[ INSIDE HAWAII INC. ]
JAMM AQUINO / JAQUINO@STARBULLETIN.COM
Denny Watts is chief executive of Novato, Calif.-based Miller/Watts Constructors, Inc. which merged recently with Iowa-based Weitz Co. The partnership recently completed work on Pier 2 at Honolulu Harbor, which opened in February as a port of entry for visiting cruise ships.
Watts in high-energy mode for Hawaii
The construction CEO is spending more time here on big projects and likes it that way
Question: How much business does Watts Constructors do? How about in Hawaii?
Answer: When I took over, it was a $16 million (in revenue) business, and we've grown it to a very profitable $100 million business. Last year, about $60 million of it was in Hawaii.
Q: Tell us about the deal.
» News: Miller/Watts Constructors Inc., a contractor that does 60 percent of its business in Hawaii, has merged with Iowa-based Weitz Co., a national general building contractor. Denny Watts continues as chief executive of Weitz's Watts Constructors LLC business unit, and becomes part of the Weitz Co. executive leadership group.
>> Background: Watts, former CEO of Dick Corp., joined California-based Miller/Watts Constructors as chief executive and chief operating officer in 2004, when the company opened its first Honolulu office.
» Age: 59.
» Deal: Miller/Watts becomes Watts Constructors LLC, a Weitz Co. Watts Constructors employees become owners of stock in Weitz, which is employee owned.
Weitz Co. is a 150-year-old company, one of the oldest construction companies in the United States ... and the company has grown over the years to an employee-owned business that has several thousand employees. As for the strategy for both businesses, for ours it was additional capital and bonding/surety capacity, and their strategy was growing the business. We found a great compatibility between the two of us.
Watts Constructors expects to double the size of our business in the next two years and probably again in the next five years. We see ourselves being around $200 million in two years.
Q: Will you have to spend more time on the mainland?
A: No. Quite the opposite. We're looking to relocate back to Hawaii, and there's a good probability that we'll increase our focus in Hawaii and our business structure will become more and more Hawaii over the next couple of years.
Q: What are the biggest projects the company has done in Hawaii?
A: We just finished a $33 million project for the Navy at Pearl Harbor called the K10 wharf upgrades. And we just did a $24 million Pier 2 cruise terminal for the state. And we're currently doing an addition onto Kahului Airport on Maui. We've picked up about $40 million in new projects in the state in the last several months.
Q: How many employees do you have?
A: We've grown from about 50 employees to around 150 to 200, depending on the number of projects we have going on at the time. And our growth through Hawaii and Guam has been 80 percent local folks that we've brought in that we've worked with in the past.
Q: Your company initially had interest in homeland-security projects. Any luck?
A: We are seeing it in some ways, but the way homeland-security funds are coming out is, it's ... coming from other agencies, such as the state Department of Transportation, Harbors Division. Most people look at homeland security as an agency in itself ... but most of the money that we've seen has come through the various agencies that use it. Part of the work we're doing at Kahului and other areas are all homeland-security-type projects.
Q: Is there a need for security infrastructure?
A: It's not just Hawaii, it's everywhere. The problem is grappling over designs. For instance, the amount of time that's been taken to redesign airports and deal with the effect of terrorism, and how you have to design into that these different elements, a lot of these things are hard to do. A lot of these things are short-term stopgaps. The longer-term projects are buffer zones, rerouting how you take people to the airport and drop them off. You are probably going to see more separation between the terminals and accessibility into the airport.
Q: Last word?
A: Weitz is a billion-and-a-half-dollar-a-year company. This gives us an opportunity to compete at much higher levels through the Pacific and especially in Hawaii. We stayed away from a lot of the major commercial markets simply because the manpower and other needs of doing larger projects. We wouldn't necessarily walk away from a high-rise now. So we would give it consideration, not only because of the expertise within the organization but also the capital to be able to pursue it.
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