Businesses see opportunity in Chiquita’s return
NEW ORLEANS (AP) — A hundred years ago, New Orleans was the largest importer of bananas in the United States. The presence of Chiquita’s predecessor, United Brands, allowed several local institutions — such as Ochsner Health System, Louisiana State University and Tulane University — to extend their international reach to Central and South America.
United Brands operated in New Orleans for nearly seven decades before leaving for Gulfport, Mississippi, in the 1970s. Its departure coincided with rapid growth in competing markets, such as Houston and Miami, and the erosion of New Orleans’ relationships with Latin America.
Business leaders predict that Chiquita’s return, which company representatives and Louisiana officials announced recently, could help rebuild many of those ties.
Pan-American Life Insurance Group’s origins are directly tied to the growth of the banana industry. New Orleans native Crawford Ellis founded the company in 1911 to provide personal and business insurance to people and businesses in Central and South America. Chiquita is still one of its regional accounts, so its return to New Orleans is good news for the company, Pan-American President, CEO and Chairman José Suquet said.
“I believe (Chiquita’s announcement) is as good an opportunity as we have seen in the last 40 years to help re-establish our presence in Central America,” Suquet said. “Both Houston and Miami are more expensive and busier markets. We can provide an attractive alternative compared to them.”
Business leaders and economic developers say New Orleans faces several challenges before it can compete with those markets. The lack of direct flights to Central America tops the list.
Before Hurricane Katrina, Taca Airlines operated direct flights from New Orleans to Honduras among other Central American countries. Efforts to bring the airline back failed two years ago. Since then, Greater New Orleans Inc. and the New Orleans Aviation Board have continued efforts to lure Taca as well as convince Copa Airlines of Panama to offer a direct flight to Panama City.
The lack of direct air service is a major impediment to Ochsner Health System’s ability to increase its prominence in Central America. Every year it serves approximately 3,000 to 4,000 patients from Central and South America who visit Ochsner for their health care needs.
That market could continue to grow, said Ana Hands, vice president of International and Transplant Services for Ochsner. Since the 1960s, the health system has made significant efforts to attract medical students and offer health services in Central and South America. Honduras continues to be its largest international market, but Miami and Houston are big competitors for those patients.
“We have many loyal patients who don’t want to go anywhere else and have been coming to us for the past three or four generations,” Hands said. “Younger people are more likely to go to Miami where they can get a direct flight than coming back here. It’s a big challenge for us.”
Greater New Orleans Community Data Center research shows that in 1970, New Orleans had about the same number of jobs as Houston. Over the next 40 years, Houston added about 260,000 jobs, a 200 percent increase. The increase in New Orleans was 20 percent over the same time span. The local stagnation was the result of oil and gas companies moving to Houston.
At the same time, many international businesses relocated to Miami. The city should have taken better advantage of its location at the mouth of the Mississippi River, connecting it to “north-south trade routes” that link the U.S. heartland to South America, GNO Inc. President and CEO Michael Hecht said.
“We lost these companies and industries through neglecting our ideal geography,” he said.
Suquet added that further expansion at the Port of New Orleans should coincide with the ongoing expansion of the Panama Canal in order for New Orleans to compete with Miami and Houston. Doing so will allow the city to forge and renew business links with Latin America.
“Chiquita could help the viability of building those relationships.” Hecht said. “I don’t think this is going to be an isolated event. We could build a critical mass of companies that have ties and growing business to the south.
“This stagnation didn’t happen by accident and it wasn’t predestined. But now for the first time in decades, we have strong business and political leadership.”