Grace Pacific sells its assets to TileCo, the state’s largest concrete-block manufacturing company.
Although Grace Pacific closed its Concrete Products subsidiary in October, the corporation’s future earnings will not be affected, says president and chief executive officer Robert Wilkinson. The Concrete Products subsidiary accounted for less than 3 percent of Grace Pacific Corp.’s 2001 sales.
“The business was a diversion from our main businesses of mining and asphalt paving,” he says, adding that the decision to close the subsidiary was based on economic projections of continuing in business vs. sale.
“Grace’s business in Concrete Products dropped over 30 percent since 1995 on a steadily declining basis, and 20 percent in the last year,” Wilkinson says. Concrete Products’ remaining assets were sold to Tileco Inc., the largest concrete-block manufacturing plant in the state. With the closing of the subsidiary, only five concrete block-manufacturers continue to operate in Hawaii.
“We benefited from it,” says Tileco President Dennis Sakamoto. “The past few years, the industry hasn’t been as well as we’d like it to be. There hasn’t been enough business for two block companies, so that (closing) helps.”
In the weeks after the closing of Concrete Products, Tileco experienced a slight increase in business, which had been relatively flat in previous years. The recent boost in business could help Tileco later this year, when Sakamoto says Tileco may see a drop in product demand due to the state’s current economic crisis.
“Usually construction follows further down the line, about five to six months, because most of the projects are already bid on or underway,” Sakamoto says. “It’s future projects that people may tend not to construct – worrying about what their business may look like or if their people will lose their jobs – so they may not want to build. That’s our concern further down the line.”
Tileco can manufacture more than 20,000 concrete blocks a day at its fully automated plant in Campbell Industrial Park, Sakamoto says. The facility can run longer hours to bump that amount up by another 50 percent to meet the recent increase in business.
Tileco, founded in 1967, produced the patented Keystone Retaining Wall System blocks used to line the portals of the H-3 Freeway.
Grace Pacific Corp. recorded revenues of $56.3 million in 2000, placing it at 132 on Hawaii Business’s list of the state’s Top 250 companies.
Some of Grace Pacific’s high-visibility projects include the Waikiki Ala Wai Promenade and various Honolulu parks. Grace Pacific bids on all major asphalt highway and road-paving jobs in the state, which is the corporation’s major source of income, Wilkinson says.
As of November last year, Wilkinson says that Grace Pacific’s construction activity had not been severely affected by the state’s economic downturn. He expected, however, that delayed construction projects would have an impact on the corporation early this year.
Last August, Grace Pacific Corp. acquired Dillingham Construction Pacific Ltd. – a hot mix asphalt, road paving and precast concrete business, which provided the corporation with about $90 million in annual revenues. That acquisition is operated as the Grace Pacific subsidiary known as Hawaiian Bitumuls Paving & Precast Inc.
The state’s four other manufacturers of concrete blocks are Maui Blocks Inc. in Puunene, West Hawaii Concrete in Kailua-Kona, James W. Glover Ltd. In Hilo and Hale Kauai Ltd. in Lihue.