1 - American Memory

133
HILO COAST PROCESSING COMPANY
p. o. BOX la
PEPEEKEO. HAWAII 96783
A STRIKE SITUATION CLOUDS AN OTHERWISE SUCCESSFUL LAUNCHING
At the end of December, the Hilo Coajt Processing Company, a
processing cooperative, will complete its first year of operation. From the
•taindpoint of sugar production and operating costs, its members can consir'.er
it a successful beginning of a new venture but row a strike to which the Conpany
is not a party is beginning to cloud the future outlook.
The United Cane Planters' Cooperative with its 414 small cane grower
members, a fifty percent owner of the Hilo Coast Processing Company, p: oduced
approximately thirty percent of the 1972 crop of 126, 300 tons of sugar, whiVe
the two plantation companies, Mauna Kea and Pepeekeo, who are owners ot the
other fifty percent produced the balance of the crop or approximately sevei.ty
percent. Costs are slightly better than anticipated; hence, when considered
along with a favorable sugar production result, the members view the year as
a successful beginning of trying to Heep sugar a viable activity on the Hilo Coast.
There is the cloud of concern on the horizon as a result of a strik; by
the Boilermakers' Union (AFL-CIO) against some of the contractors performing
critical construction work for the Cooperative. The strike has been undciway
for three months and has stopped work on the Pepeekeo power plant project, the
Pepeekeo factory modernization and pollution control work, with the exception
of excavation work and the Papaikou factory prototype dry cane cleaner project
being installed for the purpose of controlling waste water and surplus cane liber
pollution of the adjoining ocean area. The Hilo Coast Processing Company is
projecting capital expenditures of $21. 800, 000 by the end of 1974 for its modern-
ization and pollution control program. A goodly portion of the expenditures for
pollution control will return no profit to the members, only an added operating
cost that will exceed five dollars per ton of sugar produced. Fortunately, anti-
cipated annual power sales revenue of approximately $1, 000, 000 per year will
help to pay for some of the capital expenditures made for pollution control
purposes. By 1974 the annual interest alone on loans made for capital expenditures
will exceed $900,000. This is a costly and ambitious program, but necessary
for survival of sugar on the Hilo Coast if the Company is to meet its pollution
commitments. Anticipated dollar returns to the members are marginal at best,
and when a situation develops which causes delays in the tight capital program
the already marginal returns will become even more marginal.