"Purchasing land in Kapolei Business Park marks a major milestone for Hoku Scientific as we begin the automated production of our fuel cell membrane and MEA (membrane electrode assembly) products," CEO Dustin Shindo said. "The facility will include office space, research and development labs and production space, which is scalable to meet the growing volume requirements of our customers. We expect to break ground on the building in early 2005."

Earlier this year, Hoku, which has been operating in Honolulu, planned to move to an empty telecoms facility on the Leeward coast, but the plan ran aground on approval processes.

Hoku Scientific recently announced an agreement to sell significant volumes of its Hoku Membrane and Hoku MEA products to an undisclosed global automotive company. Earlier Hoku Scientific formed an alliance with Sanyo Electric Co. Ltd. to develop a membrane electrode assembly using Hoku Membrane for integration into Sanyo's own fuel cell systems. In Japan, stationary fuel cells, which provide residential electricity and hot water, will be marketed as early as 2005.

"Hoku Scientific's research into cutting edge technologies is exactly the type of business Kapolei Business Park was designed for," said Scott Mitchell of Colliers Monroe Friendlander Inc., sales agent for the park. "The park's advanced connectivity should benefit their operations."

Hoku Scientific is the second lot sale since the ownership of 97-acre Kapolei Business Park changed hands in June of this year. Another 10 lots should close over the next several months, due in part to low availability of industrial land for sale elsewhere on Oahu.

Hoku Scientific is financing the construction with a loan from American Savings Bank, Hawaii¹s third largest financial institution. "We are delighted by the opportunity to finance the growth and expansion of an emerging Hawaii company," ASB Senior Vice President Gabe Lee said. "This financing is consistent with our commitment to the community and the growth of local businesses."

Fuel cells use hydrogen and oxygen to generate electricity with only water and heat as byproducts. This technology is the leading zero-emissions solution under development by automotive companies to ultimately replace the internal combustion engine. The consumer availability of fuel cell vehicles, however, has been hindered by high cost and limited performance and durability. Hoku Scientific's proprietary fuel cell membrane and MEA technologies were developed to accelerate the commercialization of fuel cells by lowering their cost while also improving their performance and durability.