The daily newspaper Hoy reports that Dole Dominicana, a wholly-owned subsidiary of Dole Fresh Fruit International, Inc., has started relocating its Dominican operations to Costa Rica and Honduras after registering cumulative losses in the region of US$30 million for the last two years due to a downturn in production levels. According to the paper, the news of Dole’s imminent departure has already been confirmed by its technical department.
A source that spoke under condition of anonymity revealed that the company’s local subsidiary has accumulated losses totaling some US$22 million over the last 15 months, making its current financial position very delicate.
Rumors, which have been circulating, indicate that Dole has started to move heavy equipment to some of its subsidiaries in Central America. The list of equipment to be transferred includes power generators, cranes, bulldozers, and containers. The company has already dismissed 40 percent of its technical personnel and a good number of its plantation workers.
According to the Journal of Commerce, Dole signed a 25-year contract with the State Sugar Council (CEA) in 1987, under which the company agreed to give the government a 3 percent share of gross revenues in exchange for use of land, in addition to a fixed US$1.5 million annual payment. The company invested US$41 million to start up its pineapple operations in the northern provinces of Monte Plata and Sánchez Ramírez, and its total investment currently exceeds the US$220 mark.
Dole encountered many hurdles obstructing its operations on Dominican soil. Although the government had promised to deliver 13,000 acres, the company only received 11,000 of which only 6,500 acres were fit for pineapple cultivation. To offset the steep import duties on machinery and spare parts, it applied for free-zone status without success. Although the pineapple growing remained profitable for the first three years, the subsequent heavy losses have forced executives to reconsider the soundness of the investment.
Dole’s officials have met twice with the government authorities who are seeking to negotiate an agreement to transfer part of the pineapple processing equipment to the CEA to continue running the operation. This runs counter to recommendations from the WTO to the Dominican government concerning the need to privatize state companies.