Chinese drywall importer: 'It was need, not greed'

Sam Porter wants a do-over.

At the height of the housing boom three years ago, Porter's drywall supply and installation firms had never been busier.

Demand was so strong across the country that Porter had trouble getting new wallboard from his usual manufacturers. Trying to keep up with customer orders, he made a decision that has brought his Venture Supply Inc. to the brink of collapse.

He bought and imported about 150,000 sheets of drywall from a Chinese manufacturer in 2006. His firm installed the drywall in homes and condominium projects from Williamsburg to Virginia Beach.

Recently Venture Supply was named in three lawsuits over the use of Chinese-made drywall, which home-owners claim emits a corrosive gas that damages household electrical systems and may cause respiratory problems.

A little over a week ago, Porter decided to destroy the Chinese drywall remaining in his warehouse. While he's still not convinced the drywall is a problem, two local municipalities have banned its use, making the roughly 50,000 sheets left at Venture Supply essentially worthless. Federal agencies continue to investigate the drywall and have yet to confirm allegations about it.

"This whole thing has become a disaster," Porter said. "I wish I had never brought it in."

Porter, 44, got into the drywall business when he was just 14, sanding and hanging sheets of wallboard himself while still attending Green Run High School in Virginia Beach.

Not long after graduating, he started his own installation business, Porter-Blaine Corp., out of a mini-storage unit where he stored small supplies of drywall and installation tools.

Ten years later in 1994, he purchased an 8,000-square-foot warehouse in Virginia Beach and started Venture Supply. He slowly expanded the company, taking on more clients while adding delivery trucks and workers.

"I learned in this business reputation was everything," Porter said. "If I did a good job, those people would tell other people. And that's how the business started to grow."

Porter poured his profits back into the business. He made his first major expansion four years later when he purchased a 40,000-square-foot warehouse and moved his company to Norfolk. And in 2002 he moved it again, to a $3 million, 80,000-square-foot warehouse on Azalea Garden Road.

In the years that followed, Venture Supply continued to expand. Its fleet of delivery trucks grew to 20, nearly double the number he had on the road just a few years earlier. His payroll also grew to more than 200 employees, and annual sales eclipsed $35 million.

"I started in this industry and worked hard," Porter said. "That's the American dream."

By the early months of 2005, with the housing boom in full swing, home builders were buying Porter's wallboard faster than he could keep it stocked. U.S. wallboard manufacturers couldn't keep pace with demand.

"Everybody was pretty much oversold," Porter said. "We were turning people away for a period of time there because we didn't have the product. Turning down business is rough, but you can't sell something you don't have."

As work orders piled up, Porter grasped for a way to get more wallboard. A customer had mentioned that builders in other parts of the country were importing building materials from overseas.

The import business was foreign to Porter.

"It wasn't like I could just pick up the phone and order some board from China," he said.

Porter said he met with Phillip W. Perry, a Virginia Beach businessman who ran a small brokerage of international goods. Perry offered to travel abroad for Venture to find drywall that could be imported to Hampton Roads.

During the spring and summer, Perry traveled to Europe and the Middle East to meet with drywall makers, Porter said. Perry eventually landed in China and found a company ready and willing to take an order.

Shandong Taihe Dongxin Co. Ltd., a firm that appears to be owned by the Chinese government, could custom-make Venture's drywall and have it ready in a matter of weeks.

Perry brokered a $1.8 million deal for the manufacturer to produce 100,000 sheets of drywall, enough to build more than 300 homes and satisfy Porter's clients for months. By September the board was ready to be shipped.

Back in the United States, supplies had gotten even tighter after hurricanes ravaged the Gulf Coast and much of the nation's supply of drywall was diverted to hard-hit areas to help rebuilding efforts.

As a result, U.S. wallboard manufacturers cut back on shipments to small suppliers such as Porter, who was allocated 60 truckloads a month, down from 150 truckloads.

Problem s arranging a ship delayed the arrival of Porter's Chinese order in Virginia until March 2006.

Porter quickly began to distribute the board and placed a second order for 50,000 sheets, in part to replace some that were broken during the passage. That shipment arrived later that summer.

On Tuesday, trucks rumbled nearby as Porter surveyed his firm's warehouse, much of it left empty from the thousands of sheets of Chinese-made drywall already taken to the John C. Holland Enterprises landfill in Suffolk.

The housing bust had already taken a bite out of his business. Now he said his working days are filled with the fallout from the suspect drywall.

His desk is cluttered with letters and paperwork from lawyers, politicians and customers. Just outside his office, boxes of documents are stacked several feet high, waiting to be sent to federal agencies.

The costs of disposing of the drywall and legal expenses are starting to add up. Porter estimates he's losing $10,000 a day.

"I've been called everything from a thief to a home-grown terrorist," Porter said. "What did I do wrong?"

Venture Supply joins a growing group of developers and other companies that have been sued in connection with use of the Chinese-made drywall. In Florida, home-owners have sued giant home builder Lennar Corp.

Among the allegations levied against Venture in lawsuits is that it was negligent for selling the drywall and not warning home-owners and customers that it was defective.

"Virginia law is quite clear that a company that sells the product as his own steps into the shoes of the manufacturer and has the identical liability to the consumer who was injured by the product," said Richard Serpe, a Norfolk-based attorney representing local home-owners. "In this case, Venture Supply branded their name on the product and held it out to the public as a safe and decent building material to be used for home construction."

Porter said he had no reason to believe the drywall wasn't safe. The company has denied all the allegations in a court filing.

The home-owners represented by Serpe also recently named Phillip W. Perry's firm, Tobin Trading Inc., in the suit seeking class action status in Norfolk's U.S. District Court.

When reached Wednesday and asked for comment on his relationship with Venture Supply and involvement in the deal to import the drywall, Perry said he had no comment and hung up the telephone.

Like everyone, Porter is waiting for results to come back from tests on the drywall being conducted by the Consumer Product Safety Commission and Environmental Protection Agency.

"Honestly, I feel like I'm a victim here, too," he said. "I didn't want to import this drywall. It cost me more than if I had bought it from American companies."

In his warehouse, Porter broke off a section of some of the damaged board and held it to his nose.

"I've honestly never smelled anything," he said. "If there's a problem, though, it has to be fixed. If there's not a problem with the board, then I'll just take my lumps."

In the meantime, Porter is hoping to make a dent in his losses by leasing out the space in his warehouse left open by the Chinese-made drywall.

"I don't want to go bankrupt," he said. "I just want to provide a service for the community. I have 75 employees. If business doesn't pick up, they're going to be unemployed."

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com