In Hawaii, a key acquisition for HPM
HPM Building Supply, a fifth-generation business started by two Japanese immigrants in 1921 in Hilo, has acquired Maui’s leading building component manufacturer, Truss Systems Hawaii. As a result, the company has created a new division, Truss Systems by HPM.
All 33 Truss Systems Hawaii team members have become HPM owner-employees (the company has been 100% employee-owned since 2006), and the company says operations are continuing to produce locally-made wood roof trusses, metal trusses, floor trusses, wall panels and custom sheds. According to Jason Fujimoto, HPM chairman and CEO, HPM plans to keep expanding the business to serve the Maui building industry and to help address the need for housing on the island. He was kind enough to answer a few more questions for us to shed more light and context on the acquisition—as well as offer keen insights on running a successful business amid no shortage of modern-day challenges.
Q&A with Jason Fujimoto, HPM Building Supply CEO and chairman
Q: Do you see Hawaii as more (or less) immune to the kind of consolidation that's taking place around the continental 48?
The Hawai‘i building industry is experiencing the same consolidation that is happening across the nation. There are many reasons why someone may decide to sell their company, and often a major factor is whether their descendants are in line to take over the business or have pursued other careers.
In Hawai‘i, we also see the next generation moving to the mainland due to the high cost of living. Succession planning is a major undertaking for any business, and our entire industry is navigating the challenge of identifying and developing the next generation of leaders.
We feel very fortunate at HPM Building Supply that we continue to be locally owned and operated, 103 years after my great-great-grandfather, Kametaro Fujimoto, started the company with his business partner, Sanzo Kawasaki. The building industry is experiencing the same pressures that are affecting many industries across the globe, post-COVID, and we are constantly refining our strategy in a highly competitive and challenging environment.
Q: What updates would you like people not on the island to know about the current state of building and rebuilding on Maui?
Ten months after the wildfires, there is still a long road ahead for recovery. The devastating impact of the wildfires exacerbated a housing crisis that was already ongoing because in Hawai‘i, land is limited and costs are high.
The initial priority of the government and the community was to provide temporary housing for displaced residents. Now, there is a shift to focus on plans and projects to provide permanent, long-term housing. It will be critical to find solutions to build more housing that is financially within reach for local families. There are many factors to consider, and it’s important that rebuilding efforts are done in the right way, respecting and serving the local community.
Rebuilding will take time, not only because of how important it is to have an inclusive process, but because of logistical challenges, simply because of Hawaii’s location in the middle of the Pacific and the labor shortage in our state.
Q: What tips or practical guidance would you offer other dealers that are considering a similar acquisition but not quite sure how best (or if) to proceed? Any potential mistakes to avoid?
The number one question to consider is how an acquisition fits with your business strategy. Consider what you are trying to achieve and whether an acquisition will help you take a leap forward toward that vision.
Over the last 103 years, HPM Building Supply has expanded from our original lumber milling operation into a full offering of services with hardware retail, pro sales, kitchen and bath design centers, home plans, manufacturing and more.
Today, we offer a comprehensive package of services to our customers, from the foundation to the roof and everything in between. Our services are most robust on Hawai‘i Island, where we have the deepest roots, and as we continue to grow statewide, our focus is to round out our services on the other islands. Acquiring Truss Systems Hawaii gives us the ability to service our Maui customers more fully, and we know that manufactured trusses and wall panels are a huge value add for Maui builders because these products help contractors to build faster and more affordably with limited crews.
It is crucial to look “under the hood” of a company to gain an understanding of the history, the ownership philosophy, and the people. Two companies coming together can be a win-win if values are aligned—and a disaster if values are mismatched.
Make sure you understand the business from an operational performance standpoint, and keep in mind that you get what you pay for. It is a tough situation to buy a company that you need to work hard to turn around, and a much smoother process if the business you are acquiring is already high performing.
Finally, I would caution not to underestimate the amount of work and resources that it takes for the first six months to properly onboard, integrate systems and truly merge operations. Even with a strong alignment of values, there is a lot of care and attention required, and potentially a dedicated team leading the integration, to make a successful transition.