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[Music] [Applause] [Music] hi welcome to international hawaii on think tech i'm your host cindy matsuki with the with hawaii's foreign trade zone number nine international hawaii showcases local import and export businesses to help others new to the industry today my guest is maui kahawai ola founder of federal industrial corporation he's a local startup which is so exciting a local startup manufacturer an import company and he's also a new ftc nine tenant so thank you so much for joining me molly thanks for having me cindy so i know your latest your new company is just kind of getting off the ground or even if could you briefly explain what your company is going to be and why you started it well a company is called federal industrial corporation and basically this company was started originally to be a distributor for our company that we have in thailand so it would be we had products in thailand that we're going to import into the us but being with the pandemic the situation everything changed so now we're adapting to the pandemic so of course our business on the other side is going slow so we wanted to innovate and see how we can take the resources from our team our engineering team and our technical team and put it to good use during the pandemic and by right now we're looking at opening up a small little factory in the ftc uh bringing in the machines importing the raw material as in the us is very hard to get the raw material so we're planning on bringing in the material from asia manufacturing and exporting and using for local consumption that's great and that's something that i think we're going to be meeting for a while so and i'm glad you're doing it in hawaii versus doing it someplace else like in thailand so that'll be exciting um how did you can you kind of walk us through like how you started with this idea and then how you got to where you're at now okay first when we first started um in business from a small time growing up in hawaii and i don't know if you remember the uh the mr softy trucks long time ago we had that growing up we were going to the neighborhoods and everything so anyway my dad had a franchise from this when a long time ago yeah so when we're young we would always go into ice cream truck and you know going and getting free ice cream all the time so after a while my dad retired from that he's a welding contractor welding and metalworks in hawaii and he would do this part time so after years gone by then he he wanted to try and do it again but at this time mr sofie pulled out of hawaii so he started his own and called it mr frosty so we we took we went to uh took you know by that time the truck was all beat up and everything the old mr softy truck so we wanted to we did a reconnaissance uh mission back to philadelphia and we were going to buy an uh a truck out there but there they no longer was in the hawaii territory so we just looked at everything uh took some pictures came back and built the mr softy truck registered the name and in the in the early 90s my dad went through waimanalo so he was very very popular in waimanalo area that's amazing that's impressive to rebuild it yeah and then after after that i i kind of uh got involved in the travel industry that allowed me to get off island and travel internationally and met a lot of contacts out there until finally i was offered a position to manage a printing factory out in thailand so being around engineering and everything about no experience in making tubes or printing my boss basically told me get learn how to do printing uh printing and tubing on my own so i was the hr manager so yeah see this so i had to go and learn this and i had a great team around me and i got to uh meet with all of the machine manufacturers in japan in switzerland and every they would all come down and so we we had a a great team after after that i was in charge of the joint venture that this company had called ccl industries and tai sa corporation and i was a joint venture coordinator so they built a new factory so i was in charge of building that uh factory out there and again very very confident in me through me and dancing build me that factory so i and and before before all of this happened and when i first got into thailand i went to the university uh julia university studied thai culture and the language so i'm fluent in the entire reading writing and speaking so i got to communicate with all of the workers and basically uh yeah the factory was built so after after a while and and being out in asia um i got to meet uh in hong kong uh hong kong movie stars i went to manila i got to meet the president of the philippines eric estrada so being exposed in asia yeah so i got i got to see um a lot so and being in in business and everything before and just basically importing exporting so i i kind of came up with the the um how to i i kind of thought and read this book i think more for motivational speaking a book in 1912 called think and grow rich by napoleon hill wow yeah and that kind of just put your your mindset and and learn from your failures and then end up where i am today how can i i used to think okay everything is based on world economy expendable income if the economy is bad how are you going to recover so that's why i decided to get into commodities i decided to file patents on my experience and being involved in british american tobacco projects and then just basically doing everything uh how i think and and working with engineering and with the team and came up with a a a good product and i was issued about eight patents yeah cigarette cigarette box packaging that increases the life of shelf life from seven months up to a year which is a lot more savings yeah so now from this point going to so this is our this is our brand our cigarette brand saucer this is the uh this is this one it actually is the cigars so it comes like this and then you have uh we have our own cigar brand line and we also have our own cigarette line and this is actually again the packaging and the box is what we do so we started getting into commodities and so what can withstand any economic downturn so that's how we got into uh tobacco then the pandemic hit [Laughter] so which of course is a respiratory issue with so of course our business way to us answers so how really did people stop smoking well not stopping it's a matter of governments governments for like importing stuff they shut down automotive warehouses and everything like that oh i see i said being that our our main market was in uh africa so we would have a lot of oh so you couldn't get things in and out yeah we couldn't get things in and out and because of yeah the slide you see here is our first customer from africa and we actually made the uh this is the benin flag from the thing so this was our yeah introduction to them because they were so intrigued by the name saucer now saucero it means like latin dancing and i had no idea that latin dancing came from africa benin you know so yeah so when they approached me and they said hey we got this um did you know the story on salcero that that it came from africa and then it went to cuba and then through the rest of south uh south america so i was like wow yeah so that's how we got started so in the pandemic hit and then so we used all of our resources how can we we help in in this pandemic and using our machine expertise being that all of my patents is based on uh the machinery of the packaging not uh we we just developed the the subset of brand just for customers who wanting product because they're kept they kept asking so i said okay so um but basically the the patents and everything we i had a meeting with the thai government with the indonesian government and also the china government china tobacco which is the largest uh tobacco company in the world with 172 billion in sales in china alone so yeah so we're developing our own uh the cigarette machine to fit the patent so um yeah so i have uh i don't know if i put i had enough slides on the uh this is the uh mass machine okay that uh that we're doing a little bit ahead but that's okay but this is the machine that we're going to be starting with in the the ftc in hawaii and um so our this machine is quite easy actually compared to a cigarette machine so that's why um everything already and this is actually one of our suppliers for a piece of the cigarette machine that in china is just amazing how they they're so innovative in china huh so did they retool like a cigarette manufacturing machine to do it they were actually doing the they were actually doing the label machine for us so but because of the uh and their business started going down as well so um they started retooling and and they made this and got all ce certified and everything so that is amazing yeah so they they so we so our engineers said i i we we met and we talked and we say hey well i said well how do you folks feel about this they said this is easy nothing compared to the things so the process is really easy so working with the supplier and for in business uh is for me i think more important than money is relationships and so you guys were working with this china equipment manufacturer already for your your other products yes for the uh for the uh wow and so your patents are actually for the equipment design uh it's actually for the actual uh this design but without the design for yeah without these design for the box you cannot have the machine because the machine has to make the box so he goes it goes any hand wow that is that's amazing and so you worked with them to [Music] get the face mask equipment yes the face mask and everything so i tried to uh what i wanted to do is we bought in the face uh the well if you were to import as you can see if you go to walgreens or everything like for a pack of 50 i mean right now in san francisco or in in hawaii you're looking at paying about 34 a box of 50 of the regular mass and it's because there's a big tariff that comes in from from china so everybody is importing and the actual melt blown which is the middle part of the mask is the part that that actually stops the virus from coming in the filter part yeah that is like you cannot get that yeah this is the melt blown machine okay so it's it's very it's a very simple process so it's like granules that come down and it's melted and sprayed onto the conveyor belt and then it's cut into different the the um like about 175 millimeter per roll so and then there's like a lot of 12 waste that we can actually we will also have a recycling machine that will be able to recycle back down to the granules and you can reuse that with zero percent waste wow and would people be able to turn in their old masks for you to recycle that's another thing that we're looking at like all of the masks that you see that's thrown away because they use it and they throw it away and yeah they're finding it in the ocean they're finding it i mean it's in landfills and you can imagine now it's law so you can imagine how much mass is going to be out there so we would be able to like pay people to collect all of this mass and we can pay per kilo how many and when we bring back and we'll be able to shred it down and then it'll go back through the uh the process of being re-melted down and back into the granules and we can reuse it again and it'll cut the cost yeah and you're planning to do this all in hawaii all in the ftc yes that's awesome that's going to be amazing yeah what was what was one of the biggest challenges you faced when first starting to develop this idea and trying to get things here to hawaii well being opening the the business in hawaii or in the u.s was a little bit uh a little a little bit challenging as far as getting started especially especially now in pandemic where cash is scarce liquidity is very very scarce and all these businesses is going uh out of business so what we did was we put together our resources and and of course uh working with banks and everything was was a a huge issue when i when i first came to the ftc before the pandemic and we were planning on doing what we were doing working in the free zone in thailand i wanted to replicate here in the u.s so we immediately talked to scott um yeah scott yoshida and he just opened the he was so open armed and just was like i haven't been to hawaii in a long time i've been living in asia for 27 years so when i came back and he had that aloha spirit i was like i was like wow you know it was like he just opened it was just felt like really at home and miss home actually after talking with god and stuff so me and my business partner we came down and and then he he opened up the warehouse and saw and everything and showed us and i was like wow this is i mean everything what we what we wanted so when we wanted to change and and come into the freeze tree zone and then the uh pandemic hit so i couldn't come back so and then i wanted to open up and then that's when i met surumi and surumi has just been uh an angel i mean the uh her whole team and yourself scott everybody the whole team has just been so helpful i mean and surumi even helped me open up my uh to become a tenant at the free trade zone remotely from thailand back and forth she helped me back and forth and then with the with the tax office so forth and so on and and so when i came back and all any issues i had i was running into roadblocks and i would go hey it's rumi you know and she she then i noticed on the website that you folks had the u.s uh export import bank so i was like is there any way that it could help because i'm having trouble with the i don't want to name banks but you know even locally or in in california and i mean everybody was just i mean just so the cost and everything was just not what i wanted so i ran across that that especially with a new business right especially with a noob is exactly where you know and nobody there is no loans out there i know if anybody ever tried with loans out there for startups is is is yeah not there so that's why we yeah yeah yeah so so example one example of a problem we had was the uh letter of credit okay for me to purchase my machine to to get all of the stock everything so that we can at least get running we can uh i can bring in my my my engineering team to come down to hawaii and train to train the new workers once the machine is is set up so to get everything and with the chinese new year and everything so the timeline was kind of tight so when i went to these two banks that i had signed up and then they was like oh you would have to come in you and because i travel frequently it's like that would have been a an issue for me so immediately it was like she she hooks me up with the u.s import export bank and he calls me immediately and say okay if you cannot we can do this do this and so i tried one more time with the bank here in california and and it i think they told me i would have to wait six months to oh oh yeah because six months that i would have to have that relationship with the bank to start so i was like oh my gosh so i said i called more so when you hooked me up with greg moore hey greg i having issues with it so immediately he hooked me up with uh this bank that has a direct relationship with china and works all with the uh import export uh businesses so and we got that so they actually understand exactly what you're trying to do right exactly yeah so that that really helped us out a lot and and even uh uh insurance as far as insurance when remotely nobody would touch ppes you know from from insurance so uh why yeah because i i think because of the virus and the live liability is like oh i see a big liability so yeah so we we made some some adjustments as far as changing ppe's to hey this is just gonna even though if it's medical grade we're not um we cannot clean it don't claim it yeah medical grade so you know but people is gonna just buy and it's high grade but it's just gonna be like a disposable mass that you can wear and have that have that protection and have um uh because right now i know the cdc claim about the the cloth mass and everything is good but you know when you put cloth and you're washing it and you're putting you're kind of breathing in this thing so you know that's the thing with having the the m lt blown this was made for specific things and yeah and the pricing that they had out there in the market is just gouging people how can you gulch people in this in this economy so the cost is is like pennies on the on the dollar that's to make so we're gonna make it yeah so and being made in hawaii and and having the benefits the tax duty uh benefits of making the product in the free trade zone uh this would benefit hawaii a lot is there anything else you're importing aside from the equipment like is there any raw materials or anything that you need to import from another country the raw materials again will be coming from china everything would be in the uh container so this first container is just basically a test run to get things going then the second uh material would be coming uh in a full 40-foot container and then once we get running eventually we want to uh have the melt-blown machine that was that was shown earlier so the machine would allow us to to uh make our own um fabric and right now um we we worked we talked with uh yeah that's the the our brochure for the um getting to know all the information about our our melbourne machine but uh and we i had i was in talks with exxon mobil and about the because say because at that time china uh was so expensive because the demand like back april was so was so high it was ridiculous it was like a hundred because everybody wanted yeah 128 000 us dollars per ton of the material so after i talked to exxon mobile and got and their and their distributor for hawaii and everything so and they we got it down to i think it was like twenty three hundred two thousand three hundred dollars per time yeah and they were even trying to they said we could send you just to get your thing going and there was like we're so excited we never worked with any company in in hawaii before so yeah so we'll be able to prove produce everything um uh once once every and there's still about maybe 30 that will still have to come in from from asia of the raw material wow do you just like sew for exxon mobil do you just cold call somebody and just say hey i'm in hawaii this is what i want to do or how do you even approach yeah like that yeah it was just i guess what they what they see how you do so not many people i guess not many companies is manufacturing so like this melt blown under the defense production act enacted by the last administration um they took all the milk blown um because this melt blown fabric i mean this did it makes diapers and i was i was surprised even dog diapers i never knew that existed but uh dog diapers um wipes all the the wipes i mean anything to do with the the the fabric you know with this thing it makes everything so this fabric nobody in the u.s makes so they were forced to buy from from asia so i i would say i don't know just there's a lot everything that you see online everything is imported if you go into the store everything is reported so being that this would be made in made in hawaii and in the the free trade zone which which i think is the only way basically in in as far as saving and keeping the cost down is is uh economical to to do and and for the price i mean you're looking at compared to what the price is now on the in 34 like say if you see a box mass 34 yeah yeah probably we can probably retail it for like five dollars what yeah wow that's crazy yeah so and then indulge the people you know too so do you already have people that you've been starting to market to so that you have demand already kind of built up for once you start producing yeah so so what we what we did was uh we already registered in sam's which is which is uh with the federal government uh procurement program i registered with the state of hawaii as well and i i registered under dun and brad street which is like wall walgreens costco cvs you have to be uh registered on to do business with the government right the federal government to do business with the federal government and and but and most of all but what i was very interested in not only with the the big but i'm interested in the the little people so maybe you get small mom and pop markets and mom and pop people that uh that something they need something extra like this and you know they'll be able to go directly to the manufacturer and get it at yeah not only you know not only you know for the the big the big orders but to me i think uh especially in hawaii where jobs and everything taken away and tourism uh and we all know growing up in hawaii that everything is based in tourism and and something for something like this to to hit is a testament at what needs to be done and what change and i i feel you know that maybe by this interview that maybe it would help others to try to innovate and try to do some kind of manufacturing in hawaii because manufacturing really and being in the middle of the pacific away from everything uh manufacturing is the way to go to us to be self-sustainable yeah yeah especially if we can manufacture locally for our people exactly yeah yeah i think that's great and i think i i agree with you i think manufacturing can be one of the economic pillars for hawaii if we can if we can get more people to start manufacturing here yeah okay we are closing out on our session i wanted to um ask you quickly if you have any like brief words of advice for anybody that wants to start out in the business what would you recommend any advice in the uh general okay um if you all i have to i guess i would say is if you're gonna start a business you gotta get you have to go in full steam ahead and um and and you cannot quit you know if you if you quit yeah if you if you don't quit and you keep going you're gonna fail you're gonna learn and you're gonna keep keep um improving so just don't because that's your your business right yeah you cannot you cannot quit because right now i still have staff and everything in in thailand and everybody depends on you know and you know we have a good team that we all think alike and we have the same vision and our work ethic is all the same yeah that is an amazing story like it sounds like such an adventure that's so exciting um i really wanted to thank you for your time and for sharing your story about how you've got to where you're at in this point of starting your business and i'm really looking forward to kind of coming back and doing a follow-up story on once you've started going and how things are going and um yeah how you've been doing so thank you so much for your time thank you and just saying one more one more quick shout out to cerumi and her team you folks have been wonderful and honestly we couldn't have made it to this point without all of you well thank you so much yes our team is awesome i agree thank you so much everybody for joining us on international hawaii this is think tech and we will see you next time thank you so much thank you [Applause] you