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Closure of Oahu's only flour mill may increase prices

By Erika Engle

LAST UPDATED: 05:12 p.m. HST, Mar 06, 2014

Hawaiian Flour Mills, the only flour mill on Oahu, will close by the end of the year, the mill's parent company confirmed on Thursday.

Pete Frederick, president of Pendleton Flour Mills LLC, said the mill company and the state Department of Transportation could not reach agreement on terms for lease renegotiation for the facility at 703 N. Nimitz Highway within Honolulu Harbor.

"We've worked with a lot of really good folks over there trying to come to terms," Frederick said.  

Pendleton leases not just the land, but the entire facility from the state. 

The state DOT confirmed in a written statement that it has been making changes to leases during the renewal process, including having tenants take responsibility for the equipment that is used for tenant operations. The flour mill would have been required to take possession of its grain silos.

"At the end, there were some provisions we just couldn't agree to," Frederick said, citing the silo clause and the state's planned relocation of berths for wheat shipments that currently offload next to the mill. 

"We understand the state's position in terms of wanting to improve the harbor," but having to unload wheat from another pier "was an unacceptable term with which to operate," Frederick said. The mill company has withdrawn its lease application. 

The flour mill has operated on Oahu for some 50 years, he said, though under different ownership, and its 13 employees have worked at the mill for many years. 

"We've been proud to be a part of the fabric of supplying food ingredients to Hawaiian customers for a long, long time," Frederick said. "We have a lot of great customers and they've all been notified about it."

The current lease expires March 31, but the company requested an extension through the end of the year to allow for an orderly wind-down of operations. Frederick said the mill will likely close "sometime in the fall." 

For bakeries and other food-service operations statewide, shipping heavy flour from the mainland may increase prices for Hawaii consumers, but the DOT statement indicated the state will be looking for another company to takeover operations.

Love's Bakery President Mike Walters doesn't want consumers or their wholesale customers to panic. "We have five or six months" to work out new suppliers, he said. It is premature to speculate on whether prices will increase, he said.

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livinginhawaii wrote:
Our politicians are being two faced when they say they support sustainability. Sustainability will never happen here if certain industries or products are not supported. Clearly the government had an opportunity to help in this case but stuck to their master plan for some unreported reason. There is more to this story...
on March 6,2014 | 07:16AM
lee1957 wrote:
How is this sustainablility? They are milling flour out of wheat, wheat that is not grown here.
on March 6,2014 | 10:39AM
livinginhawaii wrote:
A mill is one of the key components to a systemic production process. It does not necessarily have to be used for that specific grain if that grain is not in current production. We do have corn and other grains grown here. Wheat could be grown here because humidity is really no longer a concern. Now we will be completely dependent on the mainland or a foreign country for the entire production process of flour when we were partially independent. Independence or partial independence is one one of the requirements for sustainability.
on March 6,2014 | 11:15AM
MexMe wrote:
livinginhawaii, that kind of forward thinking isn't appreciated ;)
on March 6,2014 | 05:26PM
inlanikai wrote:
Way to go DOT! Put another company out of business and another industry out of Hawaii. Happy now?
on March 6,2014 | 07:16AM
anyway wrote:
Yikes as if we don't pay too much for everything already.
on March 6,2014 | 09:57AM
cojef wrote:
Another business driven away by bureaucratic nightmares. The 5th paragraph above cites the issue causing all the fuss. For the sake of harbor improvements the DOT wants the company to relocate the silos to another site which means additional expenses and probably away from the mill site. Currently the wheat is off-loaded next to the mill. Can only surmise that harbor improvements is a ploy to close down this enterprise and set up another business for local cronies.
on March 6,2014 | 07:40AM
MexMe wrote:
I wondered about that as well. Star Advertiser needs to follow up on why the state feels the need to make these changes. It is a working port so why relocate the unloading dock further from the mill? How is that improving the port? This article only raises more questions and Star Advertiser needs to find the answers.
on March 6,2014 | 05:24PM
Jerry_D wrote:
And yet another one bites the dust. THANK YOU Hawaii politicians...if it ain't broke, you will surely find a way to break it. I so love the way this state operates (said no one ever).
on March 6,2014 | 08:06AM
soundofreason wrote:
We can't afford any more the State's "help".
on March 6,2014 | 05:42PM
serious wrote:
Way to go!! We are maintaining our #1 Position as the worst state to do business. And now, the bakeries have to face the Jones Act in shipping. What a State!! Our Governor called a special session to appease the Gays but on this issue--where is he???? Take some leadership--there's a problem in river city.
on March 6,2014 | 08:30AM
inlanikai wrote:
The Governor doesn't care about business. If he did, he would use this simple situation to stand up for the mill and illustrate the ripple effect of the closing, not just on the business and the employees who will no longer have a job and the effect on their families but on all the people of Hawaii who will face higher food prices because of how basic flour is to the food chain. But he doesn't care. He just doesn't.
on March 6,2014 | 09:12AM
nitpikker wrote:
always thought flour was shipped in. like rice. and pasta.
on March 6,2014 | 09:20AM
lowtone123 wrote:
Me too, but then again, I didn't know they were pumping molasses to/from Honolulu Harbor either.
on March 6,2014 | 10:30AM
PokeStop wrote:
Time for a new Governor! Ambercrombie and his fellow Troll dolls have been a disaster for the state of Hawaii. I'm sure Loves Bakery is chomping its lip as now they can justify raising their prices! Pass the buck to the consumer!
on March 6,2014 | 10:27AM
Willieboy wrote:
we already pay the highest milk prices in the nation.... we might as well add bread to the list too.
on March 6,2014 | 10:39AM
96706 wrote:
Hey STATE DOT ... I hope you are PROUD of yourselves for closing down the ONLY flour plant. Thanks a lot ... now WE ALL suffer because of your idiot thinking!!
on March 6,2014 | 10:50AM
dsl wrote:
I wonder if harbor improvements really mean development ie condos, shopping malls, ets?
on March 6,2014 | 11:33AM
marine38 wrote:
I often pass by a small flour shop on N. King. Do these mom and pop places exist here for "boutique" baking or do these places not grind wheat but just bag flour bought from the big guy??? They wouldn't solve the problem but I was just curious.
on March 6,2014 | 11:58AM
sjean wrote:
This is how the free market works. Landlords are allowed to raise their rent. They are also allowed to revise the terms of a lease upon its expiration. That is the free market.
on March 6,2014 | 12:09PM
serious wrote:
This is not a free market when the State owns everything!! Socialism--Obama style!!!
on March 6,2014 | 04:57PM
Bully wrote:
It maybe cheaper for the flour to be milled in the mainland and shipped to Hawaiii in containers. I doubt if any of the savings will be passed onto the consumer, we always get the Hawaii tax added on to all of our goods.
on March 6,2014 | 12:29PM
Readitnow wrote:
Nope, container shipping costs are extremely high versus bulk grain shipments. Also, buying that much flour in bags will mean a buggier end product due to short shelf life in this humid climate. There will also be storage problems, and inventory problems, and … the list goes on and on. This will kill the small mom and pop bakeries who can't buy direct and will have to absorb additional cost buying through a broker.
on March 6,2014 | 04:59PM
Tahitigirl55 wrote:
What a shame - let the mill stay - leave our island along when it comes to all of this. I think it just boils down to someone in office taking care of their friend so that they can now get the contract. What a dirty shame. Just remember - god does not sleep and he sees all. Someday will be judgement day and all of these so call people will have to answer. God luck,
on March 6,2014 | 12:30PM
false wrote:
Another reason to give Abercrombie the boot in November. I'm voting for David Ige in November.
on March 6,2014 | 12:59PM
atilter wrote:
ever since ige threw his hat into the ring, i have been leaning that way. this fiasco just toppled me over the line. aloha, fool hobbit of a gov. all the photo ops and money won't put humpty hobbit back together again!
on March 6,2014 | 08:48PM
awahana wrote:
Another casualty of rail?

Ignorance is rampant, like lee1957 at 55 year old, is what causes the isles to be in as bad a shape as it is today.

To bring back sustainability and local produce, we need these kinds of resources, even if not native to the islands.

Wheat mill run is vital to making IMO for CGNF Korean Natural Farming. Used by progressive farmers on the major Hawaiian islands.

Most don't have a clue where or what their food is coming from, or putting in their mouth, let alone what comes out of their mouths...
on March 6,2014 | 04:43PM
Upperkula wrote:
The closing of the mill will affect Loves Bakery. Aloha Shoyu, Fresh Start Bakery, Diamond Bakery, Bakery Europa, Hawaii Bagel Co, Pizza Hut,Kings Bakery, Leonards Baker, All of those businesse buy flour from HFM every person in Hawaii will fell the hurt from this closure. The DOT (STATE OF HAWAII) just handed us the death card.
on March 6,2014 | 05:20PM
tasod wrote:
Good job to the bureaucrats - NOT! They love to shoot holes in our wallets as they sit around like fat cats.
on March 6,2014 | 05:41PM
jeffhonolulu wrote:
What is the address of thiis flour milll??
on March 6,2014 | 06:29PM
Barefootie wrote:
Oh great, so the State continues to bork the citizens of the State of Hawaii by continuing to raise the cost of living and everything associated with it! How much more must be imported, for the State to realize that they are pricing people out of paradise by what they are doing!
on March 6,2014 | 07:38PM
niimi wrote:
This is all about the Little Red Hen. Not I said the Governor. Not I said the Legislature. Well, I guess we will just have to close down.
on March 6,2014 | 08:07PM
Wazdat wrote:
This state is run by M O R O N S....
on March 6,2014 | 08:31PM
localguy wrote:
Dysfunctional DOT just shot themselves in the foot. If one company can't afford to have the grain silos moved and operate at a higher cost, how do they think a new company can make it work? Why did DOT not even mention what the "required harbor improvements" were which required the silo move? Definitely more going on than DOT will admit. Then again, when you can't even manage roads and traffic, how can you manage harbors? Stupid is as stupid does. Way to go Mini Me, another local business gone. So when are you leaving? There is no second term for you. You are outta here.
on March 6,2014 | 08:56PM
kekelaward wrote:
This Is Hawaii.
on March 6,2014 | 09:01PM
lynnh wrote:
Time to overthrow the democrats. But that will never happen because of the stupid voters out here and the corrupt, union run controlled elections.
on March 6,2014 | 11:00PM
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