Posted on: Tuesday, March 15, 2005

Hardware business expanding to Kapolei

By Andrew Gomes
Advertiser Staff Writer

Hardware Hawaii has bought seven acres at Kapolei Business Park on which to build a lumber distribution and sales facility in an estimated $12 million project to replace its Kailua distribution center.

The company paid $5.7 million for the land, and expects to spend as much as $6.3 million more to build the facility, estimated to be completed as early as December.

Dave Lundquist, Hardware Hawaii president and chief executive officer, said the move is being made to allow for expansion, to more efficiently distribute lumber and to establish a presence in a fast-growing area.

"It's a very fortuitous place to be conducting business," he said. "The location is tremendous."

Lundquist said the company's Kapa'a Quarry distribution facility has inhibited sales growth because the operation is on three noncontiguous sites with ill-configured warehouses.

"There's lots of double and triple handling going on," he said. "It just doesn't work good for lumber. Our Kapolei facility will enable us to triple and quadruple sales over a five- to 10-year period."

Hardware Hawaii, which has retail stores in Kailua, Kane'ohe and Mapunapuna, receives about 65 percent of annual revenue from building materials, including lumber and cement.

For the fiscal year ending April 30, the company projects revenue of $45 million, up 25 percent from $36 million a year earlier. Lumber sales alone grew about 40 percent last year for the state's second-largest supplier.

The Kapolei site also will help increase business by handling sales at the lumber distribution center, unlike the Kapa'a Quarry site that is limited to distribution.

Another advantage of the Kapolei site is that Hardware Hawaii's ocean transportation carrier, Sause Bros. Ocean Towing Co., moved from Honolulu Harbor to Kalaeloa Harbor last year.

Hardware Hawaii's Kapa'a Quarry site will operate until the new facility is open. Plans have not been finalized for the Kailua property, which the company does not own.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.