Modern business strategy develops exotic hardwood wood sales

EDROBABLY no one would bet

F 9n the success of a wood products company operating on an island with a limited supply of wood, no skilled sawmill labor pool, and no failroad. To make the gamble more of a long shot, the company had been taken over by a man with a background in financial analysis, mergers and acquisitions, but no lumber experience.

This was the situation when GIen Mueller, president of CampbellBurns Wood Products Co., Inc., Hilo, Hi., acquired the operation in 1977. Backed with a B.A. and an M.B.A. from Marquette University in Wisconsin and almost l0 years of operations analysis and planning with a large multi-market corporation in California, he initiated a turn around in the firm which has earned a profit as well as a reputation of being reliable and honest.

His first move was to concentrate on the exclusive production of Acacia koo, the beautiful hardwood native to Hawaii. This was logical since Campbell-Burns is located on a 9Vz acreplot in the middle of the lush tropical forests where koa grows. A favorite wood of the Polynesians, koa, sometimes called the Hawaiian mahogany, had been used in war canoes, ceremonial masks, outriggers, spears, and calabashes for years.

Mueller's second move was to tell the world of this beautiful wood, a natural for use in fine furniture, cabinets, boardrooms, office interiors, architectural woodwork and wood specialties. He had some magnificent examples to illustrate his story. Both the handsome doors in the grand ballroom and the grand staircase in the Iolani Palace in Honolulu are built entirely of koa. Construction is credited to King David Kalakaua in the latter part of the l9th century. Of more recent origin, but equally attractive, is the paneling in the office of the governor of Hawaii. Throughout the Islands this colorful wood with the interesting grain is found in paneling, furniture, and cabinetry such as the attractive case which displays an artifact collection at the Naniloa Surf Hotel in Hilo.

Part of the program of educating the world on the advantages of koa includes participation in the Imported Hardwood Products Association. Mueller also took advantage of the silver anniversary meeting of the Northwest Hardwood Association in Maui to welcome a group to tour Campbell-Burns and see koa production for themselves.

New manufacturing processes have accounted for some of the success of the firm which grossed $1,400,000 this year. Aggressive soliciting of new markets has been another factor. They plan to spend an increasing amount of the gross on advertising to introduce koa to the world hardwood market. Publications reaching wholesalers have carried messages stressing the romantic history of the "royal hardwood, one of the most beautiful woods in the world."

Campbell-Burns accounts for 8590 of the koa production in the Islands with the competition coming from small one./two man circular sawmill operations. The main competition,

Sfory at a Glance

Aggressive marketing with sound business Practices turns around Hawaiian wood products firm . . . koa wood sales increasing leasibility study of marketing other native woods underway.

according to Mueller's wife, MissY, who takes an active role in the business, is from other hardwood species such as walnut, teak and Honduras mahogany. "We coPe with it by attempting to make koa better known to users of other hardwoods."

The number of customers for koa is increasing according to company reports. Buyers are predominately hardwood wholesalers and veneer and plywood manufacturers. Lumber sales are currently up while flitch sales are slowing down. In the past, the opposite situation predominated. The majority of sales, outside Hawaii, go to the mainland United States and Japan in containerized shipments from the deep water port of Hilo.

Mueller attributes his success to applying business fundamentals in a disciplined manner and by drawing upon previous experience in turnaround business situations.Most importantly, he says, by insisting upon a high level of performance and quality at all times.

The current depressed housing market has little effect upon the business since its share of the market is so small. By continuing an aggressive marketing campaign, he feels that the firm will increase its share of the hardwood market.

Campbell-Burns has not always concentrated on koa. When the firm began in 1967,it produced Eucalyptus robusto, Several years later new management began marketing a mixture of robusta and koa. Mueller switched exclusively to koa, but he is currently studying the uses of robusta and another native wood, ohia (Metrosideros polymorpha), hoping to find a receptive market for them also.

Not as luxurious or beautiful as koa, these Hawaiian timbers are relatively unknown in the market. Although potential economic importance seems to exist, the lack of information has been a serious deterrent to their use. Tests have indicated that ohia has possibilities as a special purpose wood because of its high strength. Robusta reportedly shows promise for plantation growth.

The operation in Hilo is manned five days a week from 7 a.m. to 3:30 p.m. with a full-time crew of 20 plus four part-timers. The sawmill with Buck Buxton, superintendent, has ten workers with three in the logging crew and one driver hauling logs. Grading and shipping are handled by three with Robert Bernklau supervising. The remaining personnel works in management and administration. Because of the unavailability of trained sawmill workers in the Islands, Mueller has recruited some personnel from the mainland and trained others himself.

A beautiful wood coupled with aggressive marketing and the application of sound business practices appears to have turned a long shot into a sure thing for Mueller.