ADB payoff requires research, patience
| • | Advertiser special: ADB in Hawai'i — global issues, local impact |
By David Butts
Advertiser Staff Writer
For Hawai'i businesses hoping to cash in on last week's Asian Development Bank meeting, the payoff may be years away, if ever.
Bruce Asato • The Honolulu Advertiser
Getting a slice of the ADB's annual $2.45 billion pie in business contracts "is a process," said Ernest Shih, vice president marketing and international for Brewer Environmental Services.
Speakers and audience members mingled during a break in the presentation, "Keys to Expanding Business With Asia" at the ADB meeting here last week. The key for businesses, according to a former ADB staffer, is being committed to learning.
Shih's company, with 44 employees and an office off Nimitz Highway, does most of its business in Hawai'i and Japan. Shih is hoping to expand into other markets and sees the ADB as a way to do it.
"It is not an instant thing," Shih said after spending a day at the ADB conference.
About 250 local business representatives paid the $125 registration fee to attend the ADB meeting. Many of them said it was a bargain, allowing them to market their product or service to several Asian countries without leaving Hawai'i.
For two years, the Hawaii Pacific Steel Framing Alliance has been trying to get Asian customers to buy steel-frame housing from its 120 members, yet they still haven't built a single house in the region.
The nonprofit alliance, which includes Castle & Cooke Inc. and Schuler Homes Inc., spent $1,000 for a booth at the ADB conference, which produced one solid lead.
Delegates from the Malaysian capital of Kuala Lumpur toured steel-framed housing job sites with alliance members and said they liked what they saw.
The city officials said they intend to spend $50 million to build 40,000 low-income homes soon and are interested in steel framing, said Tim Waite, executive director of the Steel Framing Alliance.
"They are going back and meeting with their city and will get back to us on the next step," Waite said. "If the numbers work out for them, they will probably do at least a pilot project."
The Malaysia project is attractive, Waite said, because the money is already there.
In most cases, a company wanting to do business with the ADB has to prove the project is worthwhile and that they are the best qualified to do it.
For companies looking to convince the ADB to hire them for work in Asia, the key is a qualified local partner, said Puongpun Sanani-kone, president of Pacmar Inc., a Kaimuki consulting company that has been working with the ADB since the mid-1980s.
Sananikone, a former ADB staffer and East-West Center alumnus, said the ADB has been his company's main source of business, providing as much as half its total revenue.
His company helps plan and prepare projects for funding. He recently helped Guangdong province in China get $50 million from the ADB for tropical agriculture development.
If a company is really interested in doing business with the ADB, "they need to make a serious commitment to learn," said Sanani-kone.
He also advises companies to keep abreast of trends in the ADB. "Now they are talking about poverty reduction; it is a theme," said Sananikone. In 1999, the ADB established poverty reduction as its top goal.
Frank Lyon, the 72-year-old president of Lyon Associates Inc., has noticed a shift. He said ADB contracts are moving in a direction that would please the protesters who rallied outside the conference center last week.
The most common criticism of the bank is it provides money for massive infrastructure projects, such as dams and ports, instead of smaller projects that would have a more immediate impact on reducing poverty.
Lyon's engineering company has profited from at least half a dozen ADB-financed infrastructure projects.
Most recently his company has been working on the rehabilitation of the south harbor at the Manila port in the Philippines.
For Lyon Associates, the ADB now represents about 20 percent of its contracts, down from about 50 percent, said Lyon.
The total value of ADB loans for the large construction projects is decreasing, Lyon said, adding that his company is looking to grow through "build, operate and transfer" projects.
In those projects, private investors finance a power plant, port or highway and then operate it for many years to earn a profit on their investment. After a set period, they transfer it to the government.
