Saving a Site in Paradise

When West Hawaii Concrete was threatened with possible closure, a non-traditional revenue stream kept it open and in the black.

by Tina Grady Barbaccia, News/Digital Editor

When demand for construction materials slowed, West Hawaii Concrete was faced with shutting down one of its quarries. But that wouldn’t solve the operation’s woes. The site’s lease stipulated that minimum royalty payments would still need to be made, so the quarry not only wouldn’t bring in any revenue, but it would be operating in the red even after a shutdown.

The operation’s management team quickly brainstormed and came up with a non-conventional method of generating revenue: It established a green-waste disposal venture. This entrepreneurism not only saved the quarry and has kept it operating in the black, but it has filled a landscaping service need while diverting waste from the local landfill.

“This has enabled us to keep the quarry open,” explains Jason Macy, vice president of Kona, The Big Island, Hawaii-based West Hawaii Concrete (WHC), a subsidiary of Knife River Corp., part of MDU Resources Group. “At this particular operation, the volumes had fallen to a level where it wasn’t worth having the quarry open.”

How it all began

It all started when Puna Certified Nursery, a landscaping business, approached WHC about setting up a base operation in the quarry. The landscaper had been diverting all of its green waste to a landfill. “But then they approached us about composting their waste — grass, palm trees, palm fronds, and other green waste,” Macy says. It turned out that zoning allowed composting on the property, so West Hawaii applied for a waste/green waste permit, and a green waste disposal business was born.

Green waste that will soon be turned to mulch is dumped at West Hawaii Concrete in Waikoloa, The Big Island, Hawaii.

The permitting process took about six months to complete. Once the state of Hawaii granted WHC a permit, it began collecting material in the spring of 2009 and is able to take in 3,000 tons of green waste per year to be composted. The process takes about six months for full degradation of the material. However, the permit requires that once the material is composted and broken down, nothing may be taken off of the property that is more than 3/4 of an inch in size. “If you have a 3-foot tree trunk, then it reclassifies it [the permit],” Macy says. “They [the state] want it small enough so it’s biodegradable to make sure it’s not going to end up in someone’s yard as a waste product. There are a lot of restrictions on what we can and cannot do. We told our tenant that they could compost, but that they had to abide by the rules. We gave them the list of regulations they had to meet and are ensuring they are complying with the permit.”

Currently, WHC only allows Puna Certified Nursery to compost at WHC. “We haven’t opened it up to any other contractors,” Macy says. “Because we are limited to 3,000 tons of green waste per year, we didn’t have to limit Puna’s operations until we have a better idea of what we are bringing in, especially because this contractor is willing to do the composting itself.”

WHC currently charges $40 per ton to bring in Puna’s waste, but is considering giving the company a credit for what it brings in because it does do self composting. “If we were to expand and allow another contractor in at the same price, it wouldn’t be fair,” Macy points out. Currently, WHC has not processed any green waste; it has only taken it in.

To date, it has invoiced for about $72,000 since 2009.

How it all stacks up

West Hawaii Concrete’s Waikoloa quarry currently does not have any full-time employees. When the operation went inactive, the scale operator position was eliminated because it now can be accessed remotely from its other affiliated quarries. However, Macy says the operation still sells about 20,000 to 30,000 tons of material per year at the location and contract crushes about 250,000 tons per year. Overall aggregates operations — which include the Kona Quarry at 200,000 tons per year, Waimea Quarry at 100,000 tons per year, and the Waimea Cinder Pit at nearly 30,000 tons per year, equal nearly $8.5 million.

(Top) Fine white sand blankets segments of the operation at West Hawaii Concrete. (Bottom) Kemp Murakami, general manager for maintenance for Puna Certified Nursery, checks the temperature of a pile of mulch.

“We open [the Waikoloa Quarry] on an as-needed basis,” he says. “If rock sales justify opening it for a day, the location brings in a loader operator. We took a group of our tractor-trailer delivery guys and trained them on MSHA (the Mine Safety and Health Administration) Part 46 so they were certified to run loaders. If we need them, they load [the material] themselves, get scaled out, and make the delivery from there.”