In another devastating blow to the Maui economy, Maui Land & Pineapple Co. (MLP) announced its decision to end production after 97 years of plantation-scale pineapple farming on the island. The trend of pulling out of pineapple farming in Maui is nothing new as major operations like those of Del Monte and Dole relocated operations in the 1980s due to high land and labour costs. MLP, a Kahului-based land, resort, and agricultural holding company, plans to terminate new planting immediately and will cease pineapple harvesting by the end of the year.
Nearly 300 employees are scheduled to be laid-off during this restructuring, news that wasn’t as shocking to staff as expected. Still, while many employees of MLP recognized signs that the company was in financial trouble, many did not expect to lose their jobs so quickly. However, since the company estimates $115 million in losses on its agricultural businesses since 2002, executives point out that they had little choice. They could not continue operations with such staggering losses and despite exhaustive efforts there seemed to be no financially viable options for continuing in the pineapple business.
MLP is engaged in a range of industries other than selling pineapples, including operating golf resorts, vacation rentals, and real estate development, and the current economic climate has hit them hard. A combination of a decline in visitors and slowing real estate markets has negatively impacted operations in such a way that MLP was struggling to climb out of the red. Quarter to quarter losses were sparked, at least in part, by dwindling demand for real estate and required MLP to scaled down their pineapple operations but opportunities to save this portion of their business holdings were extremely limited. Essentially, real estate investment by MLP severely impaired the company as the economy took a sharp dive and the Maui real estate market followed.
Unfortunately the end of MLP in Maui likely will significantly impact the real estate market further. With another 300 citizens forced out of work, rental and sales figures are bound to take another hit. This could therefore lead to even more foreclosures and vacant rental spaces. So while the national economy appears to be on the rise, Maui has faced yet another setback that feeds the vicious cycle of market decline.
Photo Credit: Homies In Heaven
Posted in Maui Real Estate |
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January 21st, 2010 at 2:28 pm
[…] previously announced, Maui Land & Pineapple (MLP) has pulled out of the pineapple business completely at the end of […]