(July 2008) Two juxtaposed tendencies are determining the stone industry worldwide: on the one hand globalisation is making cross-continental-trade exchange more and more important. At the same time home markets are gaining an increasingly important role. Moreover Asia is metamorphosing to a production and consumption giant; Eastern Europe, too, is becoming an ever-more interesting consumer market. This is a summary of the most important insights included in the „Stone Sector 2007“ analysis, compiled by the IMM Internazionale Marmi e Macchine.
Statistics of the year 2007 were marked by the crisis in the U.S.A.’s building sector and by the low value of the U.S. dollar almost wiping out the profit of companies serving the U.S. market. The study’s author, Silvana Napoli, put it in a few simple words: „In all of 2007 only one shopping mall was built in the whole of the U.S.A.“
The main suppliers of granite end-products like counter-tops felt the pinch most: in 2007 Brazil had to cut back its shipments to the US by 14.5 %, India by 8.7 %, China by 6.7 % compared to the year before. Interestingly, Italy saw only a minor recession with negative growth around 1 %.
Marble of the same category saw profits diminish considerably for the main producer, Turkey. Mexico and to a lesser extent Egypt were able to record net growth. However the net production for these two countries cannot be compared to that of Turkey.
USA: competition of the newcomers
The study shows that the competition is carried out mainly among the global newcomers on the stone floor, so to speak. All recorded serious recession with the exception of the former world-market-leader Italy which was able to hold its position. The question is, why is this so, considering the fact that Italy is presenting there the market share of expensive stones.
The answer, the study concludes, is very interesting, or more precisely, the question’s ensuing: could it be that in times of grave consumer uncertainty resulting from globalisation, markets turn to traditional products because they lend a feeling of security and dependability? Or put a different way: could it be that old Europe’s stone industry once so shaken by globalisation is now drawing profit from it?
Slowness instead of longevity
As far as marketing is concerned this would mean that the stone industry should emphasise the longevity of its products. The idea came up during the ICDS-Congress, where the study was presented, but caused protest: It seems questionable – as was put forth – that consumers value products that will outlive them. After all they would bind not only the builder, but indeed the following generation.
In the periferal discussions during the course of the congress the idea was born to bring the aspect of slowness to the foreground of marketing strategies instead – go stone, go slow – is the slogan implying that building with stone keeps stress at bay.
Back to the study. In future the U.S.A. will no doubt remain the most important market, especially in respect of the price level and margin of profit according to one thesis. In terms of volume China is the greatest consumer at present. This is due in part to the Olympic games and the world fair in Shanghai. Nevertheless growth is expected to continue there for some years to come, though no prediction can be made as to the rate. The same is true for India, which is just behind China in production and consumption.
The study points to one aspect in particular. It boils down to defining China as a superpower even if the study does not use this nomenclature: China has reached such a powerful position as a producer of stone that competition hardly has a chance, e.g. in Japan who imports 97,6% of its granite from China. Similar figures are true for South Korea.
Europe will continue to play an important role as a consumer of sophisticated products. This is particularly true for Germany. Italy and Spain have succeeded in manoevering themselves into secure positions as newly emerged producing countries. This was because they set themselves apart from their competitors specializing in quality products to gain ground.
One of the main points of the study focussed on statistics for Italy and shed particular light on its export of heavy machinery. This is a clear asset: Newcomers such as Algeria, Morocco, Poland and Vietnam would be willing to invest in Italian technology in order to gain important new market segments.
Despite international competition, Italy’s chances on the international market for heavy machinery look very promising: Research and Innovation in constant dialogue with local stone industry would help to constantly develop new and better products to stay one step ahead of competitors like China.
In total Italy’s stone exports from 2006 to 2007 nearly remained the same in value (+0.8 %) with a little increase in volume (+2.6 %). Yet there was a strong shift in the customer-regions: While there was a increase in shipment to Latinamerica (value: + 30.6 %, volume: +7.2 %), to the Far East (value +11.3 %, volume +15.1 %) and, based on a much lower level, to Africa (value: +36 %, volume: +34.9 %), stone-exportation to North America saw an overall cutback of similar size (value: -11%, volume: -14.9 %).
The study „Stone Sector 2007“ costs 10 € and can be ordered at IMM Carrara.