MAKAWAO, MAUI (HawaiiNewsNow) - Alexander & Baldwin will lay off hundreds of workers as it transitions away from farming sugar by the end of the year, it was announced Wednesday.
The news means the last sugar plantation in the state will be closing.
The company says it will instead pursue a diversified agricultural model at its Hawaiian Commercial & Sugar Co. plantation on Maui.
In a news release, A&B said it will phase out standard sugar operations by the end of 2016, retaining about half of the current staff of 675 through the end of the harvest. Employees will be laid off beginning in March, as their specific responsibilities are completed.
"This is a sad day for A&B, and it is with great regret that we have reached this decision," said Christopher J. Benjamin, A&B president and chief executive officer, who ran HC&S as its general manager from 2009 to 2011.
"We have made every effort to avoid having to take this action. However, the roughly $30 million Agribusiness operating loss we expect to incur in 2015, and the forecast for continued significant losses, clearly are not sustainable, and we must now move forward with a new concept for our lands that allows us to keep them in productive agricultural use," said Stanley Kuriyama, A&B executive chairman.
Hawaii's Congressional delegation said the closure was the end of an era, and pledged to work with state leaders to ensure those laid off found new opportunities.
"Today's announcement ... demonstrates that agriculture in Hawaii continues to evolve," said U.S. Sen. Mazie Hirono, D-Hawaii. "We must ensure that the individuals and families affected by the cessation of sugar operations are provided the assistance they need during this transition."
"They've been doing research to find out what they can get into, where the markets are, what the possible transitions are," Maui Mayor, Alan Arakawa said. "So It doesn't come as a complete surprise because we knew that this day was coming."
U.S. Sen. Brian Schatz, D-Hawaii, said he was deeply saddened by the announcement.
"For over 130 years, sugar production on Maui was more than a business, spawning a way of life and generations of hard working women and men who made our state remarkable and great," he said, in a news release.
Lani Medeiros, the wife of a sugar worker knows how much the sugar plantation means to the community.
I've been sitting in the parking lot, and before I was leaving I just wanted to make sure I took a picture, and just to look at it, look at the people that are involved." Medeiros said. "Just sad to see something that has been part of your family and part of the island for so many years. This is history. That is what's sad. "
For Rep. Kaniela Ing, D-Kihei, there's a silver lining.
"I was born and raised on Maui, and I wouldn't be here if weren't for the plantation," Ing said. "But recently I just seen the activists and the water rights and the cane burning just divide our community so much. And this is an opportunity to start new."
Meanwhile, activists are glad to see sugar production come to an end.
The group 'Stop Cane Burning' welcomes the change, saying it will improve air quality, reduce pesticide over-spraying and help Hawaii grow more of its own food. However, this does not mean they are cancelling their lawsuit for a court order to invalidate cane burning permits.
Chairman of the Hawaii Department of Agriculture, Scott Enright sees the close as a chance to move forward with the state's renewable energy initiative using wind farms.
"HC&S produces 10 percent of the electrictity on Maui County currently," Enright said. "But the wind energy providers over there have been constrained by a contract for that 10 percent. So I believe that wind energy will be able to pick up most of that as we transition from gas to wind energy."
Enright also says 28 thousand acres of the H-C and S plantation land is under state protection so that it cannot be developed.
Eventually, the other 8 thousand acres could, but that would require rezoning and other approvals that could take decades.
A&B began 145 years ago with the planting of sugar cane on 570 acres in Makawao, Maui.
The new diversified model, which A&B says will take years to fully implement, involves dividing the Maui plantation into smaller farms with a variety of uses including energy crops, food crops, support for the local cattle industry and developing an agriculture park.