Hawaii Sugar Woes:
No Relief In Sight
Some Slight Hope?
BY DON GRAYDON AND BUCK QUAYLE
To hear the companies tell it, Hawaii's sugar industry is a heavyweight on the verge of being felled by a vicious barrage of blows.
These blows have come in the form of strikes, drought, high labor costs, environmentalists' demands, plant disease, new equipment costs, and low market prices.
The result is "decreased profitability", to steal a term used by Amfac, Inc., in announcing the chopping of 80 jobs from its sugar payroll.
On Maui, where Amfac owns the Pioneer Mill in Lahaina, it means the loss of a job for 13 salaried employees(non-union). In addition, about a dozen temporary workers represented by the mill's unit of the ILWU, are expected to be out of work as part of a job reshuffling plan.
On the statewide scene, Amfac agricultural chief Karl Berg complained last week of rising costs, the expense of complying with environmental rules, a dangerous cane "smut" disease and a costly work interruption at the C&H sugar refinery in California.
John Siemer, manager of Pioneer Mill, was no more optimistic in discussing the local situation.
For instance, Siemer pointed out that the Pioneer Mill experienced a lengthy drought this year that will cut cane yields next season. At the same time, "the price of sugar is just standing still".
As an example of spiraling new costs, Siemer cited continuing work on eliminating the mill's waste water discharge into the ocean. The program will cost $400,000 by the end of 1974.
As cane profits have declined, the profitability of other segments of the Amfac conglomerate-such as retail sales through its Liberty House chain-have increased. The tendency is to put new money where it will make more money-so Amfac's five sugar plantations are in danger of becoming the firm's "poor cousins".
So out came a corporate directive to cut costs, and the loss of a couple of dozen jobs was the result in Lahaina. Siemer said Pioneer also will be holding the construction and equipment purchase.
The 13 salaried employees losing their jobs include 12 persons who will be forced into early retirement and one man young and independent enough to find other work.
In almost all cases, Siemer said, the retirees will receive full age-65 retirement benefits, although they may not yet be 65. Most of the employees will leave their jobs Feb.1.
Among hourly employees, some 29 job descriptions will be eliminated, but a number of new ones are being added. The net result is to be the loss of 12 temporary employees and a good deal of job reshuffling among some other union employees.
The Pioneer unit of the ILWU held a stop-work meeting last week to discuss the changes.
James Ampong, unit vice chairman-in charge while chairman Don Rickard is in Honolulu for contract talks-said he would have "no comment" on the situation.
Pioneer Mill, which currently employs something like 600 persons, has an annual payroll of over $4 million. Siemer said the job cuts should save the company about four or five per cent of current labor costs.
And labor costs now represent 49 per cent of the mill's cost of operation.
The job cutting is nothing more than a stopgap measure, however. To help cut costs more, the industry is trying to find better cane varieties, more mechanized equipment, better irrigation methods, higher extraction rates.
And right on the heels of these improvements will come new labor costs from the contract now being negotiated, continued demands for a costly end to cane field burning, and more of the same old problems that have pushed the state's sweetest industry into a very sour predicament.
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Some Hope For Sugar?
Consolidation of Hawaii's sugar mills and use of the latest technological improvements to convert by-products into assets may be solutions to the industry's financial problems.
Or so it appeared to Frederick C. Erskine, chairman of the State Board of Agriculture, who predicted these trends during a brief interview on Maui, Hawaii last week. Erskine was at Kaanapali for a meeting of the Hawaiian Sugar Planter's Assn.
Erskine said that within the next three years, eight mills on the Big Island would be consolidated into four.
Plans are underway, he said, to produce paper pulp from bagasse-the cane waste material left after sugar is extracted. He said the pulp might be shipped to Japan to be used in the manufacture of paper. He estimated this might be done within five to six years.
In addition, he said other uses of the by-products are being investigated, including production of animal feeds and wallboard material.
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