Stems conduct water and nutrients throughout columns called vascular bundles. Xylem (pronounced zy-lem) is a type of vascular bundle that transports water up the stem from the ground. Phloem (pronounced "flo-em") transports the sugars produced in leaves down the stem.These wonderful vascular bundles are everywhere inside the stem, and are even located in leaves, where they are called veins. Just as in humans, the veins and vascularbundles act as a transport system for nutrients and fluids. Many commercially important fibres come from stems - like linen, which comes from flax . But clearly, the most important product to come from the stem wood.