HONOLULU — Hawaii's last sugar plantation is getting out of the sugar-growing business, signaling the end of an industry that once powered the local economy and lured thousands of immigrants to the islands.
Alexander & Baldwin Inc. said Wednesday that it will phase out sugar by the end of 2016. Its 36,000 acre-Maui plantation will be divided into smaller farms to grow biofuels and food crops. Some of the land will be irrigated to supply pasture to local cattle ranchers.
The company says all 675 people who work for its Hawaiian Commercial & Sugar subsidiary will be laid off. About half will be retained through the end of this year's sugar harvest.
"This is a sad day for A&B, and it is with great regret that we have reached this decision," Christopher Benjamin, CEO of Alexander and Baldwin, said in a news release.
Alexander & Baldwin was founded by sugar-growing descendants of Protestant missionaries 145 years ago. Today, much of its business focuses on real estate.
Sugar and pineapple plantations run by big landowners once dominated Hawaii's economy. Sugar in particular took off after 1876 when Hawaii, which was still a monarchy at the time, won the ability to export the commodity to the United States duty-free.
Plantation owners later played a prominent role in running Hawaii after the U.S.-backed overthrow of the Hawaiian Kingdom. Plantations remained the islands' economic engine until the launch of passenger jet travel shortened the length of flights from the West Coast and triggered a tourism boom.
The plantations drew immigrants from China, Japan, Korea, the Philippines, Portugal and elsewhere to work in the fields, giving Hawaii the ethnic diversity still evident today.
Benjamin said Alexander & Baldwin "made every effort" to avoid ending sugar growing. But he said it suffered $30 million in agribusiness losses last year and expected further red ink if no changes were made.
A&B doesn't have any plans for large land sales, though it may sell some small parcels as it has in the past, Benjamin said. The entire property is zoned for agriculture, and the company plans to keep it that way.
It's not yet clear what crops will be grown on the land, Benjamin said in an interview. Sorghum and other grasses have shown promise in research trials conducted at the plantation, he said.
If successful, Benjamin said, those plans could support Hawaii as it tries to achieve food and energy self-sufficiency.
U.S. Sen. Brian Schatz, D-Hawaii, said he was deeply saddened by the news.
"For over 130 years, sugar production on Maui was more than a business, spawning a way of life and generations of hard working women and men who made our state remarkable and great," he said in a statement.
Maui Mayor Alan Arakawa said his heart goes out to workers who will lose their jobs, but the change was inevitable. "Fruit trees, taro, bio-mass, papayas, avocados and much more have all gone through trial testing, leaving us very confident that while sugar cane is dead, agriculture will remain very much alive here," he said in a statement.
Benjamin said the company was providing enhanced benefits and one-on-one assistance to help those being laid off move into retirement or a new job.