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June 2013
Branching Across Continents
By Heather Head

     In a true reversal of misfortune, and a well-deserved one at that, the U.S. is experiencing manufacturing and employment rebounds by engaging in job-creating economic opportunities with the Asia Pacific region.

     The global economic redistribution of wealth—an economic upheaval for the U.S.—has come full circle. That is, the same economic forces that have diminished our manufacturing capabilities and workforce opportunities are now the very same forces reigniting them to serve increased demand from abroad.

     Fortified by the U.S. participation in the 2009 Trans-Pacific Partnership for economic integration in the Asia-Pacific region which represents more than 40 percent of world trade, the goals to increase American exports to Asia and create good jobs at home are largely becoming a reality.

     The Charlotte-headquartered Tides and Times Group USA (TTG) is one such reality, increasing U.S. exports of hardwood lumber, creating jobs here in America, and revitalizing the region’s lumber industry.

     Now in business for over nine years, TTG employs more than 200 people in the processing and exporting of hardwood lumber. In 2012, the company produced 12 million board feet of green lumber for domestic markets, and exported 4,000 40-foot standard containers of kiln dried lumber to overseas markets, primarily China and Vietnam.

     It’s on target to produce and export 30 percent more this year, and stands as one of the top three hardwood lumber exporters in the U.S.

     President Jimmy Lee and his wife and company owner Grace Lee came to the U.S. from China, branching across continents, with roots in each.

 

Deep Roots

     Vice President of Public Relations Larry Randall and Lee spend a lot of time traveling to TTG’s timber sites, sawmills and dry kilns across the Southeast. Randall remembers one afternoon when they were driving through a rural area and stopped at a convenience store.

     “We were coming out of the store,” recalls Randall, “and Jimmy had an apple in his hand. I see him clean it, and he holds it up to the light, you know, and I can see his eyes are beaming a little bit. He looks happy. So we get in the car, and I say, ‘Jimmy, you really love apples, don’t you?’

     “And Jimmy looked at me and said, ‘When I was a child in China, we were very poor, and sometimes I didn’t have enough food for school. There was a classmate whose dad had a little apple orchard, and a lot of times he handed an apple to me. Each time it was delicious, which never could I forget.’”

     Lee smiles as Randall tells the story. “I cherish that apple,” he affirms.

     Maybe it was the constant hunger, or maybe it was his family’s history as high-ranking members of society before the communist revolution—whatever it was, Lee always dreamed of being a businessman. He wanted to compete, and win, and make sure his family rose to the high level he wanted for them.

     He knew he wouldn’t be able to afford schooling with expensive tuition, so he took advantage of lower tuition forestry universities to get his degree in wood machinery and master’s in wood science. After school, he went to work for International Paper where he rose quickly from salesman to sales manager.

     During the 1990s and early 2000s, the political and economic climate in China changed drastically from when Lee was a boy. Instead of the government controlling everything, it started selling many government-owned companies to private individuals, and trade started to grow with the rest of the world.

     By 2001, Lee saw that the tides were changing in his favor. He was approached by a lumber supplier in Taiwan, asking him to come work for them as a representative. He told them no, that he had a dream to work for himself. He would, however, be glad to work as a free agent, selling lumber in exchange for a commission.

     They agreed. Perhaps because he offered to work for 3 percent, whereas most lumber reps demanded 6 percent.

     It was a good deal for the supplier, and it worked well for Lee. Most reps lived in Taiwan, with higher living expenses, while Lee took advantage of lower costs in his country. Working out of home offices, he took advantage of low overhead, and in six months had generated the equivalent of $100,000.

     “For somebody who started with $50, that was pretty good,” smiles Lee. Lee put the money straight back into the business, and by the end of 12 months had generated over a million dollars. And after that, revenue doubled every year.

     Before too long, Lee began sourcing hardwood from America instead of Taiwan, where it had traditionally come from. He was among the first to do so. Little did he suspect that in a few short years, both he and his wife would be in America sourcing American hardwood lumber for their sales and distribution companies in mainland China and Hong Kong, Tides International Co., Ltd. and Tianrun Lumber Industry, Inc.

 

Branching Out

     It happened in 2002—the event that changed the company’s trajectory. Lee had paid for two loads of lumber from a New York supplier, for a total of $38,000, and the supplier had disappeared without delivering the goods. Lee determined to come to America to take control and source his own materials.

     Of course, coming to the States is not so easy as just deciding to come. It took a year to obtain a visa, and ultimately it was a student visa—to attend the National Hardwood Lumber Association’s lumber inspector school (NHLA) in Memphis.

     An education at the NHLA is a ticket to significant opportunity in the American lumber market, says Lee. He had won entry into the school, and the visa to allow him to study, but he still had some big challenges in store—not least of which was the entirely new culture.

     “I came into the States the last day of 2003,” recalls Lee. “In China, New Year’s Day is a happy day, when family gets together. So I came to the States alone and I felt really lost. I didn’t even know how to order a meal.” 

     He recalls being baffled by seeing the item “ranch” listed on a menu, and thinking that it must mean a really big meal, because he had learned that “ranch” means a large, expansive space for raising cows or horses. He became even more confused when the waitress explained that it was a dressing, because he knew “dressing” meant something to do with clothes.

     “That happened to me quite a lot,” he says. “People laughed at me.”

     Despite the challenges, Lee says America was better than he expected. The lady he rented from helped him with the language, and he did well in school. He liked the people and saw lots of opportunity. So he asked Grace to join him, and she too attended the NHLA training (and graduated at the top of her class, Lee is proud to share).

     Within a year of graduating from NHLA inspector school, Lee started Tides and Times Group USA as a new company in the U.S. and won a work visa based on his investment in creating U.S. jobs. Grace joined him as a sales person a year later.

     “She was born for sales,” says Lee. Very quickly, her performance outstripped the competition. Lee put her in charge of COCO Lumber, one of TTG’s subsidiaries. TTG, originally based in High Point, grew quickly. Meanwhile, the company in China was still growing fast, and Lee prepared to sell it so he could focus on the U.S. business. That sale was complete in 2008.

 

Growing Fast

     “I was working 16 hours a day through the week most of the time before I hired the first employee, Larry Randall, in 2007. Larry understands not only the culture of the Southeast, but also the hardwood connects and the nuances to this industry. With Larry’s valuable set of competencies to the company, I only need to work 12 hours a day,” says Lee.

     Lee subsequently rounded out his top management team with the additions of Grace Lee, Herb Nanney, Ralph Laughter, Steven Wu and some other. He found that the Chinese competence and the southeast U.S. competence created a formidable partnership.

     “Now you can see our growth,” nods Lee. “For export alone, we handled 37 containers in 2004, and that number increased to 220 in 2005, 460 in 2006, 902 in 2007, 1,548 in 2008, 1,753 in 2009, 3,225 in 2010, 3,821 in 2011, and 4,018 in 2012. The key is the managerial staff and company strategy.”

     However, the company still had obstacles to overcome, the largest being the dwindling supply and increasing competition for export-ready lumber. TTG acted aggressively, purchasing green (undried) lumber, and having it custom dried. Then the company began purchasing sawmills, so it could buy standing timber and have it sawed, dried, graded and sorted in TTG facilities.

     Once again, the timing was perfect. Most lumber buyers had hit a wall in response to the economy. Where they had always relied on short-term credit to make purchases, collecting revenue on the other end, credit was suddenly unavailable. Simultaneously, sawmills and drying kilns were shutting down all over the region as demand for their products dried up.

     Lee’s financial strength, due to his business success in China, placed him in a perfect position to make cash purchases at historic low prices. As a result, since 2009, TTG has purchased, reopened and improved eight facilities in North Carolina, South Carolina and Virginia, including sawmills and hardwood dry kiln facilities.

     Although the company still purchases about half of its kiln dried lumber need, it has also continued to purchase sawmills and dry kilns across the Southeast. TTG’s subsidiaries now include Oak Valley Hardwoods, Inc.; COCO Lumber Company, LLC; Tides International Company; and Bluesky Lumber Industry, LLC.

     The company has created approximately 200 jobs, more than 140 of which were added in the state of North Carolina over the past three years. TTG expects to expand its business to New York, Pennsylvania and other Northern states in the near future.

     TTG has come a long way from initially sourcing hardwood lumber from American lumber manufacturers. As the market has changed, the company has changed strategy and even begun marketing lumber in Vietnam. TTG is now one of the major oak-flooring suppliers to the U.S. flooring industry and one of the major hardwood lumber suppliers to overseas markets, especially China and Vietnam. Nearly 40 percent of annual exports are from the sawmills in the Carolinas and Virginia.

     Randall says that size, and Lee’s reputation, have their advantages. Besides economies of scale, TTG is a preferred buyer across the region due to the size of their orders and the fact that sellers know they will be treated fairly. At the same time, Lee’s consistent record of fair dealing means that he can always export on a ship where many exporters are vying for limited space.

     This combination of strengths has contributed to TTG becoming one of the top three lumber exporters in the country. Which is not, apparently, good enough for Lee. He plans to become the No. 1 lumber exporter within the next five years. And then he plans to start an entirely new business.

     But, Lee says, they do plan to slow down slightly over the next few years, so he can stay healthy. Instead of shooting for 100 percent growth each year, they’re going to settle into only 30 percent.

     Wood products imports are predicted to grow as China remains the global gorilla. North American lumber prices are forecasted to soar in 2013 and reach record highs in 2014. A new five-year outlook shows that supply and demand conditions in wood products for the long-awaited “super-cycle” are now taking hold, with the full impact still some 3-plus years away.

     Lee is quick to credit the hospitality and support of the Charlotte Chamber, the Charlotte business community and the people of North Carolina. He’s also a member of the Chinese Chamber of Commerce. And he hasn’t forgotten those apples—he makes sure his companies give back to their communities regularly.

     In retrospect, Lee says coming to the U.S. was the best decision they ever made. They love it here and they love Charlotte. Oh yeah, about that new business he’s going to start when he’s reached the top with this one? It’ll be a high end restaurant. Because for all his success, Lee hasn’t forgotten what it’s like to be hungry.

Heather Head is a Charlotte-based freelance writer.
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