Japan Top 30: it's not all bad news, if you're not in the tourism business.

Japan is stagnating. Operation Iraqi Freedom and SARS kicked the Asia giant while it was down, and an extremely incremental economic growth of about 1 percent is about the only thing that downsized Japanese companies and unemployed workers can pin their hopes on.

Bryon Gangnes of the

Yet the news for Hawaii-based Japanese companies hasn't been all that bad. From 2001 to 2002, average gross sales for the Top 30 Japanese-owned companies grew by 5.4 percent. While many giant corporate parents in the land of Wa are paring down and are looking to sell far-flung assets, some of that same activity has slowed in Hawaii. According to local real estate firm Colliers Monroe Friedlander Inc., sales of Japanese-owned assets totaled $678 million in 2001. There were fewer sales in 2002, totaling about $27.1 million, a 96 percent decrease.

Colliers Senior Vice President Douglas Pothul says, "The word we get from Japan is everybody is hurting. That just means it's not as good as it once was. That doesn't mean everybody's hurting to the point where they have to liquidate." He is revising downward his earlier projection of $1 billion in gross sales of Japanese-owned commercial assets in Hawaii in 2003.

Pothul says the Japanese owners have no motivation to sell, other than pressure on Japanese-owned assets, since the Hawaii properties generate cash through leasing and management fees. He says, "Now that I look at it mid-year, the Japanese that I thought were going to liquidate sooner rather than later are continuing to hold onto those assets. Some that I thought would sell this year are going to roll into the next year and possibly into 2005."

The king of Japanese-owned Hawaii commercial hotel property and perennial top of the Japan Top 30 list, Kyo-ya Co. Ltd., with almost 5,000 hotel rooms and four Waikiki hotels, felt the impact of Sept. 11 in 2002 and is feeling SARS this year. In 2002, gross sales dropped 6.7 percent from the previous year from $499.8 million to $466.4 million. Kyo-ya Executive Vice President and Chief Operating Officer Ernest Nishizaki says, "Basically, that was probably a drop in our occupancy levels here in Waikiki. A large percentage of that could probably be attributed to a drop in the Japanese volume. The Japanese volume certainly has declined in the last several years, and our hotels in Waikiki have depended relatively through the years on the Japanese business."

Obviously, Japanese businesses dependent on Japanese visitors to Hawaii have been hit hardest. R&C Hawaii Tours Inc., which operates both inbound and outbound tours, saw sales drop 35.4 percent from gross sales of $51.4 million in 2001 to $33.2 million in 2002. General

Manager Seiichi Sakamoto says he expects sales to drop even farther, by as much as 10 percent, this year. Yet, he's hopeful there will be an uptick in September, saying the families who usually travel over the summer stayed home this year because of SARS, but that company tours and the free independent traveler (FIT) should be starting up again in the fall. "If you have a good relationship with an airlines who can bring the tourists, somehow we can make it here," says Sakamoto.

R&C Hawaii had the second biggest drop in sales next to Trans Orbit Hawaii Inc., another tour operator. Trans Orbit Hawaii experienced the biggest loss in sales of the Japan Top 50, going from $29.8 million in 2001 to $17.6 million in 2002, a 40 percent drop.

For some Hawaii-based Japanese companies that are not in the tourism industry, the past year has been, well, very constructive. Take Kajima Construction Services, a commercial construction company whose Japanese parent is the international giant Kajima Corp. Kajima Construction Services' gross sales more than tripled from $11 million in 2001 to $54.5 million in 2002.

Kajima Construction General Manager Kip Kamoto credits joint ventures with sister company Hawaiian Dredging with the big jump. These include the Kamehameha Schools' new Big Island campus, the Kaanapali Ocean Resort, and the University of Hawaii's John A. Burns School of' Medicine in Kakaako. It's a great showing for any Hawaii-based construction company, especially a Japanese-owned one.

"This cycle has been kind of depressed for a while, but I think it's slowly coming back," says Kamoto. "For us--maybe not so slow. We had a big bump, so to speak."

Kamoto says in 2002, Kajima's Hawaii operations comprised just 2 percent of the $15 billion that Kajima Corp. generated through its companies worldwide. He says, "This is a very key market and the Kajima group is committed to the Hawaii market and continues to support it. The parent company provides support through its bonding capacity and the financial strength of Kajima Corp. back in Japan."

Other companies that showed nice sales gains in 2002 were also not in the tourism industry. House Foods HI Corp., which processes and distributes dairy and fruit juice products, had a 40.4 percent gain. Nissan Motor Corp. in Hawaii Ltd., which distributes both Nissan and Infiniti models, had a nice 24.2 percent boost.

Kyo-ya's Nishizaki says that since parent Kokusai Kogyo's businesses are primarily based in Japan, the Hawaii hotel properties do offer a balance. Nishizaki says, "As you have disturbance in the world, perhaps we counter that by being in a different part of the world and more dependent on different economic cycles. Although you know, for Hawaii, Japan is a very, very important market for us and will continue to be."

As the Top 50 list demonstrates, Hawaii does offer Japan-based companies the occasional bright spot. Pothul can attest to that in his line of work. He says, "There's still a lot of individual wealth in Japan and there are actually Japanese investors. There's two that I know of that are actively looking at our market to invest, but that is an anomaly."

JAPAN TOP 30

COMPANY (RANK)                                   PARENT COMPANY

Kyo-ya Co. Ltd. (#13)                            Kokusai Kogyo Co. Ltd.
JTB Hawaii Inc. (#16)                            JTB Corp.
Sony Hawaii Co. (#25)                            Sony Corp.
First Insurance Co. of Hawaii Ltd. (#26)         CNA Financial
                                                   Corp./Tokio
                                                   Marine and Fire
                                                   Insurance
Jalpak International Hawaii Inc. (#33)           Jalpak Co. Ltd.
Nissan Motor Corp. in Hawaii Ltd. (#35)          Nissan Motor Co. Ltd.
The Daiei (U.S.A.) Inc. (#45)                    The Daiei Inc.
Prince Resorts Hawaii Inc. (#52)                 Seibu Railway Co. Ltd.
7-Eleven Hawaii Inc. (#58)                       Seven-Eleven Japan Co.
                                                   Ltd.
Pacific Guardian Life Insurance Co. Ltd. (#70)   Meiji Life Insurance
                                                   Co.
Halekulani Corp. (#88)                           Mitsui Fudosan America
                                                   Inc.
Four Seasons Resort (#94)                        Shimizu Asset
                                                   Management Inc.
Princeville Corp. (#104)                         Suntory Ltd., Mitsui
                                                   & Co. Ltd., Nippon
                                                   Shinpan Co. Ltd.
Kintetsu International Hawaii Co.,
a division of Kintetsu International Express
(U.S.A.) Inc. (#105)                             Kinki Nippon Tourist
                                                   Co. Ltd.
Japan Airlines (#112)                            Japan Airlines
Shinwa Golf Hawaii Co. Ltd. (#116)               Shinwa Golf Kabushiki
                                                   Kaisha
Mauna Lani Resort (#143)                         Tokyu Corp.
Kahala Mandarin Oriental, Hawaii (#148)          Kahala Royal
                                                   Inc.(60%)/Mandarin
                                                   Oriental Hotel Group
                                                   (40%)
Marukai Corp. (#155)                             Marukai Corp.
                                                   Kabushiki Kaisha
Daiichiya-Love's Bakery Inc. (#157)              First Baking Co. Ltd.
House Foods Hawaii Corp. (#159)                  House Foods Corp.
Alaka'i Mechanical Corp. (#162)                  Taisei Oncho Co. Ltd.
                                                   & AMI Corp. Ltd.
Kajima Construction Services (#167)              Kajima USA
R & C Hawaii Tours Inc. (#172)                   R&C Tours Co. Ltd.
Matsushita Electric Corp. of America, Hawaii
(MECA-HI) (#182)                                 Matsushita Electric
                                                   Industrial Co. Ltd.
Nishimoto Trading Co, Hawaii Ltd. (#186)         Nishimoto Trading Co.
                                                   Ltd.
Obayashi Hawaii Corp. (#191)                     Obayashi Corp.
Local Motion Inc. (#220)                         Minami Corp. U.S.A.
Trans Orbit Hawaii Inc. (#241)                   Trans Orbit Co. Ltd
International In-Flight Catering Co.
  Ltd. (#249)                                    Japan Airlines Co.
                                                   Ltd. (majority
                                                   owner)/Kokusai
                                                   Kogyo Co.

                                                     SALES 2002
COMPANY (RANK)                                         ($MIL)

Kyo-ya Co. Ltd. (#13)                                   466.4
JTB Hawaii Inc. (#16)                                   380.4
Sony Hawaii Co. (#25)                                   186.8
First Insurance Co. of Hawaii Ltd. (#26)                177.4
Jalpak International Hawaii Inc. (#33)                  159
Nissan Motor Corp. in Hawaii Ltd. (#35)                 157.1
The Daiei (U.S.A.) Inc. (#45)                           144
Prince Resorts Hawaii Inc. (#52)                        131
7-Eleven Hawaii Inc. (#58)                              119
Pacific Guardian Life Insurance Co. Ltd. (#70)           95.4
Halekulani Corp. (#88)                                   74.5
Four Seasons Resort (#94)                                72
Princeville Corp. (#104)                                 64
Kintetsu International Hawaii Co.,
a division of Kinetsu International Express
(U.S.A.) Inc. (#105)                                     63
Japan Airlines (#112)                                    59.6
Shinwa Golf Hawaii Co. Ltd. (#116)                       58.3
Mauna Lani Resort (#143)                                 49.3
Kahala Mandarin Oriental, Hawaii (#148)                  45.8
Marukai Corp. (#155)                                     40
Daiichiya-Love's Bakery Inc. (#157)                      37
House Foods Hawaii Corp. (#159)                          36.5
Alaka'i Mechanical Corp. (#162)                          35
Kajima Construction Services (#167)                      34.5
R & C Hawaii Tours Inc. (#172)                           33.2
Matsushita Electric Corp. of America, Hawaii
(MECA-HI) (#182)                                         30
Nishimoto Trading Co, Hawaii Ltd. (#186)                 29.5
Obayashi Hawaii Corp. (#191)                             28.3
Local Motion Inc. (#220)                                 23
Trans Orbit Hawaii Inc. (#241)                           17.6
International In-Flight Catering Co. Ltd. (#249)         16.2

JAPAN TOP 30 ANNUAL SALES

2003 TOTAL: $2.86 billion in 2002 gross sales

2002 TOTAL: $2.85 billion in 2001 gross sales

2001 TOTAL: $3.13 billion in 2000 gross sales