One of Hawaii’s biggest seed research and production companies plans to start consolidating operations next year in a move that will shift where the state’s largest crop is farmed.
DowDuPont Inc. announced to its roughly 280 full-time Hawaii employees Wednesday that it will close facilities on two islands and cut an as-yet undetermined number of jobs while also investing in and expanding other facilities over the next three years.
The reorganization follows DowDuPont being formed in August through a $130 billion merger of Dow Chemical and DuPont that is projected to save the global company $3 billion a year.
In Hawaii, prior Dow operations on three islands will be closed, including the only presence on Molokai for DowDuPont. A prior DuPont facility on Oahu also will be shut down.
Executives of Delaware-based DowDuPont said reopening and upgrading one previously closed facility on Kauai is designed to make the company’s
Hawaii business more efficient and
productive.
“At the end of the day, Hawaii will still be a strategic location for DowDuPont,” said Jose Luis Hernandez, the company’s global leader for seed development research.
Laurie Yoshida, a DowDuPont spokeswoman in Hawaii, added that the amount of money the company spends in the state after the consolidation should be about as much or only a little less than what Dow and DuPont spent separately before.
An initial phase of the transition is slated to begin between April and June, and will shutter three prior Dow facilities while also investing about $12 million to improve and reopen a prior DuPont site.
Specifically, the first phase will shift research and development work on Molokai to Waimea and Kekaha on Kauai, shift seed production in Kaumakani on Kauai to Waialua on Oahu, and shift research and development in Kaumakani to the nearby Waimea and Kekaha sites.
A second phase will involve ceasing research and development work at a prior DuPont facility in Kunia on Oahu and consolidating it at the two surviving Kauai facilities starting in May 2019.
Hernandez said the number of jobs lost hasn’t yet been determined. But he added that there will be opportunities for employees on Molokai, Oahu and Kauai to take new jobs on Kauai, and that DowDuPont jobs also will be available outside Hawaii.
DowDuPont owns or leases 4,000 acres on Kauai, 2,850 acres on Oahu and
450 acres on Molokai. The company would not provide a breakdown of employees by island.
Though the company’s footprint on Molokai is smaller than on Kauai or Oahu, the impact from reorganizing there will be relatively large because Molokai has more limited job opportunities. Molokai had the highest unemployment rate in the state in October —
5.1 percent, which was more than double the rate of other islands and the
1.9 percent state average, not adjusted for seasonality.
Warren Watanabe, executive director of the Maui County Farm Bureau, said it’s concerning that a company providing a critical mass supporting agriculture on Molokai is leaving the island, but he added that it will free up improved farmland and facilities for other farmers.
More broadly, the DowDuPont moves represent a third major change in
Hawaii’s seed crop industry in less than two years.
Earlier this year, Switzerland-based agribusiness
giant Syngenta sold its Hawaii operations to Wisconsin-based Hartung Brothers Inc. after a chemical company in China bought
Syngenta. And last year, U.S. seed company Beck’s bought former facilities on Kauai from Germany-based BASF.
Seed companies have operated in Hawaii for about
50 years, producing new
varieties of plant seeds — mainly corn — that they then mass-produce on the mainland and sell to farmers.
Since 2006, seeds have been the state’s biggest crop as measured by farm spending (because the Hawaii-grown seeds aren’t sold).
DowDuPont, Syngenta, Beck’s and Monsanto are the main players in the industry, which the U.S. Department of Agriculture estimates spent $145.3 million on work in Hawaii last season.
Some residents revile the industry for its use of
genetic modification, chemical use and other practices. Supporters appreciate that seed companies keep prime farmland in productive use and create high-paying research jobs.
The companies are here because they can plant any time of year and complete three to four crop cycles annually compared with just one on the mainland. Hernandez said this speeds development of new viable varieties that can take six to eight years to produce.
Pioneer Hi-Bred International was the first company to establish seed research and production facilities in Hawaii in 1968 on Kauai.
DuPont acquired Pioneer about 20 years ago.
DowDuPont, which grows mainly corn but also soybeans and sunflowers, has decided to focus research and development on Kauai, but previously shifted some work there to Oahu in 2015 when it closed a prior
DuPont research and development facility in Kekaha that included 3,500 acres of land and affected 34 employees. This facility will be upgraded with building renovations and automated shade houses that will generate higher production volume, the company said.