Carsten Lehn sells DAFI Tropicdane to Danish furniture company

Carsten Lehn, the founder of the Danish furniture company DAFI Tropicdane in Vietnam, has together with his wife Le Nguyen Da Bich sold DAFI Tropicdane to the Danish furniture factory Carl Hansen & Søn.

Carsten Lehn will stay in the company in Vietnam for 3 years as a designer and on the board as an adviser, but the factory will be run by CEO Lars Bentsen, previously the Production Director of Carl Hansen & Søn, who had just completed moving the Danish company’s production to a new location in Denmark. It is expected that Carsten Lehn will spend part of his time in South Africa, where he also has a house and from where he will also be able to work with the design.

Mark Nam Hansen, the 24 year old son of Knud Erik Hansen who owns Carl Hansen & Son, was incidentally instrumental in bringing the two owners together. As the story goes, Nam had written to Carsten Lehn if he could use a young engineer of Vietnamese descent who was raised in Denmark and who had just completed his studies. Carsten said yes, and Nam came out to Vietnam as an intern.

He seemed to have a good flair for furniture manufacturing and after 6 months, Nam was given the task of making the whole factory more rational. Eventually Carsten could not help asking him, how come he knew so much about furniture production, and then Nam admitted that his father was Knud Erik Hansen from Carl Hansen & Søn.

Then Knud Erik Hansen and his wife Inger came to visit Carsten and Bich, and they found out they had a lot in common. Knud Erik had previously also worked abroad, living in Hong Kong for many years. When Carsten was back in Denmark in September 2016, he was invited to dinner and here Knud Erik Hansen asked him about the future plans for DAFI Tropicdane. Carsten explained that he was still looking for a partner because he is 65 years old and although he still enjoyed designing furniture, he would rather hand over everything else to someone who could continue what he and his wife had created.

Before he left, Knud Erik Hansen asked if he really meant that. And Carsten Lehn confirmed.

Knud Erik Hansen

 

Knud Erik Hansen’s two sons.

 

Carsten Lehn came to Vietnam from Thailand, where he had establish a dog food factory.  He arrived Ho Chi Minh City in 1989 and rented two hotel rooms for a year – one as a bedroom and the other as an office. At that time, the Communist regime had only very cautiously started to open up to the market economy.

Over the past 30 years, he has built the company to a great success. DAFI Tropicdane employs today 1,200 employees in Binh Duong Province, northeast of Ho Chi Minh City in southern Vietnam where the company has its 33,000 square meter modern factory and 2,000 square foot showroom on two floors.

DAFI designs, manufactures and exports outdoor and indoor furniture to customers worldwide. The European and not least the US market are major buyers of DAFI’s furniture.
DAFI is a fast-moving company. Last year, DAFI traded for 10 million. USD and it is expected that revenue in 2017 will round 20 million. USD. The company ships every month more than 80 containers filled with furniture to the world market.

In 1999, DAFI became FSC-certified, and the company thus guarantees environmentally friendly and sustainable production as well as responsible forestry. All materials are carefully selected and all sawmills, weaving and ironwork are done at the factory in Vietnam. DAFI also complies with all applicable working environment standards and has a high standard employee working environment.

DAFI has Danish designers employed and more than 5,000 products in the collection. The company offers tailor-made mass-produced solutions for large customers who can contribute to designing the furniture themselves. For example, the sports bar chain Buffalo Wild Wings has bought 37,000 custom-made chairs that now adorn their restaurants.

From perspective of Carl Hansen & Son, the main reason for the acquisition is to secure enough capital to continue the companies current expansion. Carl Hansen & Son’s goal is to grow 20 percent each year and reach a turnover of one billion kroner in 2022. Over the last decade, the company has acquired a large number of manufacturers of Danish design furniture – most recently Søborg Furniture at the beginning of September.

“We see the acquisition of DAFI as a way to secure capital for similar investments in Denmark in the future, “says CEO of Carl Hansen & Son, Knud Erik Hansen and continues:

“The acquisition gives us two crucial advantages: First, we are strengthening financially, ensuring that we can maintain and develop Danish jobs and the production of Danish design classics in Denmark. Secondly, we are entering into completely other global markets, which also open up new opportunities for us to deploy our Danish-produced design classics to even more than today, “says Knud Erik Hansen.

“If we are to win new markets and resist the rapidly rising international competition, we need to be financially stronger. The alternative is to sit on the hands while our competitive position is weakened internationally. I will not allow that, “says Knud Erik Hansen.

DAFI will remain an independent company without any connection with Carl Hansen & Søn’s Danish production. In addition, the CEO emphasizes that the acquisition of DAFI has no influence on the production of Carl Hansen & Søn’s Danish furniture and design classics, which continues at Funen – exactly as before.

“None of our many design classics are moved to Vietnam. It is a fundamental principle for us that they are produced in Denmark, where we invest three-digit million in these years. A Wegner chair produced in Asia is not a real Wegner chair. Therefore, the whole of Carl Hansen & Søn’s production in Denmark remains. Just as we do not shut down a single workplace in Denmark, ” Knud Erik Hansen says, explaining:

“For more than 100 years, Carl Hansen & Søn has specialized in delivering outstanding high-quality furniture crafts. We do not want to compromise on quality, crafts or materials – let alone the special legacy that is deeply rooted in the company. We are aware of the traditions and Danish production that I have grown up with. I am the last generation, who has known many of the employees and all of my family right back from Ingeborg and Carl Hansen, who worked for the development of the company. ”

Carl Hansen & Søn presented the best annual accounts in the company’s 109-year history in June

 


Interview with Carsten Lehn

The press material also includes the fascinating story about Tropicdane Carsten Lehn’s adventurous life..

He is the single child and the fifth generation of a family of leather tanners and it was only natural that he should be educated in Germany as a Chemistry Engineer with a focus on Tanning.

When he came home to Denmark, he entered business with his father and he later took over. At that time, he had two options: Either closing the tannery or making a new factory from scratch. His father said “it’s your decision, it’s you who will borrow the money and take the risk.”

Carsten did not believe it would be profitable to make leather in Denmark because the Danish tanneries had been overtaken by tanneries from other countries.

Instead Carsten entered the music business in the early 1980s. Carsten began making professional music, as a composer, producer and singer, and had a record studio. During this time he wrote music to Laban, Søren and Kirsten, Keld and Hilda, and other famous house hold names in the Danish entertainment industry. Carsten says he had a good life.

Things took an unexpected turn when in 1984, Carsten heard about a public “Inventor Office” in Copenhagen, which had given money to inventing a comb with a beer bottlle opener in one end. He wrote an angry letter to the office that it was horrible that they had been using tax revenue on such an invention, instead of helping industries struggling for survival, for example, tanneries and their pollution problems.

If they had spent money researching on how to resolve the pollution problems related to tanning, many factories would still be operating, he claimed.

The Inventor office called Carsten in for an interview and he was awarded DKK 30,000 to research this in more depth. Even though he was happy with his music career, Carsten started working with the Jysk Technological Institute and after two years Carsten had patented an invention that could clean tanning waste 100 pct. The residual product was so clean that you came out with a high protein-containing product that you could eat. Carsten would sell the patent because he was pleased with his music career, but everyone said he should not do it and that he should produce dog food from it.

The factory, which Carsten had owned with his father in Bogense on Funen was still standing, so Carsten felt he should produce something there. He established the Wishbone company in Bogense, which produced protein-rich dog food / dog nuts of garlic waste. Carsten and his partner drove around to all the tanneries and took over their waste, and then they transported it to Bogense and cleaned it up and baked the product. Eventually it was packaged and served as a dog treat. It was sold to people who trained their dogs, they could bring it in their pocket. It was a brilliant business.

At that time, Carsten still produced music, so the Danish newspaper Ekstra Bladet wrote a headline saying “Sangeren der gik i hundene”.

In 1987 there were, however, only two tanneries left in Denmark, and they did not produce enough raw material for the production of Wishbone dog food. Carsten wanted to shut down the factory, but he felt under pressure as he had been awarded Entrepreneur of the Year. Then a customer from America told Carsten that he knew a man in Thailand, who had five tanneries. He suggested Carsten should make a joint venture with him.

Carsten flew out to Thailand and was offered to build a large factory that would produce dog treats. Carsten would get 30% of the company, 30% was another Danish company that would market it worldwide, and then the Thai partner would have the remaining percentages. Carsten then moved to Thailand with his then wife and her two little boys of 5 and 8 years. Meanwhile, others would be running his record company and music studio back home.

Carsten started from scratch on a rice field with the plan of building a factory of 15,000 m2. There was enough money to build, but he could not speak a word Thai. When the factory was completed and it started to produce, it went well, it had 150 employees and produced up to stock. The plan was that Carsten should go home to Denmark on 1 August, when his contract expired, and then leave the factory to someone else to run.

But 14 days before departure, there was a picture of Carsten’s business partner at the front cover of Bangkok Post, who had been shot 17 times at the golf course in the morning. Carsten’s first thought was that he still wanted to go home. Later, he found out that the reason he had been killed was his involvement in the sugar industry where he had tried to monopolize the industry. The partners’ sons were only 19 and 21 years old and could not run the company, so Carsten was asked to stay 1 year until they found a solution.

Carsten spoke with his Danish partners, who thought he should continue production and ship dog food to the United States. At that time they had 250 tons of dog nuts in stock. There had been commercials and they were ready to ship to the United States.

However, while deliberating what he should do, he had started talking to some purchasers from the retail company Dansk Supermarked. At that time, they bought a lot in Thailand, but they needed a procurement office and proper quality control. So during this period, Carsten started helping the Dansk Supermarked to do quality control. This was both textiles, handicrafts etc.

About 3-4 months later, the Danish partner (in the dog biscuit company) went bankrupt, his Thai partner had been killed and the factory had a huge stock of dog food. The music studio back home in Denmark did not go too well either. Carsten was in a bit of trouble.

One day, Carsten was on a quality inspection trip where Bilka had bought some cheap, brown Thai jars with dragons and ribbed edges. He asked the supplier how long it took to make the dragons on the jars and what if we could sell them without the dragons? Here Carsten found that the pots could be manufactured much cheaper if they simplified the process and sold them in a minimalist white.

Carsten suggested this to the purchase contact at Dansk Supermarked in Denmark and at the same time he saw a new business opportunity.

He established a company named Tropicdane and went out to all the suppliers of Dansk Supermarked and designed products for them – clothes, jars, pottery, everything possible. It was a win-win and Carsten made a good profit. So the family decided to sell the house in Denmark and move permanently to Thailand.

Tropicdane started as a trading company. Still living in Thailand, Carsten purchased ceramics from Vietnam, such as elephants, and sold them to Denmark. The elephants were sold in Føtex and were a success. Carsten bought the elephants from a Vietnamese market and transported them by truck to Thailand, where he put them in cardboard boxes and sold them to Denmark. However, one truck from Vietnam had an accident, all the elephants were smashed. They had already been sold to Føtex, so Carsten had to go to Vietnam in a hurry to find some elephants, he could deliver instead.

At that time – in 1989 – there were still soldiers patrolling the streets in Vietnam, and in the evening is was dark, nobody dared go out and people were in general very poor. Carsten was taken around by an official guide who kept a keen eye on who he was talking to. But when Carsten sat in the hotel one evening, it knocked on the door, and a Vietnamese man came in, who had fought for the Americans during the war. He spoke English and said he had heard that Carsten had visited the ceramics factory that day. His family had owned the factory, which produced ceramics before the war / communism.

The man worked as a doorman, he could not get other jobs. He told Carsten, that the factory did not produce elephants anymore, but bought them from subcontractors. The man told Carsten that he could help him buy the ceramic elephants directly from the subcontractors, which was a much cheaper business model than Carsten had so far.

From here, Carsten started buying the ceramic elephants directly from subcontractors much cheaper. He also realized how big an industry ceramics was in Vietnam. That’s why Carsten started thinking about opening an office. When he started the office, he employee two girls and the man who had been a soldier for the Americans during the war, and who could speak English. The office grew, they had a warehouse, and suddenly there were a 6-8 staff in the office and eight employees in the warehouse, and from here many ships were shipped to the west. At that time there were no bank transfers, so all payments were in cash that was delivered in rice bags that should be counted every time.

In 1992, Carsten was divorced. Carsten now moved to Vietnam, where he first lived on a mattress in the corner of the office. From here, they primarily resold the handicraft and ceramics from subcontractors. This was the primary product range from 1992 to 2000, after which they entered the furniture / garden furniture industry. There were the over 150 staff who only made outsourcing and quality control.

When they started with the garden furniture industry, they went to the simple garden furniture factories and had a Danish technician and quality controller who built a Danish team and introduced their own people who controlled the factory but they bought the goods that came out of it because they wanted to Do not help finance and get cheated. They did not even have a factory yet.

In 2000, they traded for 8 million dollars.

At that time design in garden furniture was not recognized, it was primarily folding chairs and garden tables that were popular. Carsten would like to do something better and get in touch with Danish designer Jacob Berg, who had previously learned from Hans J. Wegner, and put some of his furniture in production.

One day, Carsten was at a fair in Singapore selling the products from his ceramics factory and next to him was the furniture manufacturer that he had helped to raise up – but he was selling the same furniture 20% cheaper than he sold to Carsten. When he returned to Vietnam he had made up his mind that they should have their own factory. In 2001, Carsten began to build the DAFI factory, which would produce garden furniture, and it was completed in 2002.

The factory was named DAFI because he had a Finnish partner and as he was Danish it was an abbreviation of their nationalities. But after a year and a half, Carsten bought the Finnish partner out.

During the financial crisis in 2007-2008 the plastic material Polyrattan became popular. It is a plastic material that fades and is not durable. But people had became tired of wooden furniture, which was to be sanded and have oil. The polyrattan was easy to maintain. Still, Carsten did not want to use this. He liked organic and natural products. So sales dropped. Carsten tried to move into the contract market instead of the retail and found two major customers in the industry that delivered to restaurants – one in Germany and one in the United States. Carsten learned a lot about quality standards, how the wood was to be dried, guarantees etc., so by learning about this, the quality of the furniture improved.

Five years ago, Carsten felt he had a good concept, it had to be a mix of both indoor and outdoor furniture. It should be a quality that could endure to be outdoors, but nice enough for it to be indoors.

Four years ago, Carsten found a special rope that is being produced in Vietnam. Vietnam has a huge fishing industry, and a small Korean joint venture company made some sort of flagline for the fishing industry. Carsten began to find ways of using it instead of the polyrattan, but it became too expensive and heavy and took too long. But the rope was so strong that you did not need so much material, the rope reminds of sailing and cotton straps, naturally. If you made the product easier, you could get prices that were more interesting for the industry.

At the same time, Carsten was building a large showroom of 1000 m2, where there must be a lot of design with this rope. At this point, the market was saturated with polyrattan and price war occurred. When this new rope was presented, Carsten was lucky enough to get good customers – for example, John Lewis UK had great success with the goods.

Two years ago, Carsten spoke with John Lewis’ Vice Director and showed him the set of indoors / outdoors furniture. John Lewis sold five times their forecast the following year. This proved that the idea is right and functioning.

As Carten eventually reached the decision that he needed to sell the company instead of make a generation change, he was looking for the right buyer. He had been offered good deals by Chinese people who would buy the factory, but he felt they would destroy the whole concept, which Carsten is passionate about, namely living with nature as is alos the name of the brand. Carl Hansen & Søn stands for the same – passion for the product, classic furniture, family-owned enterprise. So selling to Carl Hansen & Son was a different story, the most important thing that he had a good relationship with the buyer.

Tropicdane is like his child. Carsten is convinced that Tropicdane will continue to grow and develop with the same spirit and respect for the concept that it has been built upon. And it is important for Carsten that he can continue to be a designer.

 

 

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