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KAMAAINA COMPANIES

Among the Big 5, A&B still reigns

By Allison Schaefers

POSTED: 01:30 a.m. HST, Oct 25, 2009

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Alexander & Baldwin Inc., the only one of the original Big Five companies still dominant in Hawaii's economy, began with a mere $110 investment by the sons of pioneering missionaries.

Company founders Samuel Thomas Alexander and Henry Perrine Baldwin were childhood friends in Lahaina before forming their sugar-growing partnership, which evolved into diversified shipping, real estate and tourism interests.

"We have been shaped by the pioneering spirit of our founders, and we continue to seek new ways and new places to lead A&B to the forefront of the industries in which we operate," said Allen Doane, A&B's chairman and chief executive officer.

But in the beginning, A&B was just one of five sugar-producing companies that controlled Hawaii's economy from the 1870s to the 1970s before tourism replaced agriculture as the state's economic engine, said Bog Sigall, a Hawaii Pacific University professor and the author of the "Companies We Keep" series.

In their heyday these sugar producers, which included A&B, Castle & Cooke, C. Brewer & Co., Amfac and Theo H. Davies & Co., were known as "the Big Five."

"Sugar ruled the roost in Hawaii until tourism overcame it," Sigall said. "Until then the Big Five controlled everything from politics to shipping."

ALEXANDER & BALDWIN INC.

» Year founded: 1870

» Founders: Samuel Thomas Alexander and Henry Perrine Baldwin

» Current leadership: Allen Doane, chairman and chief executive officer

» Type of business: Shipping, real estate, tourism and sugar

» Headquarters: Honolulu

 
As Hawaii tourism grew, the Big Five companies scrambled to find other niches, and most shrank or disappeared, he said.

"A&B, with Matson as its crown jewel, is the only one that has continued its dominance in the local economy," Sigall said.

At one time Matson was jointly owned by A&B, Castle & Cooke, C. Brewer and Amfac; however, the U.S. Department of Justice challenged this joint ownership, and A&B bought them out in 1969, he said. Today, A&B is worth $2.5 billion and owns about 91,000 acres, making it Hawaii's fifth-largest landowner. Since 2003 Matson has invested nearly $600 million in fleet enhancements, including more than $500 million for construction of four new U.S.-built container ships. They are a pivotal part of Matson's expansion westward to Shanghai and eastward to Savannah, Ga.

A&B, which has prospered amid considerable economic and social changes in Hawaii, is well positioned to ride out the next 50 years, Doane said.

"We believe that the best of who we are and what we will achieve is still ahead of us, testament to the exceptional leadership and tenacity of all of those at A&B today and all those who have come before us," he said.

But that future might not be in the sugar business.

Hawaii Commercial & Sugar Co. "has suffered significant losses in recent years, largely due to record drought and the resulting lack of water for its crop," Doane said.

The company is making every effort to improve HC&S performance and expects to make a decision by year's end regarding its future, he said.

 

Alexander & Baldwin Inc., the only one of the original Big Five companies still dominant in Hawaii's economy, began with a mere $110 investment by the sons of pioneering missionaries.

DENNIS ODA / DODA@STARBULLETIN.COM
Allen Doane, chairman and chief executive officer of Alexander & Baldwin Inc., stands between photos of the company's founders, Samuel Alexander, left, and Henry Baldwin, hanging just outside his office.

Company founders Samuel Thomas Alexander and Henry Perrine Baldwin were childhood friends in Lahaina before forming their sugar-growing partnership, which evolved into diversified shipping, real estate and tourism interests.

"We have been shaped by the pioneering spirit of our founders, and we continue to seek new ways and new places to lead A&B to the forefront of the industries in which we operate," said Allen Doane, A&B's chairman and chief executive officer.

But in the beginning, A&B was just one of five sugar-producing companies that controlled Hawaii's economy from the 1870s to the 1970s before tourism replaced agriculture as the state's economic engine, said Bog Sigall, a Hawaii Pacific University professor and the author of the "Companies We Keep" series.

In their heyday these sugar producers, which included A&B, Castle & Cooke, C. Brewer & Co., Amfac and Theo H. Davies & Co., were known as "the Big Five."

"Sugar ruled the roost in Hawaii until tourism overcame it," Sigall said. "Until then the Big Five controlled everything from politics to shipping."

ALEXANDER & BALDWIN INC.

» Year founded: 1870

» Founders: Samuel Thomas Alexander and Henry Perrine Baldwin

» Current leadership: Allen Doane, chairman and chief executive officer

» Type of business: Shipping, real estate, tourism and sugar

» Headquarters: Honolulu

 
As Hawaii tourism grew, the Big Five companies scrambled to find other niches, and most shrank or disappeared, he said.

"A&B, with Matson as its crown jewel, is the only one that has continued its dominance in the local economy," Sigall said.

At one time Matson was jointly owned by A&B, Castle & Cooke, C. Brewer and Amfac; however, the U.S. Department of Justice challenged this joint ownership, and A&B bought them out in 1969, he said. Today, A&B is worth $2.5 billion and owns about 91,000 acres, making it Hawaii's fifth-largest landowner. Since 2003 Matson has invested nearly $600 million in fleet enhancements, including more than $500 million for construction of four new U.S.-built container ships. They are a pivotal part of Matson's expansion westward to Shanghai and eastward to Savannah, Ga.

A&B, which has prospered amid considerable economic and social changes in Hawaii, is well positioned to ride out the next 50 years, Doane said.

"We believe that the best of who we are and what we will achieve is still ahead of us, testament to the exceptional leadership and tenacity of all of those at A&B today and all those who have come before us," he said.

But that future might not be in the sugar business.

Hawaii Commercial & Sugar Co. "has suffered significant losses in recent years, largely due to record drought and the resulting lack of water for its crop," Doane said.

The company is making every effort to improve HC&S performance and expects to make a decision by year's end regarding its future, he said.

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