Posted on: Friday, April 9, 2004

Sugar firm to reduce planting, cut jobs

By Jan TenBruggencate
Advertiser Kaua'i Bureau

LIHU'E, Kaua'i — Gay & Robinson, one of the state's last two sugar plantations, said it will suspend planting on about a quarter of its acreage, primarily because of low sugar prices.

"Prices are down $30 a ton, and for us that means $2 million less in revenue," said Alan Kennett, G&R president.

Kennett said the firm has a serious cash-flow issue, partly because of an unanticipated need to purchase the Nawiliwili Harbor bulk sugar terminal from Amfac after that company, which left the sugar industry several years ago, decided to dispose of the property.

Kennett said he told employees yesterday that between 15 and 25 jobs would be lost, although some employees may be able to transfer into vacant positions. G&R had 310 employees before the cuts.

G&R farms about 11,000 acres in sugar. Roughly 3,000 acres are former Kekaha Sugar Co. lands leased from the state. Those are the fields on which planting will be suspended. Kennett said the cane on the land will be harvested, with 1,260 acres removed this year and the remainder next year.

The company could resume planting if sugar prices improve or if there is movement in other potential sources of revenue identified by the firm has identified. Two key possibilities are the construction of a garbage-to-energy plant for Kaua'i County, which is in discussion, and the production of ethanol as a fuel.

G&R is negotiating with Worldwide Energy Group, for a plant on G&R land at Kaumakani that would convert cane trash and fibrous sugar cane residue called bagasse into ethanol. The ethanol in turn could be mixed with gasoline for use in automobiles.

The ethanol deal hinges on a local demand for the fuel.

Sugar prices have dropped in part because of the low-carbohydrate diet craze, which has reduced demand for the sweetener.

Another reason for low prices, Kennett said, is the federal government's pursuit of trade agreements that allow cheap foreign sugar producers increased access to U.S. markets.

Reach Jan TenBruggencate at jant@honoluluadver tiser.com or (808)245-3074.