World economic report on stone is presented

December 1, 2006
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Among the many global initiatives at the Marmomacc exhibition in Verona, Italy, a perspective of the international stone industry was presented on October 5. The multi-part report included information from “Assomarmomacchine,” “Stone 2006 - World Economic Repertory” and Istat (the National Statistics Institute). This presentation, which included statistical data through the 2005 calendar year, offered a broad perspective of the industry’s growth in both the long and short term.

According to the report, the international stone industry continues to grow at rates substantially better than those recorded for the world economy in general. From the early 1990s, overall production has increased by 7.2% per year, and overall trade has increased by 8.9%. Moreover, when comparing 2005’s figures to the previous year, these variations were respectively 4.9% and 9.8% (the latter figure being higher than average).

In more detail, world production in 2005 has been estimated at about 175 million tons, gross of quarry and processing waste, for consumption equal to about 10 billion square feet (930 million square meters) and turnover of around $48 billion U.S. “Per capita” utilization of stone came to 165 square feet (15.3 square meters) per 100 people, compared to totals of 157 square feet (14.6 square meters) in 2004 and 145 square feet (13.5 square meters) in 2003.

A decisive role for the development of the stone industry in terms of globalization came through trade, totaling more than 36 million tons. Factoring unfinished and finished materials, this comes to more than 5.8 billion equivalent square feet (540 million equivalent square meters), suggesting that the absolute majority of world consumption involves materials that are quarried - and often processed - in countries other than those where they are used. The main producers - China, India, Italy, Spain, Iran, Turkey and Brazil - alone accounted for 67.8% of world quarry output (up one point over 2004), confirming the existence of major concentrations that generally involve international stone distribution.

Prices in the main markets dropped on average, although several important exceptions were noted, including China, where quotations for finished products recorded a limited upturn, settling at around $16.20 dollars/square meter - roughly one third the average Italian price. This follows many years of decreasing prices from China prior to 2004. This is part of a long-term trend following rapid technical development and modifications in the “product mix” in favor of more “up-to-date” materials - and has made a vital contribution towards offering natural stone new application segments.

The report also focused on allied industries, in particular the technology sector. With regard to machinery, 2005 saw world production in the order of 230,000 tons, two-thirds of which was traded, and the confirmation of traditional Italian “leadership” in the field despite the loss of a few points in market share, which was reduced to 42%. Annual turnover in the section was more than $635.5 million (500 million Euro), in turn joined by $101.6 million (80 million Euro) for abrasives and $63.5 million (50 million Euro) for diamond tools.

International trade, as in the past, was mainly characterized by sea freight, but also saw some resumption in the use of rail transport on short- and medium-range routes.

With regard to competing products, headed by ceramics and stoneware, overall availability of these manmade products in terms of quantity - 70 billion square feet or 6.5 billion square meters - was about seven times higher than the quantity of natural stone materials. Nevertheless, this comparison suggests excellent potential for further growth by marble and natural stone. It must be added that, over the last four years, the growth rate for stone has been higher than for ceramic products and has significantly turned around a previous negative trend.

International fluctuations

Differential analysis by countries shows that development in the international stone industry is governed by very variable processes. In this regard, while the best growth was achieved by China, Brazil, India and Turkey in terms of production, and by North America in terms of consumption, the market situation in Europe remained substantially stationary, with stable downward trends in Italy, Greece, Norway and elsewhere. Greece is emblematic, since for the first time in its history, stone imports exceeded exports. South Africa also showed a stable downward turn.

Prices for finished products remained very different from one country to another; average export prices per square meter included $52.12 (41 Euro) in Italy; $40.68 (32 Euro) in Spain; and $26.50 (20.85 Euro) in Turkey, down to the absolute minimum price of $16.20 (12.75 Euro) offered by China.

In relation to imports, on the other hand, the highest values by product unit were achieved in the American market, which imported stone at an average price of $46.80 (36.80 Euro) per square meter.

In terms of machinery, Italian stone processing machinery reached a maximum value versus quantity, although this rate was still lower than prices offered by European competition, according to the report, thereby confirming traditional competitiveness of the Italian machinery sector.

Lastly, forecasts for production and trade development prospects were also analyzed. In both cases, forecasts are favorable, to the point that by 2025 the volume of decorative stone materials quarried worldwide should grow to more than 435 million gross tons, with applications equal to over 51 billion equivalent square feet (4.75 billion square meters), while international trade in turn should come to about 32 billion square feet (3 billion meters). These may seem to be “impossible” figures, yet they are still lower than those achieved by ceramic products in 2005.

It is probable that growth trends in the field will continue at similar rates, so much so that generalized negative impacts are unlikely; nevertheless, there remain significant problems over infrastructures, plant and equipment and handling of waste materials, which must be tackled at all levels on a national and supra-national scale, bearing in mind the fundamental role of investments and the need to encourage them at company level through appropriate incentives. In this context, another and no less important challenge concerns reducing costs and overheads.

The stone industry is distinguished by a very high social content and can create jobs through relatively low financial investments - so much so that this sector has been acknowledged for several decades as capable of setting expansion processes in motion where other fields are structurally inappropriate. For this reason, the industry deserves closer and better-informed attention. This is true in emerging countries, where it ensures an important opportunity for “added value,” as well as in “mature” countries, where the sector increasingly offers significant scope in economic and cultural fields.

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