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The Tables Turn

Theophilus Harris Davies, founder of Theo H. Davies & Co. Ltd., would be pleased to know that his company, a century and a half after its establishment, ranks No. 28 on the Top 250 list, with $172 million in gross annual sales. What the late Englishman wouldn't understand, though, is that the company makes it millions selling pizza, tacos and heavy machinery in Hawaii and the Mariana Islands.

THINK OUT OF THE BOX: In addition to operating Taco Bell and Pizza Hut stores, Henry Katsuda, president of Theo H. Davies & Co. LTD., and his team have secured the Hawaii development rights for Long John Silver's and A&W All American Food restaurants. Photo: Kent S. Hwang

You see, once upon a time, Theo H. Davies was a diversified company, much like its Big Five counterparts. It traded goods among the Islands; it led the insurance, transportation and sugar-cane industries. But, according to Henry Katsuda, president of the company today: "Theo Davies was the smallest [of the Big Five]. The others grew tremendously in the 1950s and 1960s, but Theo Davies was heading south. Quite frankly, it was floundering at the time."

In 1973, a Hong Kong-based British company named Jardine Matheson & Co. acquired Theo H. Davies. The international parent created a global strategy, divesting operations where it was necessary. Jardine is also the parent company of Jardine Hawaii Motor Holdings Ltd., which ranks No. 74 on the list.

Theo H. Davies then exited the sugar industry. In 1984, it sold Hamakua Sugar Co. to one of its executives. It then secured the development rights for all Pizza Hut and Taco Bell restaurants. "That was a huge statement, a significant part of Theodavies' business," Katsuda says. "It left the sugar business and invested in the fast-food business, which was totally unheard of by any of the Big Five here." The company operates 86 Pizza Hut and Taco Bell restaurants in Hawaii, Guam and Saipan.

Heavy machinery distributor Pacific Machinery comprises 50 percent of Theo H. Davies' sales. It has seen tremendous growth over the past few years, thanks to the residential boom on the Neighbor Islands and tourism-related developments.


Rank '83              15
Sales '82 ($Mil)     $156
Rank '03              28
Sales '02 ($Mil)     172

Theo H. Davies' sales grew just 4 percent from 2002 to 2003, but executives are optimistic about the next few years. In April 2002, they acquired the Hawaii development rights for Long John Silver's and A&W All American Food restaurants. In the next three years, they have plans to open at least 10 locations on Oahu and on the Neighbor Islands. "It's a pretty aggressive plan," Katsuda says. "The sites that we're looking at are primarily free-standing, pretty significant assets, with drive-throughs."

The expansion should go as planned, as long as Theo H. Davies continues to share the same philosophy as its parent company in Hong Kong. "Its philosophy is to stick to businesses that you know well and continue to show opportunities for growth," Katsuda says.

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