Monday, November 23, 2009
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Maui Land to end all pineapple operations and lay off 285
The company also is restructuring Kapalua Land Co.
POSTED: 09:41 a.m. HST, Nov 03, 2009
Maui Land & Pineapple Co., which has lost more than $172 million since the start of 2008, said today it will cease all pineapple operations and lay off more than 45 percent of its work force amid a companywide restructuring.
The company, which employs 624 people, said up to 133 employees will be offered jobs at partner companies while up to 285 employees will be laid off, primarily at subsidiary Maui Pineapple Co.
MLP said it will immediately stop planting pineapple and end all pineapple operations by the end of the year.
The company, which last Friday posted a $25.5 million loss in its third quarter, also said it will make strategic changes to subsidiary Kapalua Land Co. to improve Kapalua's efficiency and strongly position it for future success.
To achieve this, MLP said that Kapalua Land Co. will partner with the "best in class" operators in their respective fields who can manage select assets of the resort more effectively. Partners are being selected on their ability to reinforce Kapalua Resort's reputation for "exemplary service." New partnership arrangements, which will be finalized on or before Dec. 31, 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 well-respected zipline activity company.
>> Selecting an operator to provide resort shuttle services and resort security services, both of which are currently provided by Kapalua Land Co., 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.
"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," said Warren H. Haruki, chairman and interim chief executive officer of MLP.
Initiatives included significant investment in the plant and equipment, and focusing on higher-margin hybrid fruit and improved operational efficiencies.
"Since 2002, MPC has lost $115 million in this agriculture business, while investing $20 million in capital expenditures for a new fresh packing facility, Haruki said. "Realizing that these losses could no longer continue, we spent the last year exploring options to keep pineapple operations going on Maui. 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."
Just in the last two years, MLP has laid off hundreds of workers, replaced its top management, saw two chief executive officers resign, sold its Plantation Golf Course in Kapalua for $50 million and then leased it back, cut employee wages 10 percent and halted canned-pineapple operations to focus on the fresh fruit.
MLP reported last week that its agriculture operations lost $4.1 million in the third quarter and through the first nine months of this year had lost $12.6 million.
Maui Land & Pineapple Co., which has lost more than $172 million since the start of 2008, said today it will cease all pineapple operations and lay off more than 45 percent of its work force amid a companywide restructuring.
The company, which employs 624 people, said up to 133 employees will be offered jobs at partner companies while up to 285 employees will be laid off, primarily at subsidiary Maui Pineapple Co.
MLP said it will immediately stop planting pineapple and end all pineapple operations by the end of the year.
The company, which last Friday posted a $25.5 million loss in its third quarter, also said it will make strategic changes to subsidiary Kapalua Land Co. to improve Kapalua's efficiency and strongly position it for future success.
To achieve this, MLP said that Kapalua Land Co. will partner with the "best in class" operators in their respective fields who can manage select assets of the resort more effectively. Partners are being selected on their ability to reinforce Kapalua Resort's reputation for "exemplary service." New partnership arrangements, which will be finalized on or before Dec. 31, 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 well-respected zipline activity company.
>> Selecting an operator to provide resort shuttle services and resort security services, both of which are currently provided by Kapalua Land Co., 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.
"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," said Warren H. Haruki, chairman and interim chief executive officer of MLP.
Initiatives included significant investment in the plant and equipment, and focusing on higher-margin hybrid fruit and improved operational efficiencies.
"Since 2002, MPC has lost $115 million in this agriculture business, while investing $20 million in capital expenditures for a new fresh packing facility, Haruki said. "Realizing that these losses could no longer continue, we spent the last year exploring options to keep pineapple operations going on Maui. 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."
Just in the last two years, MLP has laid off hundreds of workers, replaced its top management, saw two chief executive officers resign, sold its Plantation Golf Course in Kapalua for $50 million and then leased it back, cut employee wages 10 percent and halted canned-pineapple operations to focus on the fresh fruit.
MLP reported last week that its agriculture operations lost $4.1 million in the third quarter and through the first nine months of this year had lost $12.6 million.
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