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Closure of Oahu's only flour mill may increase prices

By Erika Engle

POSTED:
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 The mill company has withdrawn its lease application.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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