Alexander & Baldwin is one of the Big 5 companies that traditionally ran the State of Hawaii. A&B’s major lines of business include Matson Shipping, real estate sales and leasing, and Hawaiian Commercial & Sugar Company. Sugar once defined A&B, but since the late ’90s the fields have contributed nothing to the bottom line. From a corporate viewpoint, HC&S is a land bank. One of their recent Annual Reports listed over 11% of their 60,000 ag acreage on Maui as available for near term urban development. (Click to enlarge plots)

A&B Revenue

Whether they farm or develop, A&Bʻs business needs water. Their 100 year old East Maui Irrigation subsidiary supplies most of their needs, the rest purchased from Wailuku Water. In either case, stream water is diverted into ditches, very little being left to support downstream farmers or fresh water fish stocks. The ditch system supply is total dependent on rainfall, which has been on a downward trend for several decades. Although their cultivated acreage has dropped by thousands of acres, and now use drip irrigation, these changes arenʻt reflected in their water draw. There is anecdotal evidence that the company is dumping water to justify a continuing share of water resources for their post-agricultural plans.

A&B Net Revenue

In Hawaii, all fresh water resources are considered a public trust, and the State Water Commission has been slowly moving forward to reallocate water resources to other uses, such as the Maui County Department of Water Supply, taro farmers, and stream maintenance. During October, HC&S mobilized some of its 700 remaining employees to fight to continue the company’s current water draw by appearing at news conferences, Commission meetings, and with letters to the Maui News, casting the issue in terms of well paid jobs that would be lost if existing sugar cane acreage can’t get water.

A&B Margin

Unfortunately, a look at the books tells the tale. It seems clear that A&B is biding its time, keeping its ag operations on life support as they transfer cane fields to their very profitable real estate development and leasing unit. In the meantime, I’d argue, the HC&S field and sugar mill staff are being used in a PR campaign to retain claim to millions of gallons of public water.

Data source: http://www.alexanderbaldwin.com/investor-relations/financial-reports/

Advertisements