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Hawaii’s Natural Energy Laboratory fuels innovation

Companies at the state’s Natural Energy Lab are expanding and innovating

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Cyanotech’s 90-acre facility, packed with long, relatively
narrow algae ponds, is the largest at NELHA.
Photo: Courtesy Cyanotech, Courtesy of Big Island
Abalone Corp

Cyanotech Corp.

Think big, go big

When microalgae producer Cyanotech opened a 5-acre facility at NELHA in 1984, it was one of the park’s first tenants. Today, it is the largest tenant, with 90 acres. “I guess our growth says we must be doing something right,” says Gerald Cysewski, Cyanotech’s chief science officer and executive VP.

Cyanotech produces health and nutrition products from microalgae, which the company says contain many nutrients and grow much faster than land-based plants. The company has developed proprietary production and harvesting technologies that eliminate many of the stability and contamination problems frequently encountered in microalgae production using deep seawater. It has 69 large culture ponds filled with microalgae at different stages of development that are used to manufacture two products: Hawaiian Spirulina Pacifica, a blue-green algae, which, Cysewski says, contains more than 100 nutrients and is known for its superior health benefits, and BioAstin, which is packed with antioxidants and is said to have anti-inflammatory applications.

From April through June, Cysewski says Cyanotech generated $5.95 million in revenue and its BioAstin sales increased 97 percent over the same period a year earlier. He says the value of Cyanotech’s combined sales make up about 50 percent of the state’s total aquaculture exports. This year, the company received the prestigious President’s E Award from the U.S. Department of Commerce for its export success. Cysewski estimates half of the company’s products are sold in the U.S. and the other half are exported to about 50 other countries.

“We probably sell an excess of 20 million tablets a year of Spirulina and bulk powder through Nutrex Hawaii, a wholly owned subsidiary of Cyanotech,” Cysewski says, “and we’re currently making investments to expand our business.

“Fortunately, we didn’t see a drop in sales during the economic downturn. In fact, we’ve seen steady growth. In tough times, people start turning to supplements to maintain their health instead of going to the doctor.”

Workers at Big Island Abalone conduct a final quality inspection
before the shellfish are exported to Japan.
Photo: Courtesy Cyanotech, Courtesy of Big Island
Abalone Corp

Big Island Abalone Corp.

Focus on quality

Big Island Abalone recently completed a multimillion-dollar expansion that more than tripled its production capacity, from 1.5 million abalone a year to 5 million. Now, the company has 450 tanks filled with abalone – everything from babies to adults ready for harvest – and is growing its only algae for feed.

“We are the only ones in Hawaii raising live abalone, so we have an advantage in the local market,” says CEO Hiroshi Arai. “But most of our product – between 60 and 70 percent – goes to Japan, the biggest consumer of live abalone, but there is a lot of competition.”

He says his Kona-raised abalone does well in a crowded market because, “We are growing the best quality species from Northern Japan and our facility at NELHA offers prime growing conditions that are among the best in the world.”

Big Island Abalone wholesales to more than 30 high-end restaurants in Hawaii, including Alan Wong’s, Morimoto and Restaurant Suntory. Unexpected revenue has come from sales at the weekly Kapiolani Community College Farmers Market.

“It’s very popular among locals and tourists,” Arai says. “We sell out every week.” Prices there range from $2 to $11 per abalone, depending on the size. Arai says he is grateful for the local business, especially since Japanese sales have slumped this year.

“When the Japanese economy begins to improve, we are confident that our sales will, too. We’ve already seen some positive signs, so the timing with the completion of our expansion couldn’t be any better.

Photo: Couresy Cyanotech, Courtesy of Big Island
Abalone Corp

“Our hope was that, by increasing our production capacity, we would increase the (size of the) pie, be able to sell more and be more profitable. Now all we have to do is keep our fingers crossed. Whenever something good or bad happens in another part of the world, it just shows us how we are all interconnected, because it affects us, too. ”

NELHA’s operators

Big investment in economic development

Even with so much activity at NELHA, the park is only operating at 50 percent capacity, so one of NELHA’s top priorities is marketing to draw more tenants, says Gregory Barbour, NELHA’s new executive director.

“We need to improve our presence in the community, especially at trade fairs, and make this place more attractive, so that others will want to come here to start a business or conduct their R&D,” he says. “Leasing more land and broadening our base would help our existing tenants by lowering costs.”

NELHA doesn’t provide incubator-type services, such as business counseling, Barbour says, adding, “We’re not a place for basic research. But, we are designed for R&D and demonstration and we see potential in many areas, especially in office rental and as a demonstration site for national labs. This really is a one-of-a-kind place.”

NELHA is a state agency attached to the Department of Business, Economic Development and Tourism. It was created in 1974 as a site for OTEC R&D. Today, it generates all of its income from lease rents and does not receive any money from the state, but a lot of state money was spent to get it going. Next to the construction of the Hawaii Convention Center, NELHA is the largest single investment – about $120 million – in economic development by the state of Hawaii in the past three decades, says Barbour.

That’s money well spent, he adds, since “there are so many innovative companies here selling one-of-a-kind products in Hawaii or doing cutting-edge research that’s sparking global interest.”


Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

Old to new | New to old
Nov 22, 2011 02:04 pm
 Posted by  mstraub

OTEC is really gaining momentum all over the world. For example, the Bahamas are committed to building the first 2 commercial OTEC plants. The work at NELHA deserves a lot of credit for making it possible. It looks like other Caribbean nations are jumping on board and wanting to build OTEC plants of their own. Keep track of all the latest news and info at The On Project.

Mar 27, 2012 04:15 am
 Posted by  kingneece

Our University of Alabama patented personal solar desalination product (U.S. Made) uses no electricity, can be taken anywhere and extracts pure water from any contaminated water source. It removes radiation, fluoride, salt, pesticides, bacteria, dirt and other contaminants from any water source.

Jul 18, 2012 01:29 am
 Posted by  herryponting

Good one for the nice idea.

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