Neighbor Islands: Across the State

2002 was a mixed bag for Neighbor Island companies

August, 2003

This year, a total of 34 Neighbor Island companies rank in the Top 250 list, with combined gross annual sales of $1.73 billion, or 6 percent of the list’s total sales.

Strong performers owe their blessings to low-interest car and home loans. King Auto Center Inc., a Kauai company that ranks No. 140, witnessed a 108.6 percent boost in gross annual sales ($50.7 million) over the past year. Maryl Group (No. 80), a Big Island real estate and construction company, also saw a 7.7 percent boost in sales. Some companies also did well, thanks to visitors from the U.S. mainland. Take, for example, the Maui Marriott Resort & Ocean Club Maui, which primarily caters to domestic travelers. The Marriott saw its own sales jump from $30 million to $34 million in the past year.

There were a handful of Neighbor Island companies that had very little reason to rejoice, on the other hand. The Maui Medical Group, whose sales last year plunged 21.2 percent, continues to be at the mercy of escalating health care costs. The company ranks No. 242, with $17.5 million in gross annual sales. “Health care costs are projected to go up even more,” says Dr. Guy Hirayama, president of the medical group. He says the company is working to improve its in-house technology, which, in turn, will improve the quality of patient care. “Getting control of that is the trick,” he says. Another Neighbor Island company that has felt the brunt of rising healthcare costs is Hale Makua, a community for Maui’s elderly. Its sales dropped 4 percent to $23.9 million, bringing it from No. 218 to No. 216 on the list.

Other Neighbor Island companies that did not do so well, owed their poor performances to inclement weather. Take MacFarms of Hawaii (No. 198), for example. Outside the company’s headquarters on the Big Island, rows of macadamia-nut trees fight to stay hydrated despite a drought that has plagued this area of South Kona for a number of years. The heat spell brought 22 inches of rain in the year 2002, enough to produce 3.7 million kernels of nuts. However, farmers are worried about the upcoming season. Only 11 inches of rain fell from May 2002 to May 2003. “We’re still desperately chasing water,” says Rick Vidgen, president of MacFarms, which had $27 million in gross annual sales, a 12.9 percent drop from the previous year. Once it secures a loan and government grant, MacFarms plans to build three wells that will supply water to the 3,900-acre farm and neighboring community. “We’re trying to help ourselves, but it would be better if it would rain,” Vidgen says.

Now, if only the rain could fall on MacFarms the way visitors pour into the Maui Marriott Resort & Ocean Club Maui. The Marriott, which saw a double-digit increase in sales in 2002, ranks No. 169 in this year’s Top 250 list. “We’ve had a strong demand in our market, which has been transient visitors, while other hotels rely on group markets,” explains Bill Countryman, general manager of the Marriott, which recorded $34 million in gross annual sales in 2002, or 13.3 percent more than the previous year. The boost in business comes as Marriott Vacations Club continues to convert 720 hotel rooms to time-share villas. Once the remaining hotel rooms are converted to 310 time-share villas in 2005, there are plans to build two 10-story towers on Maui Marriott grounds. “We’ve been extremely successful with our time-share, and we’ve had loyal customers, who want to continue to come back,” Countryman says.

Neighbor Island businesses that did not do as well in this year’s Top 250 list hope their sales do the same next year, and that is, come back.

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Cathy S. Cruz