The three months leading to the announced decision to close Amfac Sugar Kaua’i were characterized by lots of “emotional discussion. It involved people yelling at one another,” he recalled. “I think we all knew, with the problems we were facing,
The three months leading to the announced decision to close Amfac Sugar Kaua’i
were characterized by lots of “emotional discussion. It involved people yelling
at one another,” he recalled.
“I think we all knew, with the problems we
were facing, that there wasn’t an answer. But we continued to brainstorm. We
continued to try to give it time. We continued to try to look at
alternatives.
“It was not a high point for any of the management, and I’m
talking about the management at the plantation, the management in Honolulu, or
the management here in Chicago.”
About criticism from people that Amfac
has not been a good neighbor or steward, he said, “I’m sorry they feel that
way, but I completely, wholeheartedly, and sincerely disagree with them. And I
believe that we have done everything that we could possibly do to keep sugar
alive at all of our plantations, and we’re very disappointed that we have not
succeeded.
“But, I would strongly argue that there are very few players,
whether they be Hawai’i-based or Chicago-based, who would have hung in as long
as we have, and who would have tried as many different things and strategies as
we’ve tried to try to make these plantations work.”
If the workers are
honest, they’ll say the company spent many hours with them, asking them for
their input about what can be done to keep sugar viable, he said.
“I don’t
think that any company has done more to try to make it work than we have,
period,” he claimed.
Asked if the company is looking forward to the day
when all of its lands on Kaua’i are sold and the company can totally vacate the
island, Grottke responded, “The answer to your question is, as you know, Amfac
has been under a severe cash crunch for years. And, because of that, we have
had to run our operations lean and mean.
“We are very tight on staffing.
Our people are overworked. To the extent that we have less issues to focus on,
I think that that would be a positive for Amfac,” to be totally out of
Kaua’i.
Amfac’s primary focus is on 3,500 acres on Maui, in Ka’anapali,
“and we’re working on a community-based plan there. And our hope is to develop
that area. That is the real future of Amfac,” he said.
“What we are
attempting to do, and what our strategy is, is to sell off the bulk of our
agricultural holdings, use the proceeds to retire debt, and use the proceeds to
fund the shutdown of the plantations on Kaua’i and meet our obligations, and to
emerge in a year or two debt-free with 3,500 acres at Ka’anapali on Maui,” he
continued. “So, it’s not that we want to leave to Kaua’i. It’s not that we
wouldn’t like to do business there. But, we felt that our best strategy, and
our most valuable land holdings, were these Ka’anapali holdings, and we set a
strategy approximately two years ago to focus on those and basically to
liquidate or sell our other assets to reduce debt and solve the cash crunch
that we’ve been in for as long as I can remembered.”
Gratified that Gay
& Robinson aims to continue growing sugar on former Amfac lands at Kekaha,
Grottke said he doesn’t foresee the same thing happening on the former Lihu’e
Plantation lands.
“Unfortunately, I don’t think that there’s anybody who’s
going to step up and continue to cultivate sugar on the east side of the
island. I would be very happy if G&R and the state could reach an agreement
that would allow G&R to step in our shoes and take over our West Side
lands,” he said.
“That is obviously a negotiation between them, but, yes,
it would be very gratifying to see that,” he said. “Our experience with mill
shutdowns on O’ahu and Maui is that the land is not quickly or easily
redeployed in other agriculture.
“And despite the fact that you read about
many successful diversified agricultural ventures in the newspapers, the harsh
reality is that they don’t use anywhere near the amount of acres that are freed
up when a plantation closes down.”
Therefore, he said, “I would love to see
sugar continue on all of the lands, but I think that the only hope is on the
west side. And again, that’s contingent on G&R and the state coming to an
agreement.”
Of Amfac’s Kaua’i “exit plan,” he said a substantial chunk of
the $20 million in shutdown funds is also set aside for seen and unforeseen
environmental cleanups the company may encounter as it pulls out.
Since the
company has experience closing down two other plantations on two other islands,
it knows the importance of bringing in environmental experts in tackling some
problems, he said.
“We try to deal with environmental issues as they become
known. With the shutdown of a plantation, what typically happens is a complete
review and assessment of all of our lands, a physical cleanup of the properties
— and I’m not talking about environmental, I’m just talking about removing
mill structures and things like that — and when all of this is going on, there
may be some problems that we’re not aware of that crop up,” Grottke
said.
And, he added, “to the extent they do, we’ve provided a contingency
reserve in our numbers to address those issues.”
“We generally know what we
need to do. Unfortunately, we’re not proud to say this is the third time we’ve
shut down a plantation in the last 10 years,” he said. “We’ve got a little bit
of a plan. We’ve got a track record. And, I think, generally speaking, both at
O’ahu Sugar and Pioneer Mill Co., we’ve been able to address most of the
concerns of the community and the various government agencies, and we hope to
do the same here.”
Staff Writer Paul C. Curtis can be reached at
pcurtis@pulitzer.net or 245-3681 (ext. 224).
