APEC Gives Hawaii a Chance to Redefine its Image
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Thirty-five local businesses were named winners of the APEC 2011 Hawaii Business Innovation Showcase, a program sponsored by the APEC Hawaii Host Committee, the Chamber of Commerce of Hawaii and the four county governments.
The overall winner was Skai Ventures, the umbrella organization for the many innovative companies run by Hank Wuh. The county winners were:
Big Island Carbon
Trex Enterprises Corp.
The host committee says the winners will be able to showcase their innovation in products and services directly to visitors during the APEC Leaders’ Week in November.
The other winners were:
Avatar Reality Inc.
Cardax Pharmaceuticals Inc.
Clear Fuels Technology
Hawaiian Electric Co.
Hoana Medical Inc.
Honolulu Seawater Air Conditioning
Makai Ocean Engineering Inc.
Onipaa Kakou LLC
Outrigger Hotels Hawaii
Referentia Systems Inc.
The Queen’s Medical Center
Bigger Market, Bigger Payoff
To make money, a biomedical research company has to move its products and processes from lab to market. The bigger the market, the more profit there is to be made.
Former IBM executive turned bioengineering entrepreneur Anton Krucky says overseas corporations reap advantages when investing in American biotech companies due to U.S. intellectual-property protections and the rigorous approval process administered by the U.S. Food and Drug Administration. FDA certification is the “gold standard,” says Krucky, founder, president and CEO of Tissue Genesis Inc.
“In some ways, if your model is to be in Hawaii but do business outside of Hawaii, that’s very good,” he told University of Hawaii Cancer Center researchers. It’s typical for promising technology and biotechnology companies in Hawaii to get early funding from the U.S. Department of Defense, which is searching for innovative ways to care for its personnel and facilities in Hawaii and around the globe.
In his talk to cancer researchers, Krucky shared a business-growth chart for bioengineers.
A company’s value is measured by what someone will pay for its stock, so it’s important to move up “the valuation chain,” Krucky says, from proofs of concept and novel research to an application fitted to the new technology. “You need to get that technology out of the lab, test it in the field with preclinical trials and pretests on animals,” he said.
At that stage, a new piece of biomedical technology might be worth $50 million, he said. “If you want to go higher than that, you’ve got to place your products in the market, get the technology approvals and certifications and do clinical trials overseas or with the FDA.”
That makes a big difference, Krucky said.
Technology that might have been worth $50 million during pretrials, may be worth $300 million or $400 million in clinical trials after certification, he said.
Krucky is looking for large companies in countries such as Japan and South Korea, where TGI has partners doing testing and commercial application of its Hawaii-based technology.
Help for New Exporters
Uncle Sam is handing out timely advice to Hawaii entrepreneurs on how they can find customers and investors in the Asia-Pacific region.
Investors from Asia are looking at high-technology companies and technological processes, but they are also interested in fresh food and food processing, as well as cosmetics, health-maintenance products and tourism opportunities, according to U.S. export trade advisors.
It’s no coincidence that experts from the U.S. Department of Commerce’s Commercial Service stepped up activity in Hawaii in advance of the APEC summit in Honolulu.
According to U.S. commercial attaches whose job is helping American businesses generate sales abroad, investors in APEC member economies are looking for high-quality, new products and services that have potential for worldwide sales. Some of those investors will be in Hawaii attending the APEC summit.
“An innovative product for a global market: That’s a compelling argument for any investor,” says Suresh Kumar, assistant U.S. secretary of commerce for trade promotion.
Kumar offers this advice to Hawaii-based companies that want to reach out to the world markets:
“First and foremost, showcase your products and show what you can do. Show the various applications and commercial potential for your product. If you can show there’s a global market, you become more attractive for direct investment.”
At one government seminar in July, U.S. Commercial Service officers offered tips on how to do business with customers in Japan and Korea.
Yuri Arthur, a Japan specialist at the U.S. Embassy in Tokyo, said Japan is hungry for a variety of U.S. imports, including fresh and processed foods, and food-processing equipment. Attitudes and policies about agricultural and other imports are changing in light of nuclear contamination concerns, she said.
Since the Fukushima disaster, there has been a lot of Japanese interest in environmental and alternate-energy technology, especially solar, and in “green-data” information-storage technology. Following the disaster, there was a 15 percent dip in cosmetics sales, but business is rebounding and imported cosmetics are again in demand, Arthur said.
Mark O’Grady of the Seoul Embassy said Korea was ranked as Hawaii’s 10th largest export market in 2010. When doing business with Koreans, don’t rush into a deal, he counseled. “Build a relationship gradually.”
“Koreans,” he added, “consider business understandings open to discussion as circumstances change, so be prepared for further dialogue after the signatures.”
Based in Honolulu, John Holman’s job is to work with trade-promotion colleagues at U.S. diplomatic posts around the world to help Hawaii companies enter new international markets.
He directs the Commerce Department’s Hawaii Export Assistance Center, which is a good first stop for local companies looking to go global.
First-timers who visit the Export Assistance Center at the Hawaii Foreign-Trade Zone can discuss their business objectives and come away with contacts that can help them identify, screen and meet prospective partners, agents, distributors and customers in target countries.
Commercial Service experts say one way to get a new product into overseas markets is to participate in trade shows here and abroad so that potential buyers can see your product.
In Hawaii, the U.S. Commercial Service has given only two Presidential E Awards, the highest honor presented to U.S. firms for export success. With exports leading the way, business is growing at both winners: Cyanotech, which grows algae, and Noni Biotech International, a processer of locally grown noni fruit.
In a sunny, 90-acre facility in Kona, the privately held Cyanotech cultivates microalgae and converts it into nutrients for a world market.
A Nevada-registered stock corporation, Cyanotech describes itself as the world’s leader in microalgae technology and a high-volume producer of high-value natural products from microalgae. The products include a nutrient-rich dietary supplement for humans, a natural nutritional supplement for aquaculture and animal feed industries, and commercial phycobiliproteins, which are fluorescent pigments used in the immunological diagnostics market.
Noni Biotech International produces juice, powder, puree, concentrate and capsules from the noni fruit, while its subsidiary, Pacific Biotech LLC, conducts research on noni extracts and other plants endemic to Hawaii. The company has its headquarters and research labs on Maui and a factory in Hilo, where it buys fruit daily from more than 80 farmers on the Big Island.
Upon receiving the Presidential E Award in May 2011, David Backstrom, Noni Biotech’s president and CEO, said export sales had doubled year over year, amounting to nearly 60 percent of the company’s total sales. The company is doing business with 10 APEC economies and in talks with potential partners in five others.
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