Partners from China and Vietnam gather for a group photo in front of a row of FSC certified Teak logs at the VNAM Trade LLC plant in Binhduong, South Vietnam.
St. Paul, Minnesota–From his office here, Francis Phan oversees the import, export, trade and sourcing of lumber for his company VNAM Trade LLC. Never mind his partner factory is in South Vietnam, trading partners are on the West Coast and Brazil, and that he maintains connections in countries the world over. In this day of emails, faxes and cell phones for instant communication, it would seem he would never have to leave. Yet driven by his philosophy of quality control, Phan’s office may as well not even have a chair.
Phan’s experiences over the years have convinced him that success in the business requires him to personally inspect all the lumber he trades, building relationships and trust with sources in Africa, Asia, North and South America. “Shipping container costs and fees rise daily. I cannot afford mistakes,” he concluded.
A wide assortment of timbers, logs and rough sawn logs, pass under his scrutiny, including Rosewood, Teak, Balphia Kirkii, Doussie, Padouck, Tali, Pau Ferro, Eucalyptus (Red Gum, Blue Gum), Ebene, Pinkadou, Pau Rosa, or any mix of other hardwood species.
Much of the Teak, popular round the world for the manufacture of indoor and outdoor furniture, is destined for Phan’s Binhduong, Vietnam-based factory, Lam Viet Furniture, which specializes in outdoor furniture.There, the 700 factory employees are assigned the various jobs to air-dry, saw to dimension, and send lumber on to destination or manufacture it into furniture.
Most of Phan’s business ventures are family-run and managed, though his FSC certified company branches in California and elsewhere are run by partners, as is the South American division, managed by Joe Winterhalter for the last five years.
VNAM Trade received FSC certification in 2006 from SmartWood Rainforest Alliance, which verifies wood products as harvested from well-managed forests and adhering to strict environmental and socio-economic standards in accordance with the principles and criteria of the Forest Stewardship Council.
FSC certified wood products have been a priority for Phan for the last six years, particularly export timbers bound for sawmills or furniture, flooring, and deck manufacturers in Europe. “Their buyers have more confidence in FSC certified than noncertified because most businesses in Europe require high quality furniture, especially in Great Britain, Spain, France, and Germany. And they are for ‘green’ products. So logs must come from FSC forest plantations, then be sold to another FSC trader that sells to the FSC factory, and they keep the chain-of-custody all the way to selling FSC certified furniture.”
At the manufacturing plant in Binhduong, South Vietnam, Francis Phan, who oversees the import, export, trade and sourcing of lumber for VNAM Trade LLC, and a Brazilian forest owner discuss Eucalyptus logs.
From Costa Rica alone, Phan buys over 6 million board feet per year, supplemented by other species such as the Eucalyptus, Acacia, Padouk, Doussie, Tali and Wenge originating in Panama and Bolivia, and the largest source of FSC certified Teak, from Brazilian forests.
From Africa, on the Ivory Coast and Ghana, Phan buys mostly Doussie and Teak. He prefers to avoid doing business with some of the countries on the African continent because it’s often risky, timbers are not FSC certified, logging is not licensed and is destructive to the environment, though currently, much is sold to Chinese companies. Because of the 2008 Olympics and resultant economic boom, many people can afford hardwood flooring and will purchase lumber for it, even illegally. As of last year, most countries are not allowed by law, to export logs. Timbers or rough sawn lumber cannot be thicker than 30 centimeters or 11.8 inches. Phan considers the FSC certification a deterrent to illegal logging.
The average amount of lumber inventory Phan carries is between 1,000m3 to 5,000m3, or 423,776 to 2,118,880 board feet. Most of the lumber he buys is shipped in 20 or 40 foot containers. Depending on the size of the timbers, any number from 2 to 300 containers are shipped at once.
Phan has likely not sat in one place for very long since 1980, when at age 12, a 7-day long boat trip carried him, his family and over 130 other passengers from South Vietnam to Indonesia to escape Communist domination and then another across the ocean to America.
His father, a former military policeman for South Vietnam was thrust into prison for four years, the family’s house seized and possessions lost. “We had a 50-50 chance of survival on the ocean, but it was our only chance,” said Phan. The family eventually arrived and settled in the Twin City in the dead of winter, with nothing but terrible memories and his country’s mott “Independence - Freedom - Happiness.” The cold was a new experience, and it is one he likes.
Phan sees his life as having two beginnings. “When I came to America I was reborn. Now I have to work hard and do my best to succeed.” Though his ambitions push Phan to work hard, he doesn’t want his two children to follow in his footsteps. He had studied incessantly and his first job was delivering newspapers for $90 a month. He worked in the restaurant business with his father, who then opened his own restaurant 15 years ago, which Phan took over in 2000 and his wife Victoria now runs. He had begun trading in the garment and fish industry, which he continues within the VNAM Group. For a time, starting in ’98 he sold dry soy milk and bean products in Asia for the USDA. As Vietnam and China opened progressively more to world commerce, a friend suggested he join him in lumber trading and search for FSC certified sources. Phan recognized the strong demand for FSC, though a comparatively small market. He noted, “The Teak forest for FSC is young, an average 9 to 14 years of age. Whereas in a young forest, the average age trees can be cut down from 9 to 25 years old.”
Phan poses in front of a shipment of Greenheart, Purpleheart, and Mora logs from Guyana, South America.
As the U.S. dollar value has dropped and the economies of the world have slowed, demand has dropped for many imports, Phan’s lumber sales haven’t slowed because of the demand in China with the economic surge and the rebuild following the earthquake.
Now Phan is on the go seven days a week running his businesses, trading in commodities that contribute to sustaining everyday life essentials, food and shelter. Currently, his major focus is the lumber six days a week, working on Sundays in the restaurant to give his wife a day off.
Most of his lumber sources currently are in Bolivia and Brazil and Phan’s goal is increasing his market in the U.S. where the demand is higher than in many other countries. He will also open offices in Dubai and Shanghai, China. His interconnectedness throughout the world, his work ethic, and prompt response on any project or sale, has built solid relationships within his business network for VNAM.
For more information about VNAM, phone:(651) 698-8408 or visit the company’s website at www.vnamtrade.com, or email: info@vnamtrade.com
