Finding a niche in the architecture market

August 4, 2004
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When Southland Stone was established in 1986, it was one of the first companies to import Indian slate to the U.S. But over the last two decades, the company has changed gears, and it relies on its experience in the field to supply a broad range of stone for architectural work.

“I've been associated with stone since 1975,” said Ravi, owner of Southland Stone USA (SSU). “I worked with a company in India that started in terrazzo tile and did airports and such in the Middle East. I would go to Italy to buy materials for terrazzo, and I saw the industry evolving and figured that would be the future.” Johar went on to start a factory for green marble in India, and also operated quarries within India.

In 1984, Johar moved to the U.S., and actually planned to get out of the business. He was persuaded to stay in the stone trade by a company called Southland Stone AG, a Swiss firm owned by South African and Indian partners. They suggested that Johar start a stone importing operation, and he named the company Southland Stone USA. Ironically, the partners never invested in the operation, but the name remained. In 1986, he started operations by importing Indian slate.

Work began with an emphasis on large residential and commercial projects. “I had the good fortune of working with some of the most famous architects and on high-profile jobs,” Johar said, adding that one of the first major projects was a medical office building in Beverly Hills, CA, designed by the Jerde Partnership, with whom the company has maintained a long-standing relationship.

Southland Stone went on to sell stone to distributors such as Walker Zanger and Arizona Tile in the late 80s, and it began a joint venture with MS International in 1992. In this venture, the companies developed a distribution network for slate and granite tiles across the U.S. Sales of slate tiles grew rapidly, and the company also moved into distribution of granite slabs.

In 1994, the partnership with MS International was dissolved, and Southland Stone began developing slate distribution programs with retailers such as Home Depot and Lowes. The company also began initiating many tile dealers into stone, working with companies such as Del Piso and Dal Tile.

But over time, the distribution structure for Indian stone changed in the U.S. “Dal Tile wasn't doing any stone, and within six months, they were buying $250,000 to $300,000 a month with us, and so they created their own buyer for stone,” Johar said. “We were educating them on a day-to-day business. We helped them set up their own stone program, but within 18 months, they began importing directly in 1995.”

Johar added that with the advent of Information Technology in the late 1990s, the role of importers was limited to their local markets. “SSU evolved from an importer/distributor to a stone supplier,” he said. “ Anybody who does $3 to $4 million of business is an importer. These companies are able to buy containers on their own. Everyone became an importer, and so there was no real role for someone to import

and distribute.”

With the changes in distribution, SSU's shipment of orders to markets such as Denver, Utah and Oregon -- which once comprised 40 to 50% of the company's business -- virtually ceased. Now 30 to 35% of the company's business is architectural projects and 65% comes from local buyers and contractors around the immediate Los Angeles area. “SSU's strength has been large commercial and residential projects, across the U.S. and in other parts of the world,” Johar said. “We have been involved in projects in Japan, China, Taiwan, Thailand, Poland, Turkey, Holland and Canada.”

But while architectural work has been a specialty for the company, local sales are a critical element of the business. “You can wait two to five years before actually supplying the stone [for an architectural project,] so you have to maintain other business to sustain yourself,” Johar said, adding that he has maintained personal relationships with a broad range of architects over the years.

Johar also said that the bid process for architectural work can be difficult, particularly when the general contractors ultimately make the final decision on who supplies a specified stone. “The bid process allows 'apples and oranges,' “ he said. “If you give a price, they will use it against you, and some installers and fabricators do not respect suppliers for their efforts to specify products.”

To offset these obstacles, Johar said SSU strives to be a “full service” stone supplier, including design services for small projects, sourcing ability and project management capability.

The company offers 2,000 items from 28 countries, and Indian stone now only represents 25% of overall sales. In addition to Indian stone, 25 to 30% of sales are stone from Brazil, and the rest is a mix, including material from Spain, Israel, Portugal, China and the Philippines. To ensure quality, SSU has a full-time person working in Brazil for sourcing and quality control, and it also has a Quality Control office with two inspectors in India. Other sourcing agents are on contract for Spanish and Turkish materials.

Overall, the company has 36 employees at its location in North Hollywood, CA, and it stocks slabs, tiles and some specialty products. It also has a modern showroom, where customers can view the variety of products available.

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