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The Honolulu Advertiser
Posted on: Saturday, August 14, 2004

Foremost to suspend milk plant

By Sean Hao
Advertiser Staff Writer

Foremost Dairies-Hawaii yesterday said the shutdown of its milk production facility in Kalihi later this month shouldn't affect the availability and cost of fresh milk.

The company told its 125 or so workers this week that it will suspend milk processing and packaging Aug. 24 through September and possibly longer as it assesses the condition of its factory. That will result in the loss of about 30 jobs, said Bahman Sadeghi, part-owner of Foremost. Foremost will continue to distribute milk, yogurt, cottage cheese, sour cream and ice cream manufactured by others under the Foremost brands in the interim, he said.

Foremost brand milk will either be processed and packaged on the Mainland or by competitor Meadow Gold Dairies, Sadeghi said. As a result, the availability and price of fresh milk in Hawai'i shouldn't be affected, he said.

"None whatsoever," Sadeghi said, about any decline in production. "Otherwise we wouldn't be able to make money. We just won't be producing here."

The shutdown of the milk-processing portion of the business was necessitated by equipment problems and a recent order by the Department of Health preventing the use of certain milk storage facilities, he said. Sadeghi said those issues have not affected milk quality.

"This is the whole reason we're doing this: to preserve quality," he said. "It's only the production that we're temporarily closing down as we evaluate our processes and do some repairs."

Whether Foremost will again process milk locally will be evaluated during the shutdown. The answer will depend on the cost of making needed repairs and whether former Foremost owner House Foods Corp. is willing to pick up some of the tab, Sadeghi said. Sadeghi said he was unaware of some of the plant's problems when he and other investors purchased Foremost from House in January for an undisclosed sum.

"There are many possibilities that could come about," Sadeghi said. "It could take longer (to make repairs) or cost too much money to take care of this."

The planned shutdown of Foremost's milk production would leave Meadow Gold as Hawai'i's only major milk processor. As of yesterday Foremost was negotiating with Meadow Gold for milk processing and packaging services. Meadow Gold spokeswoman Jackie Smythe said there should be no milk supply problems in Hawai'i.

"From the Meadow Gold perspective, there's no shortage of milk," she said.

Foremost's move shouldn't directly affect the prices local farmers receive for their milk, because the state sets minimum farm prices. However, should Foremost opt to import more packaged milk, local farmers could see some demand diminish, unless Meadow Gold cuts back on milk imports. Nearly half of the milk consumed in Honolulu is now imported from the Mainland, compared with only 20 percent in 1999, according to the state Department of Agriculture.

Smythe wouldn't speculate on how Foremost's milk plant closure would affect farmers.

"We'll continue to work with our local farmers as we always have," she said.

As for Foremost's workers, the major concern is that the shutdown may be permanent. Ron Kozuma, business agent for the Teamsters and Allied Workers Local 996, which represents about 105 Foremost workers, said the union feels that Foremost's outsourcing of milk production is in violation of its contract. He said the union is seeking legal advice on whether it can prevent the shutdown.

"We are going to challenge this potential closure," Kozuma said. "Like any plant, there's always equipment problems. When we talk to our members, they say milk can still be produced there.

"Worst comes to worst, (we want to ) ... try to find them other jobs in the dairy or even outside the dairy" industry, Kozuma said.

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.