Chiquita got $15M in incentives to move back to Louisiana
Published: May 15,2014
Tags: Bobby Jindal, Chiquita Brands International Inc., Fyffes, Gary LaGrange, incentive, Jonathan Daniels, Mario Pacheco, Mike Reed, port, Port of Gulfport, Port of New Orleans, ship, shipping, state of Louisiana, transportation, United Brands
GULFPORT — Chiquita Brands International Inc. is returning to New Orleans from Mississippi after nearly 40 years.
Chiquita, then called United Brands, left New Orleans for Gulfport in the mid-1970s after more than 70 years in New Orleans. It is one of the Port of Gulfport’s top four tenants, according to that port’s website.
“This is a huge, historic win for the Port of New Orleans and for trade in our state,” Gov. Bobby Jindal said yesterday at a news conference with Mario Pacheco, senior vice president of Chiquita, at the New Orleans port.
The state and the port, which is a state agency, offered more than $15 million in incentives. The state offered 10 years of subsidies estimated at $1.1 million to $1.5 million a year, based on how much cargo Chiquita handles in New Orleans, and $2.2 million for a distribution and ripening facility to be owned by the port and leased to Chiquita. The port will spend $2 million to fix up a container freight warehouse and install electrical hookups for refrigerated containers.
The move will increase the amount of cargo handled at the port by about 15 percent, according to a statement from Chiquita and the state. The news release said it will bring 270 to 350 new jobs. However, Jindal’s spokesman Mike Reed said the number of directly-created jobs would be smaller.
In Gulfport, the company has 20 employees and supports the equivalent of 38 full-time longshoremen, said Jonathan Daniels, executive director and CEO of the Port of Gulfport.
On Monday, he said, the port will announce a new tenant that will bring in more jobs than those lost when Chiquita departs.
Port of New Orleans president and CEO Gary LaGrange said an earlier deal to bring the company to New Orleans in 2005 fell through after Hurricane Katrina hit and the Mississippi River Gulf Outlet, where Chiquita would have been berthed, was closed.
He said the company will pay the port about $550,000 a year.
Chiquita is expected to begin shipping through New Orleans in early 2015, the officials said.
Chiquita and Fyffes of Ireland agreed in March to merge and create the world’s biggest banana supplier, expected to generate $4.6 billion in annual sales. Shareholder and regulatory approval is still needed in both Ireland and the United States to create ChiquitaFyffes PLC, which would be headquartered in Dublin.
As United Brands Co., the company was headquartered in New Orleans until 1975.
“We at Chiquita are thrilled to return to the port and the great city of New Orleans as we implement a new shipping configuration,” said Pacheco, who supervises the company’s global logistics.
In a news release, he said Gulfport had given “great service,” and the move represents a business decision surrounding a new shipping configuration, not any dissatisfaction with Gulfport.
A letter from Chiquita’s head of North American operations informed carriers in Gulfport on Wednesday that the company is replacing its fleet with newer and larger ships to serve the Gulf and Florida markets, the Sun Herald of Biloxi reported. Chiquita’s shipping arm, Great White Fleet Liner Services, has a vessel sharing agreement with Mediterranean Shipping Company for the ships, the newspaper said.
Chiquita plans to ship 30,000 to 39,000 twenty-foot equivalent units of bananas and other fruit into New Orleans, and about the same amount of various outbound cargoes. That’s roughly the amount the company now ships through Gulfport, Daniels said. A single unit represents enough cargo to fill a container 20 feet long and 8 feet high and wide.
Louisiana is offering $18.55 per TEU to offset increased shipping and handling costs at the Port of New Orleans. LaGrange said that subsidy is for 10 years.
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