Lessons Of Livelihood
Sony Hawaii, Trans Orbit Hawaii Inc, Maryl Group Inc, and Irwin Mortgage
Sony Hawaii Co
When asked to comment on Sony Hawaii Co.’s 2000 earnings, President Ryozo Sakai smiles modestly and says, “Fortunately we had a very nice year.” And then some. Last year, Sony Hawaii’s sales soared to $153 million, nearly a 60 percent increase over 1999 earnings of $96 million.
“Historically, Hawaii has always been a very strong market for Sony products,” Sakai says. However, as technology is ever-evolving, it is not Sony Hawaii’s history in the Islands that has enabled it to finally crack the Top 50. It is the company’s visions of grandeur in regards to its future presence here in the Islands. In a society where standard audio-visual products are so five minutes ago, Sony Hawaii has made a bold move into the “Digital Broadband Era.”
“In other words, Sony is trying to create a ubiquitous digital network,” explains Karl Okemura, vice president of Sony Hawaii’s consumer electronics group. “That means access to the Internet anytime, anywhere.” Utilizing four gateways: mobile communication, digital television and setup box, personal computers, and PlayStation 2, Sony’s goal is to become the world’s “total broadband entertainment company.”
In addition, last year Sony Hawaii increased its product distribution to the 100 military bases it services worldwide (spanning Asia, Europe and Hawaii), which also helped to drive profits higher. Sales of the highly anticipated Sony PlayStation 2, which made its U.S. debut in October 2000, weren’t as lucrative due the extremely limited availability in Hawaii.According to Sakai, its state-of-the-art ideas and products have kept Sony at the forefront of the digital revolution, and have contributed significantly to its dramatic sales growth. In particular, Sony’s memory stick – with its multi-compatibility to several different product lines – was introduced last year and has caught the popular fancy. Sakai says last year’s sales of the memory stick and all of its accompanying digital audio-visual products combined have increased more than 250 percent over the year prior.
Sakai isn’t projecting another 60 percent increase this year, rather a more humble 10 to 15 percent jump over last year’s figures. “Still,” he says, “Last year we increased sales from $96 million to $153 million, so from $153 million … 10 to 15 percent is quite a big jump.”
Trans Orbit Hawaii
Local ground tour operator Trans Orbit Hawaii Inc. may well be the next victim of the old adage, “If you can’t beat ’em, join ’em.” Over the past few years, resort destinations around the world – particularly Southeast Asia—have successfully leveraged themselves as bonafide destination competition for the Japan market, luring away thousands of would-be tourists from Hawaii, and chipping away at Trans Orbit’s bottom line. Company revenues took a 20.8 percent dip last year, as Japanese tourists opted for cheaper vacations in the wake of their country’s weak economy. Ironically, it is a decision being made by Trans Orbit Hawaii’s parent company, Japan-based Trans Orbit Co. Ltd., to open a new branch in Thailand this December, that may stifle growth even further this year.
He also has an interesting take on strengthening visitor numbers to Hawaii. According to his research, honeymooners, couples tying the knot and their wedding guests, comprise the largest segment of Japanese visitors to the Hawaiian Islands. “They also spend the most money,” he says. “So weddings are very happy events. They are making the Hawaii market and atmosphere better and hopefully if the economy gets a little better, maybe the group business will come back, and the combination will make the total number grow.“It is the same company, but maybe we should compete for customers,” jokes Issei Watanabe, vice president of sales and marketing for Trans Orbit Hawaii. He is projecting another 10 to 15 percent decrease in sales at the end of this year but hopes to bring 2002 sales figures back up or close to the $33.8 million the company reported in 2000. Watanabe says Waikiki is the mainstay for the majority of Trans Orbit’s 70,000 customers, and the recent improvements, upgrades, and renovations to the area should help drive an increase in demand for services, despite shrinking visitor counts. This year Watanabe and his team will be placing heavy emphasis on raising the quality of service and products, warranting higher prices. “Right now the market share is split very evenly, so there is a pricing war,” he adds.
After all, Hawaii is and always will be a very evergreen destination to the Japanese.”
Maryl Group Inc.
Like a steadfast climber scaling the grueling Mount Everest, Maryl Group Inc. is practicing aggressive, yet firm-footed tactics to ascend its way to the top. The Kailua-Kona-based land development and construction company posted last year’s biggest sales gain: an astounding 214.2 percent increase in revenues over 1999 figures. And heading into its 15th year in business, the company is showing no signs of slowing.
“We had quite a year, but it’s just been a steady growth from when we started operations here,” says Bob Griffith, executive vice president for Maryl Group. “It’s continuing to grow and right now we’re projecting 15 to 20 percent increases as our goal for 2001.” Maryl Group has been around since 1986, but its most profitable subsidiary, Maryl Pacific Constructors Inc., is only three years old. Since its inception, Maryl Pacific has averaged 25 projects a year and last year contributed to more than 60 percent of Maryl Group’s $82 million in revenues.
Dan Jordan, president of Maryl Pacific Constructors Inc., says the company’s remarkable growth is really just the residue of design. The successful business relationships established early on with satisfied clients of its parent company, Maryl Group, really set the stage for Maryl Pacific’s prosperity. This year, the company is working with such heavy-hitters as Alexander & Baldwin Inc. and Marriott International Inc. “Our success has been a combination of hard work, good luck and excellent clients,” he says. “But really I think our hard work has made our good luck.”The largest valued contract of its completed developments last year was a $10.5 million design/build project of the Kmart store in Kapolei. This year, the company landed a $13.5 million contract for construction of the Pearl City-based Home Depot, and will complete construction on a $22 million Worldmark timeshare development in Kihei in September. Maryl Pacific’s largest project to date, however, is a three-year design/build resort and residential project called The Villages at Mauna Lani on the Big Island. The $83 million project will take three years to complete, and is scheduled to begin late this year.
Forget about financing, lending and credit services. Stripping it down to the basics, Irwin Mortgage is simply in the shelter business, which, according to Branch Manager Mark James, is a “phenomenal” business to be in. “We have four basic necessities, and after you get air, then water, then food, you need shelter,” he says. However, phenomenal doesn’t exactly describe the company’s 33.1 percent decrease in sales last year.
Irwin Mortgage, which specializes in securing mortgage loans for minorities, immigrants, first-time home buyers and people with credit problems, slid 57 places from 102 to 159 on this year’s Top 250 list, with 2000 sales of $46.8 million. “Not to worry,” James says. He sites the capricious nature of interest rates and deflated property values for local real estate, as cyclical factors leading to the decrease. Factors that he says have turned around since the beginning of the year.
“There’s record volumes going through the systems and the market has been excellent.”“What we’re seeing now is another period of low interest rates,” he says. “Whereas 2000 was averaging 6.5 percent interest, this year we’ve come down a lot.” At an average of 5 percent so far this year, the lower interest rates should encourage consumer confidence and trigger a spike in revenues for Irwin Mortgage. James says the company will increase sales by at least 25 percent this year. “Business has been excellent since right around the first of the year,” he says.
James says the closing of Irwin Mortgage’s Kailua- and Maui-based branches in late 2000 had little to do with the decrease in sales. An increase in staff from 10 to 19 employees did, however, tighten profit margins last year. James hopes to widen the gap again this year, based on industry predictions of an increase in real estate values—primarily in Honolulu urban areas from Salt Lake to Hawaii Kai – coupled with the consumer-friendly interest rates. So far he says 2001 is looking to be an auspicious year.