Cormark International

When a successful South African manufacturer decided it was time to think bigger, its eyes turned to America—and, eventually, to Western North Carolina.

Unlikely Beginnings

In the early ‘90s, Fabs’ brother, Max, was working for a lumber company in South Africa, but they were in financial trouble and had decided to close down. Max pooled his money and funds from family to purchase the equipment and inventory and streamlined operations from 50 employees down to eight. Within a few years, the company had fully recovered and blossomed into one of the largest molding producers in South Africa, with 120 employees. Around the same time, Fabs was searching for an internship to complete his architecture degree at Wits University in South Africa. As Fabs notes, “The problem was, there were no jobs. Everything was changing.”

That “everything” included the end of apartheid, and the changing political tide meant that jobs for a young, white African were scarce. With bleak options in his chosen field, Fabs was grateful when his brother asked him to come on board at the manufacturing company. Recalls Fabs, “He said, ‘You must be a laborer before you can be a boss.’” After earning his stripes, Fabs was put in charge of overseeing transportation for a few divisions, like decking and flooring, which quickly morphed into overseeing transportation for the entire company. “We merged all the divisions after about a year,” Fabs explains, “and then we started thinking bigger.”

That bigger thinking led to the brothers deciding they wanted to move to a global location, and at first, they considered Italy and Australia. “We were born in Italy, had spent time there, and knew the language and culture, but owning a business was too bureaucratic. With Australia, the competition from China was just too tough, so we started looking at America.” The brothers already spoke four languages, so that wasn’t a barrier, but they recognized that they couldn’t compete with America’s mass producers, which led to their eventual focus on specialization.

To get their foot in the door in the United States, the Corte brothers decided to open a franchise, and since Max was familiar with hardware stores and lumber, they contacted Ace Hardware. This led to a period of scouting for a franchise location that fit one piece of criteria: location. “We wanted it to be in the Southeast because of the easy flights, immigration laws, and no snow!” Fabs says, laughing. They visited Florida and a few other locations, but their visit to Asheville sealed the deal.

“Our dad always told us we shouldn’t work for the man, so it was inevitable we would become entrepreneurs,” Fabs recalls.

After about a year, they launched their second American business, Cormark International, and started small, renting a 3,000-sq.-ft. warehouse space in nearby Weaverville. The goal was to sell products manufactured by Max’s lumber company in South Africa and also source and sell hardwoods from the continent, but when they purchased two containers of cutting boards and lumber, it sat with no sales for several months. However, within a year they had landed a contract to sell their cutting boards in Frontgate catalog, which focused on luxury home decor and furnishings, and eventually an agency in Atlanta picked up the boards and sold them to kitchen specialty stores, as well as some mom-and-pop retailers throughout the region.
This slow-but-steady progress gave Cormark the stability needed in order to focus on growth. To prepare for the next stage, Fabs read Guerilla Marketing, a best-seller touted as a book written for small businesses “with big dreams but tiny budgets” and originally published in 1983 by famed business writer Jay Levinson. “I would go to woodworking clubs and give free talks,” says Fabs. “I also went to craft fairs and we started selling direct to craftsman.” Although the direct retail part of the business only generates about three percent of their sales today, Fabs feels it was crucial to opening doors for Cormark, and it helped give the company a footing in the community.

In 2002 Cormark landed its first large wholesale client, while simultaneously looking for more strategies to move inventory and present it in new ways. “We looked at how restaurants operated, slicing and dicing, like using salmon three ways to make a salmon salad, salmon burger, salmon platter. We were fine with serving a la carte, aka small orders, to whoever would buy,” Fabs says. At the time, Cormark only offered about 10-15 wood species, with an eye to expanding their offerings constantly. To help grow their inventory, they also started offering domestic species. “We felt it was a natural progression of our business plan to offer a full complement of premium grade domestic and exotic hardwoods.”

That same year, Fabs married his wife Laura, a fine arts graduate from the University of North Carolina at Asheville, whom he met when she worked at the family’s Ace Hardware. “We worked a lot together, while I was juggling the store and growing Cormark,” Fabs shares. Today, Laura manages the books at Cormark, and the couple has an eight-year-old daughter, who often spends a few hours after school at the family business.

Things progressed so well that in 2006 the brothers sold their hardware store, and by 2008 Cormark was finally ready to build its own facility on Reems Creek Road just east of Weaverville. Despite the recession and real estate crisis, they were able to secure a loan through BB&T, and Fabs still works with that same local BB&T. “They were really great to us despite everything that was going on with the economy,” he says. By 2010 their new facility was up and they began incorporating additional domestic species along with foreign species.

In 2013 Cormark earned a Level 2 customs clearance, which meant they could deal in endangered wood species after 14 years of having a Level 1 clearance. “We had to earn it by always being perfect, crossing all ‘T’s and dotting all ‘I’s,” Fabs explains. Then, in 2014, tragedy struck: Fabs’ brother was in a horrific motorcycle accident that left him in a coma and with severe brain trauma. “I was in ‘holy shit’ mode,” Fabs says, “and on his good days, I would scribble notes while he told me about parts of the business that he used to handle.” Yet the groundwork the brothers had laid ultimately paid off, and since 2013, Cormark has enjoyed between eight and fifteen percent growth each year. Fabs still talks to his brother—who now lives in Montana—almost daily to share a recap of the day, but the future of Cormark sits squarely on his shoulders.

Challenges

Being part of an agricultural products industry, Fabs is hyper-aware of the growing battle for land, which pits those in the lumber business not only against each other, but also against any industry that relies on land to source its products. “We constantly look for red flags: prices too low, bad practices, unknowledgeable people,” he says. Unfortunately, he is also all too familiar with companies cutting down large parcels of land, rendering the area barren and growthless for seasons or even years. “We’ve never understood why people go in and just cut everything to make a quick buck, when they could do things the right way and go back to that land again and again,” Fabs says, shaking his head. (For more information on land clearing, see the May 2013 Capital at Play article on John Fletcher and the Pisgah Hardwood Corporation.)

He has seen greed rear its ugly head in the industry in other ways, too. “Someone who has no idea the value of their trees and what people will pay for exotics will sell what they have for pennies. It’s horrible.” Other times, landowners will discover whole sections of their forests have been cut without payment or permission. These examples of selfishness visibly disgust Fabs, but they seem to also motivate him to help make the industry better and be a source of empowerment for suppliers and their communities. But he has been on the receiving end of greed, too. He once had a customer inform him that a special tree had fallen and the owner was looking for a buyer. The tree in question turned out to be a famous white oak from the movie The Shawshank Redemption. “I called him and began some dialogue to find out what he wanted for the tree. His response was $100,000 plus cost of extraction, and then we would have to do all the milling into useable lumber products. After assessing the size and possible volume it would yield, we quickly realized that it was extremely expensive and not economically viable.”

Internally, waste is a battle they fight often, with high quality long cuts or pieces for big projects sometimes resulting in 92 percent waste. Yet by having an open door policy with local craftsmen, most of this gets turned into wood jewelry and other small products. These leftovers also become build-your-own cutting board kits and pen blanks for making custom pens.

Still, not all challenges they’ve faced have been negative. Many years ago, in order to land a contract to buy sacred Pink Ivory wood, Fabs traveled to the southern region of Africa to meet with tribal chiefs. He recalls, “We spent a couple of days following customary protocol, which included drinking sorghum beer. Finally, the chief would ask our reason to visit, and we would ask permission to harvest a tree. A ceremony would follow, as they believe their ancestors’ spirits live in the tree, and this would release them.” Today, Fabs rarely goes on these types of expeditions, and instead squeezes in trips abroad with his family since he has built up a network of brokers and contacts that serve as his boots on the ground.

Local Impact, Here and Abroad

Thankfully, agricultural products business owners like Fabs, who have built a brand on doing things the right way, still exist and continue to make a difference. Cormark’s website and marketing materials emphasize their commitment to sustainability and reforestation, but even more eye-opening are the relationships he has built with ten small operators in Africa and beyond. “We pay for the logs upfront and trust them to deliver the product to us,” he explains. Most of the time this arrangement works well, but a couple of these purveyors have yet to deliver years later, and probably never will. Fabs seems nonplussed by this fact, quickly shifting into a feel-good story:

Cormark continues to purchase wood from this community, long after the missionary returned home.

At the warehouse, Fabs is committed to promoting work-life balance for his employees. The warehouse operates between 7:30AM to 4:30PM Monday through Thursday, with quitting time typically 2PM on Fridays. “We’re adamant about people not working late or on weekends because family time is important. We also don’t want people to get burnt out or feel overworked,” he says. Retention is another key focus for Fabs, so he tries to instill a sense of pride and ownership in the company and isn’t shy about his desire for them to grow with it. “We aim to hire people who have a passion for what we do; many of our employees are woodworkers at home and have little stashes of wood with their name on it to reserve a piece they want to use one day.” If a new species comes in? “We’re all like kids in a candy store!” He talks for a moment about the smells of wood (“You can tell if the wood is good—new, fresh—by its smell.”) and how he spends hours each day focused on quality control, evoking an image of a brewmaster sniffing his hops and batches.

The educational component Fabs relied on in the early years when giving talks to woodworking groups remains an important part of giving back, too. Local college groups come through for tours and to learn about the industry, and local craftsman love to come in and browse or show off products they’ve made. “One guy makes guitars and came in barefoot, unannounced, played us one song, and left,” he says, chuckling, “and one couple came in who makes wooden sex toys. We’ve got some interesting characters that come through our doors.” This includes local craftsmen like Ray Jones, David Scott, and Brian Brace, and many more members of the Southern Highland Craft Guild.

Relocating to Asheville also unintentionally started a trend, as other exotic wood importers have followed Cormark’s lead and started up their own businesses in Western North Carolina—in fact, Fabs says that most of his main competitors operate in the area. This competition means he likes to keep some things close to his chest, including revenue totals and the contacts he has cultivated over nearly thirty years. It also means he can see Cormark thriving for a long time to come.

“There’s a lot I want to do still, lots of ideas we want to pursue,” he says excitedly, sliding his hand over the large, beautiful wood slab table that sits in Cormark’s simple conference room. They obviously keep their operation lean, but it’s evident they’ve outgrown the space already, as stacks of wood occupy every crevice in the warehouse, where they also dry and dimensionalize raw product.

Future for Cormark (and Exotic Woods)

Forbes magazine noted recently, in the article “Millennials and Quality: A Search for a Better Everything,” that: “In the world of capitalism, millennials are showing strong preferences for the ‘Buy It For Life’ mentality—that is, they want to buy vehicles, homes, furnishings, appliances, and other items that last a long time or can be serviced by the user to extend its useful life.” Fabs has witnessed this shift firsthand more rapidly in recent years. “There’s definitely a changing of the guard happening. Just look at how houses are getting smaller,” he says.

He believes the exotic woods industry is at a fever pitch, which means he’s constantly having to reign the business in and focus on growing strategically, even while others chase rapid growth. “We are on a surfboard on top of the wave; we’ve got to ride it out without crashing,” he says. To stay on top, it’s more important for Cormark to be known for quality and service over price, and to always take good care of their customer base. It also means innovating and being a good steward of the environment. In the coming years, they hope to use solar and biofuel to power their operations: “Turning our waste into biofuel is a big investment—more than $250,000—but it’s important that we do it in the future.”

The future also holds the potential for many new species to be discovered. In tracking down its supplies, Cormark typically comes across one or two new species per year and shares these with the Research Forestry Lab in Washington state. “We have to be very careful about using new species because we could harm them,” he explains.

Regardless of what they’ll face in the future, Fabs is confident they’ve diversified between industries and states well enough to sustain their growth. “We work with yacht makers, instrument builders, furniture makers, home and commercial builders, car manufacturers, the list goes on…” In the meantime, he plans to continue enjoying and learning from the regional craft beer industry as well as his new interest: bourbon. “The high-end bourbons, that’s like our industry, too,” he muses.

Quality over quantity, indeed.