Pineapple comes back to Maui today, when Haliimaile Pineapple Co. Ltd. takes over 1,000 acres and related facilities from Maui Pineapple Co.
Because of the New Year's holiday, the company's first day of work will be Saturday, when workers will move into the fields at 6:30 a.m. to start picking Maui Gold fruit; on Sunday they will be packing it in Kahului, said Doug Schenk, one of the six local partners in the venture.
Darren Strand, president of the new company and a former Maui Pine manager, said in a statement, "We are proud to continue the 100-year legacy of pineapple on Maui. Haliimaile Pineapple Company brings new hope for a new year by immediately saving 65 agricultural jobs, with an expectation of adding more in the future."
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The Maui News MATTHEW THAYER photo
The partners of Haliimaile Pineapple Co. will take over 1,000 acres and will be
licensed to grow the patented Maui Gold variety of the fruit, under an agreement with Maui Land & Pineapple Co.
The local investors took over part of Maui Pine's plantation operations almost without missing a beat. Maui Pine's last harvest was Dec. 23. Parent company Maui Land & Pineapple announced earlier this year it would shut down the business because of continuous, large losses.
Schenk, a retired president of Maui Pine, said Haliimaile Pine "can be profitable" by focusing on the island market.
"We are all farmers," he said in an interview.
The owners and directors of the new venture are Pardee Erdman, owner of Ulupalakua Ranch; Schenk, Doug MacCluer and Ed Chenchin, all retired Maui Pine managers; and two men who were operating directors of Maui Pine until it closed, Strand and Rudy Balala.
Schenk said Thursday that Strand and Balala had started working on forming a successor operation a year ago, well before the Maui Land & Pineapple Co. board decided to give up on pine.
About six months ago, they brought in Schenk, MacCluer and Chenchin. The five have more than 150 years' combined experience in Hawaiian pineapple.
About one month ago, Erdman joined the venture and provided the necessary financial underpinning. Besides the business interest itself, Erdman will benefit because Haliimaile Pine will provide juice for Tedeschi Vineyards, which Erdman also owns.
Further down the road, Haliimaile hopes to develop some other byproducts, Scheck said.
The company can hit the ground running, since the fields are still in good shape. It will use facilities at the Kahului cannery until it can consolidate operations at Haliimaile. That should happen by March, he said.
Haliimaile Pine has licensed and purchased assets notably the Maui Gold patented pineapple variety and leased land, equipment and buildings from Maui Pine.
Schenk says ML&P structured the arrangements so it will be possible for the new company to make a profit, although the partners are projecting losses for the first year.
The third key element in the deal was the cooperation of Local 142 of the International Longshore and Warehouse Union. A new collective-bargaining agreement will have to be negotiated, but it is expected to be similar to the one Maui Pine had.
Willie Kennison, Local 142 Maui division director, said, "We thank everyone who helped make this happen, including ML&P, Pardee Erdman and HPC's new management team for working with us to keep our people employed in the midst of this recession."
Haliimaile Pine will lease 1,000 acres, with an option for 500 to 600 acres more, all in the "Haliimaile corridor." Schenk said this will be operationally economical.
"We won't even have to use public roads," he said.
Water leases are also included in the contract.
Haliimaile has been used, off and on, for Maui Pine's fresh-pack operations, and the buildings are ready to go, Schenk said.
"Less than 10 percent" of expected sales will be to the Mainland, to be shipped to markets where Maui Gold can fetch premium prices.
The key asset of the new company is the Maui Gold label, "the best fresh fruit in the world," Schenk said.
When he was president of Maui Pine, Schenk fought an expensive legal battle to assert Maui Pine's right to the Maui Gold sweet variety, which Del Monte was trying to claim exclusively. The variety was developed cooperatively in Hawaii by Maui Pine, Dole and Del Monte, and although Del Monte is long gone from the islands, Dole also grows the fruit on Oahu, as Hawaii Gold.
Haliimaile Pine will do its own marketing, targeting local retailers, hotels and restaurants. One of the difficulties of selling pineapple is that the fruits are big, while American families are small. Schenk said that by increasing the density of plants and by managing the time of forced fruiting, a preponderance of small, "personal pineapples" can be produced.
But managing portions by processing the fruit into salsa and other products was not successful for Maui Pine. "It was very expensive," Schenk said.
By taking over some expenses from ML&P, Haliimaile Pine will provide relief to that hard-pressed corporation. Warren Haruki, chairman and interim chief executive officer of ML&P, said in a statement, "We are gratified to see the continuation of pineapple farming on Maui. The new company's simplified business model and targeted local market, along with the flexibility and cooperation of the ILWU, are key ingredients for their future success. ML&P is committed to doing all we can to help Haliimaile Pineapple Company succeed."
By shrinking and limiting itself mostly to the local market, which it will share with Dole, Haliimaile Pine will avoid the costly and troublesome storage problem that affected Maui Pine, since a fresh pine has a salable life of a couple weeks.
The issue was a dilemma for Maui Pine, which was faced with the choice of either shipping by air to get fruit to market faster, which was expensive, or cheaper sea shipping, which cut into the product's shelf life.
Island leaders reacted enthusiastically to the announcement Thursday.
Gov. Linda Lingle called the formation of the new company "welcome news for Maui and the entire state of Hawaii."
"I can't think of a better way to ring in the new year than with preservation of 65 agricultural jobs and the prospect of creating more jobs for our residents in the long term. The new company and the ongoing cultivation of pineapple on Maui will help stimulate our economy and also inject a boost of confidence in what has been a challenging year," she said in a statement.
"I want to thank the individuals who remained committed to finding an innovative way to revive pineapple operations on Maui. Their collaborative efforts will help preserve an important part of our culture and heritage, while charting a new course for the future of the pineapple industry in Hawaii."
Mayor Charmaine Tavares said in a statement: "I am extremely grateful to the company for their commitment to continue Maui Gold pineapple on Maui. I was excited to hear that nearly 70 employees will retain jobs associated with Haliimaile Pineapple Company, and I'm confident that the new company will find success. The company founders, shareholders and directors are to be commended for their work in making this happen."
Upcountry, East Maui, Molokai and Lanai Sen. J. Kalani English said the news was "wonderful."
"It's very import we keep ag lands in agriculture," he said by phone. "I was very concerned about this, so if Haliimaile Pineapple Company will take over, then it's good news for all of us in Maui, and especially good news in my district."
South and West Maui Sen. Roz Baker said by phone: "It's just the best news we could be getting at this time of year. What a great way for those 65 workers to greet 2010."
Maui Chamber of Commerce President Pamela Tumpap called the agreement "a tremendous gift to Maui, the employees, their families and all who love delicious Maui Gold pineapple."
"We are thrilled that pineapple on Maui, the Maui Gold brand, and the jobs for 65 employees have been saved," she said, adding, "Our entire community benefits from the formation of this new company, and we applaud the leaders for their vision and stepping up to the plate to make it happen, especially in these challenging times."
* Harry Eagar can be reached at heagar@mauinews.com.
