World Stone Industry Data

December 1, 2004
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The international stone industry is a sector enjoying growth all over the world -- offering new opportunities for development, but also updating on its well-established markets. This is the “snapshot” of the international stone field that was presented at Marmomacc 2004 in Verona, Italy.

A report on the world stone industry was presented in Verona by Carlo Montani, who stated that the industry has expanded rapidly since the early 1990s. Production has grown by 7.3% per year, and trade has increased by 8.7%, according to Montani. Looking at the recent past, totals in 2003 grew 11.2% in terms of production and 16.5% in terms of trade over the previous year. Production has settled at more than 150 million tons, gross of quarry offcuts and processing waste, while consumption came to about 8.8 billion square feet (820 million square meters), generating overall turnover of $40 billion.

The driving force in the sector was international trade, at just under 29.6 million tons and equal to about 4.8 billion square feet (450 million equivalent square meters). The majority of world consumption comes from material that is quarried in different countries than those where it is eventually installed. The leading producers -- China, India, Italy, Spain and Portugal -- account for 53% of world quarrying production.

Prices on the main markets were down on average, confirming a long-term trend caused by rapid technological development and trade modifications that benefit the most popular materials.

With regard to machinery, 2003 saw world production of about 210,000 tons of equipment, about two-thirds of which traded, while international business was characterized -- as in the past -- by a significant preference for sea freight.

The European Union has 65% of world exports and enjoys leadership in all trade categories: saw mills and cutting centers, honing and polishing and finishing. Overall, European Union exports grew from about 67,000 to 87,000 tons -- an increase of almost 30%. Italy has consolidated its position by expanding its share of the market from 73.1% to 78.3%.

The European Union also saw increases on the importing side, with totals increasing from 22,768 to 26,518 tons, a rise of 16.5%. Spain took the lion's share of these imports, followed by France and Germany.

While exports managed to better the records set in 1994 in terms of both quantity (4.2%) and value (6.9%), there is a downside that can be found, with a significant drop in average unitary product prices (especially in Italy). Italian technology represents 48% of the world exports of stoneworking machinery, with more than 68,000 tons of equipment shipped -- matching the record figures of 1994. But this was achieved only by sacrificing several percentage points for the average unitary product price, which now stands at less than $900 U.S. (700 euro) per ton.

Competing products -- especially ceramics and stoneware -- are seven times more available than stone materials, although stone in any case still has ample margins for growth.

Differential analysis by countries indicates that growth in the stone world is governed by very variable rates: the best progress was achieved by China, India and Turkey in production, and by North America in consumption, while Europe marked time with new signs of recession in Italy, Greece and Spain. Prices for finished products are characterized by an average price range for export of $12 U.S. (14.4 euro) per square meter in China to $52 U.S. (40 euro) in Italy.

Prospects

Forecasts for the future, in terms of both production and trade, are favorable. By 2025, the volume of stone materials quarried worldwide should grow to more than 450 million tons gross, equal to about 52.6 billion square feet (4.9 billion equivalent square meters), while international trade quantities should in turn reach 31.86 billion square feet (2.96 billion square meters). The total of stone traded internationally is estimated to represent 60% of overall production in 2025, compared to 54.3% today.

The growth trend in the field will therefore continue, but there will be problems of a general character concerning infrastructure, plant and waste disposal that must be resolved on a national and supra-national scale.

An increasingly important role will be played by countries such as China, India, Turkey and Brazil, whose production status will increasingly be flanked by solid distribution capacity. Simultaneously, there will still be strong purchasing trends among major international consumers, first and foremost the U.S., South Korea and Japan.

2004 data from Italy

In the first months of this year, the Italian sector has held up fairly well in terms of data as well as the outlook of Italian producers (see “Surveying the Italian stone industry”). Exports grew by almost three percentage points in value and by almost 10% in quantity compared with the same period last year. Good performances were recorded for marble blocks and slabs, granulates and powders and processed granite. On the other hand, the negative trend for granite blocks and slabs continued (down by more than 8%). The best progress for exports was made within the European Union (with quantity and value increasing more than 15%), followed by the Middle East (gaining about 10% in quantity and 6% in value).

In this general situation, the Veneto district -- with about 800 companies, 8,500 employees and overall turnover of $1.8 billion U.S. (1.5 billion euro) -- was the most dynamic and active, improving exports by more than 5%. Verona, in particular, in the first half-year achieved exports worth $385.2 million U.S. (321 million Euro) compared with $372 million U.S. (310 million Euro) in 2003 (+ 3.5%). In recent years, the Veneto region has emphasized production quality, and it is improving synergy between the main actors in the district in economic, training and promotional fields. Companies such as VeronaFiere are actively taking operators all over the world in the search for new business opportunities; the Video Stone Library in Volargne is being called upon to illustrate the main characteristics of various materials, the Testing Laboratory is certifying the quality of stone artifacts; and the Professional Training Centre in Sant'Ambrogio is offering education and training activity.

Cesare Bellamoli, national president of Assomarmi, emphasizes the importance of the sector for Italy's national economy and the lasting aspect of the recovery. “This took place alongside improvements in the engineering field,” he said. “It is supported by investments and thus seems not be short-lived. The success of the [international] stone industry must be especially attributed to a handful of countries -- particularly production in China, India, Turkey and Brazil -- and, as regards consumption, also to the U.S. Meanwhile, countries in Western Europe have consolidated their positions, except for Italy, where a marginal downturn in the stone industry was recorded, offset by simultaneous growth in technology.

“China, in keeping with results in previous years, was the star performer, with an increase in exports of 1 million tons, with consequent impact on production,” Bellamoli continued. “This arises from extraordinary competitiveness in terms of costs and price, in particular with regard to finished articles, where the average quote is one-third less than for Italian products. However, there were other cases, such as Turkey, where major growth was achieved in production and distribution despite significant price increases. This demonstrates the solidity of international demand and a positive response by the market to quality policies, promoted everywhere through growth in investment.”

With regard to trade, Bellamoli cited a re-found interest in materials such as marble and travertine, which have had to match up with finished granite products from China, Brazil and India. “All materials, in one way or another, were involved in sector growth, including slate, which is still very strong in Spain despite significant competition by Brazilian materials from Minas Gerais,” he said.

“International trade has achieved volumes equal to 54% of consumption,” Bellamoli continued. “This emphasizes its vital importance for the future of the sector, now characterized by unstoppable globalization. In terms of both materials and countries, the major advantages of the positive market situation are achieved by those who join this process more rapidly and more functionally. In this context, the recession in the stone industry in Italy -- the only large processing country going against current trends -- must not be interpreted as technical or professional shortcomings. On the contrary, Italy has always led the world in this regard. Rather, it has been caused by a social, political and financial situation of uncertainty as well as environmental and bureaucratic bottlenecks. The fact that other European countries have made progress in general and sector terms -- despite competition from China and other developing economies -- confirms that there is still room for everyone.

“The year 2003 was very positive,” he concluded, “if only based on the volume requested by the market and the capacity of the sector to meet unprecedented increases in demand. Our natural product has emerged successfully from yet another comparison with alternative materials, and the basis has been laid for further development -- thanks to a quality policy sustained by investment as well as the renewed trend towards shrewd and functional democratization of employment.”

Surveying the Italian stone industry

The first half of 2004 has left a deep mark on the Italian stone industry, increasingly dividing operators into two classes: those that are made stronger by problems and those that, still enmeshed in hard times, tend to view the future in an increasingly negative way.

This is the basic picture given by an economic trends survey of the first six months of the year conducted by Internazionale Marmi e Macchine Carrara (IMM). The organization interviewed 478 Italian companies in the natural stone industry -- representing approximately 9,000 operators -- including providers of technology and services.

Comparing the first six months of 2004 with the first six months of 2003, 46% of the Italian companies said they felt business was static; 22% reported that it is getting better; and 31% said that business is falling. In the Tuscan district, which includes the stoneworking region of Carrara, a total of 41% of companies regard the level of demand dropping, 17% increasing and another 41% static.

Demand from foreign countries is considered to be on the increase by over 28% of the survey participants and on the decrease by 38% of the companies, with 34% considering it to be static. As for raw materials, 32% of respondents said demand is slightly growing.

Confidence in the future is growing a bit, with 26% of the Italian stone-related companies interviewed seeing an upward trend, as opposed to just 11% in July of 2003. In Tuscany, 19% of the companies reported an upward swing, up from only 5% in July of 2003.

During the first six months of the year, Italy exported 2.314 million tons of raw and finished stone, with a value of over 849 million Euros (including 813 million Euros of marble, granite and travertine). This represents an increase of 10.99% in quantity and 3.04% in value over the first six months of 2003. In the most important entries (raw and finished marble and granite), the increase in exports has been substantial, as it grew by 5.6% in volume and 2.7% in value.

In the Tuscan district, exports reached over 464,000 tons of raw and finished marble and granite, worth 232.641 Euros, during the first half of 2004, a 6.3% increase by quantity and 5.9% by value over the same period in 2003.

“From these statistics, we can see the signs of a trend reversal that has been understood -- although in different ways -- by the interviewees, who are confident nationwide; with a more pessimist outlook in the Tuscan-Ligurian district,” explained IMM President Giancarlo Tonini.

The twice-annual IMM survey also showed some peculiar facts and news. A specific trend relates to the Apuan-Versilian (Carrara) district, where specific negative and positive feelings are increasing, and there are less people who feel business will remain static. The industry seems to clearly feel it is at a crossroads, and the gap between the companies that can improve and those that cannot reposition their operations is getting wider and wider.

This trend is not only true in the Apuan Versilian district, but also in Italy on a national scale, although not as clearly. Moreover, producers of raw materials are reporting some improvement in their business.

The role of the domestic market is still important for the Italian stone industry, but currently the Tuscan district has not reported much activity, even for producers of technology and services.

“In any case, we will have to wait until the end of the year to be certain whether the trend of the first six months, which sees a slight recovery in exports and therefore a growth in business confidence, will be steady in the quantities and values of the exported goods, a factor that is particularly important for the Tuscan companies that mainly work in quality exports,” concluded Paris Mazzanti, CEO of IMM.

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