Maui company invests
in new interisland ferryThe $1 million stake is aimed
at boosting diversified crop sales
The Hawaii Superferry, which promises a new way of life for residents and visitors, moved several knots closer to reality yesterday.
Maui Land & Pineapple Co., which already has agriculture, land development and property management in its diverse portfolio, said it has invested $1 million in the venture.
The investment, in the form of Series A convertible preferred stock, completes the initial equity financing of $3.3 million that the ferry company set out to raise, according to Hawaii Superferry Chief Executive John Garibaldi.
He said the other investors represent a cross section of individuals from both the mainland and Hawaii.
David Cole, chairman, president and CEO of MLP, said the company's desire to diversify its agricultural operations prompted the investment.
"We think this is one of the most dramatic developments that has occurred here in Hawaii for a long time," Cole said. "The ferry has the potential to shrink the archipelago down to one island. Maui could become to Hawaii what the California Central Valley is to the rest of the country."
Cole said the island's water, great soil and different microclimates are well suited to diversified agriculture.
"And if we get the right daily logistics at a relatively low cost, it's a way to bring the state much closer together in terms of the food supply," he added.
Garibaldi said the ferry gives MLP an advantage over the two other modes of product transportation -- air and barge.
"If you compare our pricing to air freight, we're significantly lower," he said. "Compared to barges we're slightly higher, but the products would travel in a matter of hours rather than days. The goal of Hawaii Superferry is to move passengers, vehicles and products in a very fast mode of travel."
A family of five traveling by car to the neighbor islands from Oahu could use the ferry service for about half the cost of flying and renting a car, Garibaldi said.
The first of two $75 million ferries, which each would hold 900 passengers and as many as 280 vehicles, is scheduled to be delivered in 2006. The second one is due about 16 months later. They are being built by Austal USA, an Alabama-based joint venture of Australian boat builder Austal Ltd. and U.S. shipbuilder Bender Shipbuilding & Repair Co.
Cole said the ferry service will not only benefit Maui Land & Pineapple but help the entire island -- as well as the state -- because Maui already produces chicken, pork, lamb and beef on the protein side; fish for aquaculture; produce such as onions, bell peppers and tomatoes; and, of course, pineapple.
"Our whole philosophy is that what's good for Maui is good for Maui Land & Pineapple," Cole said. "We are doing trials on a variety of different crops -- not as growers but as coordinators. Our whole strategy is to become a grower of growers and then to link that grower network to consumers."
Cole was not ready to identify the trial crops, but said the work builds on the company's collaboration with Maui-based Pacific Biodiesel Inc. on fuel crops.
Some of the byproducts from those fuel crops are vegetable oil, which burns and could be added to diesel; glycerin, which could be used for cosmetic products such as soap and other beauty aids; and meal, which is used as an additive to livestock feed.