In tough times, there still are opportunities

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Not all businesses on Maui are laying off workers, canceling projects and deferring investment. Some, big and small, are taking risks and looking for opportunities despite the gloomy news and gloomier economic predictions.

"We're very proud that we haven't laid off anybody," said Gary Hogan of Royal Lahaina Resort just before flying off to Shanghai to drum up new business on a marketing trip that included Gov. Linda Lingle and other industry leaders.

The resort also is continuing its extensive rebuilding of the 516-room hotel, with an initial phase of renovating and upgrading its 12-story tower as the Villas at Royal Lahaina completed.

Bob and Kelly King, owners of Pacific Biodiesel,Technologies LLC, announced this month that they have contracted to build Alaska's first commercial biodiesel plant. Alaska Waste, which hauls trash for most Anchorage households, plans to start converting old grease and cooking oil to help fuel its trucks next year.

Grand Wailea Resort Hotel & Spa, making the best of bad times, is renovating guest rooms, rebuilding its extensive water features and replacing hundreds of ohia posts in its restaurants.

Whole Foods Market scaled back one of its Oahu stores but is on schedule to open its first Maui location in the site of the old Star Market at Maui Mall next year. It expects to hire up to 160 people next year.

Patrick Bradley, the Southern Pacific Region president, said the reason is simple: "Maui is a great island for us."

At Ace Printing Co. in Lahaina, Lloyd Komoda is continuing to push on with a "going greener" re-equipment and expansion program that began last year.

Ace just added a Presstek Dimension Excel 425 platemaker that eliminates "all the chemistry" formerly needed to develop aluminum printing plates.

"We have eliminated the need for chemicals to process film and plates helping cut cost, improve production times and best of all help with Maui's environment," he said.

"We also purchased another four-color Heidelberg Quickmaster Direct Imaging press to back up the first one. Our business is based on deadlines and our first press was so busy and the possibility of it being tied up or going down would affect our customer's deadline."

He also invested in a Xerox Docucolor 242 photo copier for customers needing short full color runs.

These are serious moves for a small family-owned firm that still has, and still uses, a 58-year-old press that Komoda's father purchased 48 years ago, already used, to start the business.

Lisa Letarte Cabrinha and Michele Letarte Ross just opened a flagship store in Paia to sell their bohemian luxury swim and cover-ups. They have been selling mainly through resort swimwear shops around the world.

"Living on Maui has inspired my collections," Cabrinha, the designer, said. "There's nothing better than opening our first store on the island where it all started."

Sandy Shadrow, vice president of SOS Metals Recycling Maui, has been doing everything he can to avoid layoffs, but he hasn't been able to avoid cutting hours and overtime. He's at the mercy of a crashing international commodities market.

The price of steel scrap, which was as high as $700 a ton last year, has gone as low as $70.

It can fall to nothing, since some Chinese purchasers have refused shipments, even preventing ships from unloading and sending them back to America.

Shadrow said his company hasn't faced that, but he isn't shipping. Instead, SOS has "expanded" by leasing two more acres, where it is storing junked cars and other scrap until the market revives.

"I have to stockpile," he said.

It means SOS no longer goes hunting for scrap. Instead of taking white goods (old appliances) every Saturday, he has reduced that operation to once a month.

Shadrow and his family have been in the steel scrap business for decades.

"We have never seen this dramatic a drop in prices," he said.

But, he said, "We'll get by."

Hogan, whose parents founded the iconic travel service Pleasant Hawaiian Holidays, said he learned from his father, Ed, that downturns are best met aggressively. He recalled that after Sept. 11, 2001, when airlines were shut down and no one could predict the future for travel, Ed Hogan committed $2 million on a "Keep 'Em Flying" campaign, modeled on a World War II patriotic promotion.

"We were very fortunate. My dad had one hell of an understanding of marketing," Hogan said. "He said, 'Don't retreat, keep charging ahead.'"

The family no longer owns Pleasant Hawaiian, but it still has the Royal Lahaina and Royal Kona resorts.

"I am pleased to say that even at Kona, where it is dismal, we haven't laid anybody off. All our neighbors there have, but we haven't laid anybody off."

At Ace, Komoda said investing in updated equipment is a way of keeping up with customers' needs and demands.

"We have survived the ups and downs of our economy," he said. "In these tough times, our competitive pricing, great quality and excellent customer service will provide our customers the help they need. Our recent investments in up-to-date technology will shorten our production times and help the environment."

Financing was not especially troubling for him. He was able to arrange equipment leases with a broker he has dealt with before.

Duane Betsill, of Betsill Brothers Construction Inc., said preparing for a transition period in advance is a key management move.

He cannot say he hasn't laid anyone off. But he said he saw conditions changing and took many key workers who had been working as subcontractors "into the company," which swelled to 150 employees. It is now down to 90, and he drastically downsized his development division, which once had more than two dozen employees.

At that time, he also had more than two dozen projects. Today, he still has nine going and is bidding aggressively for whatever work may be put up. Betsill is replacing those ohia logs at the Grand Wailea, and his site work and concrete crews are bidding for subcontracts at other developers' projects.

In Alaska, the Kings will build a complete "turn-key" 500,000-gallon-per-year biodiesel refinery, using state-of-the-art technology developed by Pacific Biodiesel Technologies at its Salem, Ore., research facility.

The 5,000-square-foot processing plant will incorporate a waterless system as well as methanol recovery, substantially reducing processing costs.

"The Alaska model will be another self-sustaining model of community-based renewable fuel production," said Bob King. "Sustainability has become the new ideal for this industry, and we are proud to be working with clients who get that there are ways to attain a triple bottom line."

Alaska Waste's biodiesel will be blended with traditional diesel to operate the company's fleet of roughly 50 trucks in Anchorage, according to Chief Operating Officer Jeff Riley. The fleet burns about 5,000 gallons of regular diesel each week, Riley said.

The company's goal is to have those trucks get about 20 percent of their fuel from the recycled oil and grease by next summer, although certain vehicles may run on 100 percent biodiesel.

There is no question that more businesses are pulling back than, in Hogan's words, "charging ahead." But there are exceptions.

As president of Hawaii Hotels & Resorts, which operates the family's two properties, Hogan chose a middle course of reinventing the Royal Lahaina while keeping it open - slowing the process but keeping the guests coming even as the room rates were rising.

The $35 million rebuild of the main tower created two- and four-bedroom condominium units that Royal Lahaina is marketing in a slowing market.

Still, Hogan said he told his employees, "Stay aggressive, work harder so they can stay employed."

Bellman Eddie Napolis, who has been with Royal Lahaina for 37 years, appreciates the company's commitment to its employees even as the souring global economy creates a drag on Maui's visitor business.

"Actually the Royal Lahaina is doing real well, to me," Napolis said last week. "9/11, that was the worst. Now, that was scary."

Harry Eagar can be reached at heagar@mauinews.com.