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The Honolulu Advertiser
Posted on: Tuesday, February 12, 2002

Dillingham leaving Hawai'i

By Frank Cho
Advertiser Staff Writer

President and CEO William Wilson said the focus will be on Mainland and international markets.

Dillingham Construction Co. is selling its subsidiary Hawaiian Dredging Construction Co., one of Hawai'i's largest general contracting firms, in a bid to raise cash and concentrate on its Mainland and international operations.

With the sale, Dillingham Construction no longer will have business interests in Hawai'i, ending more than 100 years of operation here.

Last year Dillingham Construction sold its Hawai'i paving operations, Hawaiian Bitumuls Paving & Precast Inc., to rival Grace Pacific Corp. for an undisclosed amount.

The Pleasanton, Calif.-based company has started negotiating with several potential international and national construction firms for Hawaiian Dredging, company executives said. A short list of potential buyers is expected by the end of March.

"We have been doing well. We have been profitable. But in the last several years Dillingham has had difficulties with its Mainland U.S. and international operations," said William Wilson, Hawaiian Dredging's president and chief executive officer.

The sale comes as industry experts say the construction industry finally is strengthening after several difficult years in the 1990s. Over the past two years the number of building permits has risen, construction revenues have grown, and the jobs outlook has stabilized.

"We have had to be careful and conservative in recent years," Wilson said. "To a certain extent I think that our competitors ought to be more worried about us after this sale than they have been. I think we will be stronger and better."

Hawaiian Dredging's 500 employees should not be affected by the sale, Wilson said. The company said it expects to complete the transaction by June or July.

"The company has a long profitable history, and with its strong position in the Hawai'i market it will be a very desirable and strategic asset for the new owner," Wilson said.

Walter Dillingham founded Hawaiian Dredging in Hawai'i in 1902 to dredge Honolulu Harbor. Dillingham Corp. was formed in 1961 to merge a number of affiliated companies.

Dillingham was publicly traded between 1961 and 1983. In 1987 a group of employees and Japan's Shimizu Corp. bought the company's construction operations and now own the company.

Hawaiian Dredging has consistently ranked at or near the top of the state's largest general contracting companies, with more than $260 million in revenues last year. Recently it has worked on some of the Islands' most high-profile projects, including the H3 Freeway, Ford Island Bridge and Kalia Tower in Waikiki for the Hilton Hawaiian Village.

Dillingham Construction now competes internationally for projects such as as dams, highways, industrial plants, offices, housing and rapid transit systems. Subsidiaries include contractor Nielsen Dillingham and Watkins Engineers and Constructors. Japan's Shimizu Corp. owns a 45 percent stake; employees own the remaining 55 percent.

Reach Frank Cho at 525-8088 or fcho@honoluluadvertiser.com.