Micronesian companies display resilience amidst uncertainty
By Oyaol Ngirairikl
In the ever-changing economic landscape of Micronesia, a resilient trend stands out, with 78% of respondents in the 2023 Bank of Guam ASC Trust Top Companies of Micronesia Confidence Survey noting an improvement in their bottom line compared to the previous year.
The Top Companies of Micronesia, an annual feature of Guam Business Magazine, highlights businesses with an annual revenue exceeding $1 million. The List provides the financial standing of the companies and offers insights into the regional economic landscape in which they operate.
Challenges this year included a typhoon and a storm as well as the economic challenges detailed throughout the feature.
Responding to seven survey questions, participants addressed the improvement of their company’s position, with 21.43% stating their companies are doing “much better,” and 57.14% reporting a “somewhat better” financial status.
While this marks a slight improvement from the 2022 survey, where 74.9% reported enhancements, it also mirrors the hopeful attitude expressed in the 2021 survey amid the pandemic. Executives in the 2021 survey, which took place as much of the region was starting the work of digging out of the coronavirus-caused pit, observed a 50% improvement in business and anticipated a continued upward swing.
A notable 57.14% of respondents reported an increase in staffing numbers, with some companies expanding by as much as 50% in the past year. Additionally, 35.71% of respondents maintained their staffing levels, while only about 7% reported workforce reductions.
However, amid positive indicators, 21.43% of respondents expressed concerns, reporting their bottom line as “somewhat worse.” A new question in this year’s survey reflects buffered expectations, with nearly 50% of respondents either exceeding or expecting to reach pre-pandemic positions by year’s end.
In contrast, 51% believe recovery is still distant, with 35.71% projecting a one-to-two-year timeline for recovery, and another 14.29% expecting pre-pandemic numbers to return in over two years.
In Guam, despite revenue improvements, challenges persist. These include prolonged local government approval processes for permits and the federal H-2 process, especially for those from the Philippines, which constrain progress.
Post-COVID, companies now face hurdles in hiring and retaining qualified employees. The pandemic’s impact, including decreased global travel and a prolonged shutdown, led to widespread layoffs, according to Glimpses Media files. As vaccinations became available and businesses gradually reopened, former employees collecting federal unemployment checks were hesitant to return, particularly with reduced working hours and tourism levels still below pre-pandemic benchmarks.
Survey participants highlighted uncertainties in the economy, expressing concerns about tourism and inflated costs of fuel and other business essentials:
“Mostly world conditions, especially tourism, won’t recover until the third quarter of 2024.”
“The CNMI continues to struggle without a tourism market.”
“Not enough flight service from source markets.”
“Tourism recovery is slower than expected, with Japan down over 85%, and Korea still trailing by more than 45% compared to pre-pandemic levels.”
“Increased operating costs, as well as product cost.”
Even those anticipating further economic growth voiced concerns: “We’re optimistic for a pick-up next year, but we’re cautious due to the lack of clear signs of recovery and the strength of the U.S. dollar, which makes it challenging to compete with neighboring countries.”
Yet, amidst uncertainties, attention remains on the ongoing military build-up in the region as a significant opportunity. Executives view this as an avenue for “growth out of the pandemic,” particularly with the rise in local military contracts benefiting smaller companies supporting large-scale construction projects.
Survey answers for Guam Business Magazine’s Top Companies in Micronesia 2023
Compared to one year ago, my company’s bottom line is
Much better 21.43%
Somewhat better 57.14%
About the same 0.00%
Somewhat worse 21.43%
Much worse 0.00%
One year from now, I expect my company’s bottom line to be …
Much better 35.71%
Somewhat better 42.86%
About the same 21.43%
Somewhat worse 0%
Much worse 0%
In the past 12 months, my company’s staffing numbers …
Stayed the same 35.71%
In the coming year, I expect our staffing numbers to …
Stay the same: 28.57%
The economic expectations for my organization were fulfilled this year.
I believe the economy will provide specific opportunities for my business in the coming year.
What have you and your company learned by doing business during the past year?
Editor’s note: Companies participating in this year’s Top Companies Survey were asked what they have learned throughout the past year. The following are responses from some of the lead executives.
“The island’s two sectors — public/government and private/business — need to become better friends, work together better, share the wealth more equitably, identify and solve common problems together. Too often it’s an us versus them mindset.”
Frank S.N. Shimizu
“The Black Group of Companies continues its success as an industry leader in 2023 due to the dedicated and hard-working personnel that make up the Black Family.”
Leonard K. Kaae Sr.
Vice president/general manager
Black Construction Corp.
“We must focus on our omnichannel strategy to elevate the customer experience and drive efficiencies. Consumers should have the flexibility to transit seamlessly at every touch point whether it be online or in store.”
Kwok Wai “Alex” Yap
Atkins Kroll Inc.
“One key factor to complete a successful project is to have a team that runs the project from cradle to grave. In today’s labor market, this is not always possible. Therefore, management needs to be prepared with alternative plans in case key personnel become unavailable.”
“While committing to a new building we realized the need to increase our investment in our Human Resources so that we were prepared to meet the higher service expectation of our community.”
Gerard A. Cruz
President and CEO
Community First Guam Federal Credit Union
“2023 marks 62 years of Bank of Hawaii serving the West Pacific region, and we remain dedicated to the local communities. People come first—and that’s why we are focusing on constructing our new West Pacific regional headquarters in Tamuning. Customers can look forward to a “Branch of Tomorrow” with a modern design, a drive-thru ATM, and ample parking. We look forward to helping families and businesses for many more years to come.”
Peter S. Ho
Bank of Hawaii
“In 2023 we were reminded that we live in a disaster-prone area. Successful recovery requires every person and business to pitch in and do what is needed to rebuild and keep the communities we serve up and running. Looking ahead, businesses that want to stay relevant must evolve and build a culture of performance, innovation, and accountability. Those who do not will get left behind.”
Joaquin P. L.G. Cook
Bank of Guam
“Pacific Rim celebrated our 10th year anniversary last year. Our journey from a one-room office, celebrating a $1 million contract, to multi-offices in Guam and the CNMI with over $50 million in backlog — and growing — has been challenging and exhilarating. In the past year, our ability to improvise, strategize, and modernize on the fly as we took on more risks and faced unexpected challenges such as COVID, has reminded us of our people’s resiliency and talent. Our growth has always been rooted in our willingness and flexibility to explore and learn different markets in various regions.”
Keith J. Stewart
President and CEO
Pacific Rim Group of Companies
“Continuous education and training are essential for employees.”
Ho S. Eun
Core Tech International Corp.
“This year we learned about the status of our many processes when tested by the typhoon and improved those that needed it.”
Charles B. Hazzard III
DZSP 21 LLC
“Flexibility and teamwork are imperative to achieve success through disasters.”
Guam office manager/civil engineer
“Interesting times. Revenues and sustainability have greatly changed with pressure on tourism not recovering, but yet Guam’s overall economy seems to be stable — far more than it has been in the prior years.”
David A. Alcorn
“Even in the face of typhoon Mawar’s chaos and aftermath, our team members showed remarkable resilience, maintaining calm and patience throughout the ordeal. As we move forward, we have recorded these vital lessons to refine our response plans for any future climate challenges. The implementation of Hilton’s HEART model played a pivotal role in enhancing guest experiences, while the integration of technologies such as KIPSU, Digital Keys, and Confirmed Connecting Rooms significantly improved operational efficiency and guest satisfaction.”
Hilton Guam Resort & Spa
“At First Hawaiian Bank, we have learned the importance of adaptability in a rapidly changing economic landscape and have strengthened our digital capabilities to better serve our customers.”
Vice chairman of Retail Banking Group
First Hawaiian Bank
“This year, we faced a significant challenge with Typhoon Mawar impacting our island. Despite this formidable natural disaster, GTA’s network remained unscathed, demonstrating our resilience, and underscoring our unwavering commitment to keeping our community connected. In May 2023, we obtained planning permission for the construction of a new data center and Cable Landing Station in Inalahan. In 2022, we initiated the construction of our Alupang Data Center. Our data center expansions are a testament to GTA’s commitment to growth in Guam, recognizing its strategic importance as a hub in the Pacific. The GTA GNC Data Center is now a strategic point of presence for Cogent Communications, a top-tier global ISP, providing enhanced connectivity between the Asia Pacific region and the U.S.”
President & CEO
“Over the past year, my team and I have learned to never stay complacent, to prepare for economically challenging times, and to embrace the need for change. We are constantly scanning the economy to learn what the issues are with unemployment in Guam, and to think outside of box of how we can make a difference in closing that gap.”
Jenynne Christine A. Guzman
“Super Typhoon Mawar is a real-life example of the important role that Mobil plays in Micronesia and the islands. I’m very proud of the resilience demonstrated by the Mobil team in swiftly and safely restoring operations to meet the demand for gasoline and fuel for vehicles and gen-sets in peoples’ homes and offices.”
Mobil Oil Guam Inc.
“Commercial viability remains an enabler to resilience, as this ensures that funds and resources are available for ongoing activities that deliver the company’s missions defined within the Public Laws, as well as meet the expectations of stakeholders, however it is our view that there are bigger climate and extreme weather-related shocks that we need to prepare for in years to come. As inflation continues to linger and threaten the economy, we have learned to manage and use cost management in cutting “bad” costs and redirecting our resources toward “good” ones.”
Ramona Lea Jones
Jones & Guerrero Co. Inc.
“The most important thing we learned is increased work means increased manpower, but also increased supervision. Everyone talks about manpower, but you also have to have someone leading the pack. And more people means more supervision.”
Tutujan Hill Group Ltd.
“Our emphasis on a strong team has allowed us to achieve reliable, quality, timely, delivery to our customers. We’re now able to diversify and focus on efficiency to improve and maintain a competitive edge.”
Pacific International Inc.
“PMCI/Payless faced financial challenges in the past year due to high inflation and rising operational expenses, but we are optimistic about the prospects as we approach the holiday season. Supply chain issues have largely stabilized, though procuring essential equipment and construction material remains a challenge. Payless Logistics went through a transition year in 2022, with disruptions caused by moving to a new location, COVID-related delays, and staffing issues. We expect a healthier 2023 with a new facility and a 10-year lease agreement in place. PDC Wholesale is expanding its product portfolio and benefiting from its involvement in associations related to tourism and food processing. They anticipate growth as the tourism services industry rebounds and invests in their food processing facilities.”
Edward J.B. Calvo
PMC Investments Inc.
“Guam and the Western Pacific are going through an unprecedented period of development of data and information infrastructure including submarine fiber optic cable systems, cable landing stations, data Centers, and local on‐island fiber optic connectivity for island residents, particularly in Guam, the CNMI, and Palau. PDS is leveraging its unique resources and capabilities to participate in these new projects and help shape the future for the new Digital Information Age in the Islands. “
Pacific Data Systems
“Our biggest accomplishment this past year was a sound rebound from the pandemic and, more recently, the typhoon. Thankfully most of our Guam operations and employees proved to be very resilient. In the CNMI our recent investment in Tinian is starting to pay off as we support the military construction projects there.”
Robert H. Jones
Triple J Enterprises Inc.
“This past year we have learned the need for product innovation is greater than ever.”
Benjamin H. Ferguson
Pacific Islands Club Guam
“To appreciate the continued value of the local Guam workforce as our most valuable company asset.”
“Remaining focused on your core business operations will allow viable expansion opportunities to appear with real clarity.”
Derrick Muna Quinata
Monster Auto Corp.