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Environmental Science International, an environmental consulting and remediation firm with offices in Hawaii and Japan, will soon provide its services directly to Japanese businesses and government, as well as to companies further afield in Asia. Kailua firm expands
in Japan, AsiaBy Lyn Danninger
ldanninger@starbulletin.comWith the help of Japanese investors, the Kailua-based company formed a new Japanese company, Environmental Science Corp. ESI International, formerly Brewer Environmental International, had already been providing environmental remediation and investigation services for the U.S. military in Japan and Korea since 1995, ESI International President Ernest Shih said.
Last year, while BEI's parent C. Brewer and Co. was divesting some of business interests, Shih -- then a vice president at BEI -- saw an opportunity to negotiate a deal to take over the company's Japan office.
Shih retained BEI's Japan employees, re-named the company and took on partner Howard West, who had been working locally with a competitor, Hawaii International Environmental Service.
Almost immediately, ESI was able to attract $1 million in investments and form partnerships with Japanese firms, Shih said. The result was the formation of Environmental Science Corp.
Those partners include Ohki Construction Co.; Japan Asia Investment Corp., a venture capital firm; UERI, a semi- governmental environmental research firm; and Tanigawa Co., Japan's largest real estate appraiser.
Shih estimates first-year revenues of about $10 million for the new company.
ESI and Environmental Science Corp. will jointly market their services in other countries in Asia, such as China, where Ohki Construction has been doing business and has established relationships, Shih said.
Though ESI had been providing services in Japan for U.S. military bases, it had never been able to successfully crack the local Japanese market.
But while attending a trade fair in Japan, Shih attracted the attention of Ohki, one of the largest construction firms in Japan.
With new and tougher environmental regulations taking effect in Japan and Okhi looking to diversify its operations, they were interested in ESI and what it had to offer, Shih said.
"They needed to diversify and we needed an entree," he said.
Negotiations between the two continued for about nine months and other investors came on board. Papers forming the new corporation were finally signed at the end of March, Shih said.
A cooperative marketing and support agreement calls for the exclusive use of Environmental Science Corp. for all ESI projects in Japan and the exclusive use of ESI for Environmental Science Corp. projects in the United States.
Environmental Science Corp. will also import and license U.S. environmental technologies in Japan.
In addition to shares in the new company, ESI will have two seats on Environmental Science Corp.'s board, Shih said.
Shih, who will spend two weeks in Japan every other month, said since finishing the deal he has met with officials from some of Japan's largest companies, thanks to his new partners.
New legislation in Japan means companies are looking for environmental consulting and remediation services, he said.
For example, Japan had been reluctant to put teeth into soil contamination laws, Shih said. But new laws require certain levels now be met.
"They are taking it more seriously now," he said.
U.S. companies, long used to working to federal Environmental Protection Agency standards are seen as on the cutting edge of environmental issues and technology, Shih said.
In addition, potential clients are interested in acquiring technologies developed in the United States, something the company will now be able to provide and potentially license.
"There is technology here that they don't know about, so it's a great fit," Shih said. "The upside is tremendous. Our plan is to do an IPO in three years."