payment for their crops. It is in our best interests to do so. While macadamia nuts are similar wherever they are farmed, the image of Hawaii gives our macadamia nut an invaluable marketing edge in the world.
Many private and public organizations, such as the Hawaii Visitors and Conventions Bureau, have done a first-class job of perpetuating Hawaii as a tropical paradise. Hawaii's macadamia industry has benefited from this global marketing effort and become a crucial part of the state's branding.
Mauna Loa has spent $15 million during the past three years and expects to spend $7 million more this fiscal year in marketing to preserve and enhance the value of the Hawaiian macadamia nut. Thus, the future of the farmers will not be tied to the ups and downs of the world market. Instead, the farmers will benefit from the marketing premium the Mauna Loa brand brings to macadamia nuts grown in Hawaii.
Our commitment extends into the community of Ka'u, where many macadamia orchards are located. We will enter into a 15-year land lease there. This guarantees macadamia orchards will not become "ranchette" developments that are nothing more than token farms used to support multi-million-dollar homes.
Ultimately, we want the same thing the farmers do -- a macadamia industry in Hawaii that is better able to compete in the global marketplace and an industry that pays fair prices to all growers, no matter what their size.
Darrell Askey is president of Mauna Loa Macadamia Nut Corp.