Smooth Sailing

August, 2003

Alexander & Baldwin Inc. (OTC:ALEX) has been a model of consistency. In 1983, A&B reported a gross revenue of $453.2 million, placing it at the No.5 spot on our Top 250 list. In 2002, the Big Five company again was ranked fifth with $1.09 billion in revenue. Twenty years ago, A&B was primarily a shipping company with real estate and agriculture interests. Today, despite two decades of rising and bursting economic bubbles, the company’s core businesses are essentially the same. Simply a matter of keeping the company ship on course? Yes and no.

“From 20,000 feet in the air, the ocean looks nice and smooth,” says W. Allen Doane, president and chief executive officer of Alexander & Baldwin Inc. “Once you get down to sea level, you notice that the waves are very large and they’re moving in all kinds of directions. That’s what the last two decades have been like for everyone.”

Doane says that at first glance, it may look as though his company hasn’t changed much, having resisted the lure of retail and high tech over the years. But he says A&B is a vastly different company, expanding around its core businesses. For instance, Doane says that A&B now earns $200 million in revenue from its intermodal business, which ships empty containers to different parts of the country. In addition, the company’s real estate division has been re-energized with 16 major acquisitions and investments over the past five years. Even its sugar operations have been sweetened with various specialty products.



Rank ’83              6
Sales ’82 ($Mil)     $397.5
Rank ’03              5
Sales ’02 ($Mil)     $1,088.9


“The hardest thing to do is change when you have been successful,” says Doane. “It’s easy to change when you have a company of 10 people, and you have nothing else to do. It’s easy to change when your business is near failure. You’ll try anything. Try altering things when you’re still making money.”

Doane says that the state’s economic future looks bright, a forecast he is backing up with aggressive investment, especially in real estate. “No one expects a repeat of the Japanese miracle, and we probably don’t want it,” says Doane. “I’m not so sure we were all that good at utilizing those economic benefits. They were too much and they came too fast. We’ve learned to deal with too little for too long.”

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David K. Choo