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The Honolulu Advertiser
Posted on: Tuesday, June 6, 2006

Isle seawater exports surge

By Sean Hao
Advertiser Staff Writer

Jeff L. Smith, chief operating officer of Deep Seawater International Inc., shows one of the plastic blanks that are made into bottles at the plant. The company plans to begin bottling seawater this summer.

KEVIN DAYTON | The Honolulu Advertiser

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Deep Seawater, led by chief executive Behzad Kianmahd, is poised to join the booming seawater bottling business.

KEVIN DAYTON | The Honolulu Advertiser

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Exports of desalinated deep seawater from Hawai'i soared 700 percent during the first three months of this year to $8.8 million on rising demand among Japanese.

Health-conscious Japanese are the biggest buyers of bottled Hawai'i deep seawater, which sells for $3 to $5 a bottle as a pure and nutrient-rich drink. That's made nonsweetened water Hawai'i's third-largest foreign export during the first quarter and the top all-locally produced export, according to figures provided by the Foreign Trade Zone Division of the state Department of Business, Economic Development and Tourism.

Bottled water now is Hawai'i's biggest food-related export topping both chocolate and coffee. Pineapple, which is still a major crop in Hawai'i, is mostly sold within the U.S. and not exported.

The growth in sales of deep seawater is remarkable considering the business hardly existed just three years ago. Despite such rapid growth, the industry doesn't seem to have peaked. So far only three of a planned seven bottling plants have started operations at the Natural Energy Laboratory of Hawaii Authority in Kailua on the Big Island.

"If it's not already, it will be our biggest export," said Steve Bretschneider, chief marketing officer for Deep Seawater International, which plans to begin bottling seawater this summer. "It's really just beginning.

"We're very bullish on the future of this."

The fledgling industry is based at NELHA, which has a pipeline that extends as much as 3,000 feet into the water off Kona. Coming from deep below the ocean's surface, the water is touted as being thousands of years old and free of modern impurities. The desalinated Hawaiian deep seawater also is marketed as a dietary supplement that helps with weight loss, stress reduction, improved skin tone and digestion, and other benefits that have yet to be proven via scientific study.

The state's first and largest bottler of deep seawater is Koyo USA Corp., which expects to open a third plant at the energy laboratory this summer. The other two bottling companies now in operation are Enzamin USA Inc. and Hawaii Deep Marine Inc. Savers Holdings Ltd., Hawaii Deep Ocean Waters and Kama'aina Waters LLC also have plans to eventually begin bottling at the lab.

An eighth company called DSH International Inc. plans to pump deep-seawater into a boat off Barbers Point. The water would then be sold to bottlers in Kapolei.

With $8.8 million in sales, first quarter exports were nearly half the total for all of last year, when Hawai'i shipped $16.8 million worth of deep seawater. The actual value of Hawai'i's bottled water is likely far larger because the value reported to foreign trade zone officials is a wholesale rather than a retail value of the bottled water.

At full capacity, Koyo can produce about 250,000 1.5-liter bottles a day for export to Japan. That equates to about $1.5 million a day in estimated retail sales. Koyo's new plant will quadruple production to 1 million bottles a day.

Overall, seawater bottlers employ more than 100 people and have spent more than $100 million in capital improvements, said Ron Baird, chief executive officer of NELHA. That's 100 jobs in Kailua, Kona, that aren't directly tied to tourism.

"It helps diversify the economy," he said. "These jobs are not dependent on the larger national economy. I think that's critical for the state."

Just how long the Japan boom will last is unknown, though Hawai'i's water companies are targeting markets outside Japan, including other Asian countries, Europe and the Mainland U.S.

Reach Sean Hao at shao@honoluluadvertiser.com.

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