Matson Navigation Co. yesterday said it has signed a $17 million contract with Atlantic Marine Alabama LLC to convert Matson's C-9 ship, MV Mokihana, to a combination roll-on/roll-off (ro-ro) and container vessel.

Modification work on the container ship will begin in April at Atlantic Marine's shipyard in Alabama, with delivery scheduled for June.

"The conversion of the Mokihana will increase Matson's ro-ro capacity in our Hawaii service by 35 percent," said Dave Hoppes, senior vice president for ocean services.

The conversion of the Mokihana is part of a previously announced $45 million upgrade of Matson's roll-on/roll-off service capabilities in Hawai'i, which includes shoreside facility improvements and investments in new information technology. Matson has two other combination ro-ro/container ships: SS Lurline and SS Matsonia.

"Matson has multi-year agreements with Ford Motor Co., General Motors, Dollar Thrifty Group, BMW, Mercedes Benz, Toyota and Nissan," to deliver vehicles to Hawai'i, Hoppes said. The Ford agreement includes Volvo cars, Jaguar and Land Rover vehicles.

Matson's roll-on/roll-off service has been used by the U.S. military to move military equipment to and from Hawai'i, Hoppes said.

Matson competes with Horizon Lines and Pasha Hawaii Transport Lines in delivery of vehicles from the Mainland to the Islands. Pasha launched its service in March 2005 with the MV Jean Anne, which offers a roll-on/roll-off service for vehicles.

"As one of the leading U.S.-flag carriers, Matson is proud to further demonstrate its commitment to supporting U.S. shipyards," said James Andrasick, Matson president and CEO. "In the past six years, Matson has awarded $584 million of work to U.S. shipyards, including over $500 million to Aker Philadelphia Shipyard for the construction of four new container ships."

Matson is a wholly owned subsidiary of Alexander & Baldwin Inc. of Honolulu.