ML&P to Stop Planting Pineapple, 285 Layoffs Expected

After 97 years of operations, Maui Land & Pineapple Company announced today it will immediately stop planting pineapple and will cease pineapple operations by the end of the year.  The move is part of a structural change that is aimed at making ML&P more competitive, while improving operating efficiencies, and better positioning its Kapalua Resort for future success.

Field workers unloaded pallets of pineapple at the Haliimaile and Haiku fields today, hours after learing of the company's plans to end pineapple operations by the end of this year. Photo by Wendy Osher.

Throughout this transitional period, MPC will continue to provide its existing customers with fresh pineapple.

Warren Haruki, the chairman and interim CEO of ML&P said, “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.”

Haruki said MPC has lost $115 million since 2002, in their 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,” said Haruki.  “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.

Maui Mayor Charmaine Tavares responded to the announcement today saying, “This 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,” said Tavares.

In addition to changes at MPC, KLC will make strategic changes to its business model. Until now, KLC has managed most facets of Kapalua Resort – operating accommodations, golf courses, retail, adventure activities, shuttle and maintenance services as well as a certified-organic farm. Moving forward, KLC will streamline operations to focus on management of its resort.

To achieve this, KLC 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 December 31, 2009, include:

• Appointing a leading hotel/condominium management company to manage the 206-unit Kapalua Villas.
• Finalizing an agreement to lease equipment and to license operations of Kapalua Adventures to a zipline activity company.
• Selecting an operator to provide resort shuttle services and resort security services, both of which are currently provided by KLC, and transition management to the Kapalua Resort Association.
• Seeking a new operator at Kapalua Farms to continue organic farming and to lease its equipment and operations.

Kapalua Resort recently emerged from an extensive multi-year revitalization of the resort, including completion of The Ritz-Carlton Club and Residences at Kapalua Bay, the 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 the Honolua Store, as well as the creation of an extensive network of mountain and ocean hiking and walking trails.

“The Kapalua Resort has always been one of Hawai’i’s premier resorts, but we’ve taken it to a new level. The resort’s revitalization allows us to offer a heightened level of our legendary service, which we believe will delight guests and keep them returning to our island,” 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.”

Because of these changes, the Company is legally obligated to issue a notice of termination to employees at the affected KLC divisions and at MPC under the federal Worker Adjustment and Retraining Notification (WARN) Act and the Hawai’i Dislocated Workers Act. ML&P expects that up to 133 employees will be offered employment at partner companies, while up to 285 employees will be laid off, primarily at Maui Pineapple Company. ML&P currently employs 624 individuals.

“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.”

“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,” said Mayor Tavares.  “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,” she said.

(Posted by Wendy Osher; Supporting information provided by ML&P, and The Bennett Group)