EMERGING EXPORT MARKETS
Article Date: 01.10.2017
Technological advancements during the last 10 years in air travel and communication have considerably reduced travel and communication time between countries. It is now possible to reach anywhere around the globe within 24 hours and to have access to information on quarry owners, processors, importers and exporters across the world on internet within no time. About 20 international stone fairs are organized annually in countries of China, Italy, Turkey, India, Brazil, UK, Germany, Spain, USA, Poland and Australia. Some construction fairs are held in Kenya, Tanzania etc. They attract buyers and visitors so that the products can be seen, specifications examined and discussions held with exporters.
The most important factor is the landed price of polished slabs & tiles and other products to the consumer. This ultimate price is the combination of FOB price, ocean freight, import duty, clearing and handling charges, importer's profit, distributor's profit and retailer's margin. There are bilateral trade agreements between certain countries - ASEAN countries, SAARC countries and European countries - which provide duty free imports among member countries.
Quality of the finished products - polish, accuracy in cutting and 100% inspection are pre-requisites for selling products abroad as also the price.
In 2016, global processed production of marble, granite, limestone, quartzite, sandstone and slate was 31,650,000 cubic metres. The following facts are for calendar year 2016:-
Global Quarrying Production Gross : 296.40 million tonnes
Global Raw Block Production : 145.00 million tonnes
Global Processing Production (net) : 85.6 million tonnes
Global net processed slabs (2 cm thick) : 1.585 million sq m
Global Stone Export (million US$) : 21.105
Exporting Countries (million US$) : China (6800.8); Italy (2134.6); Turkey (1800.8); India (1725.3); Brazil (1105.1); Spain (903.6); Portugal (366) and others (6269.8).
Global Stone Import (million US$) : 21.105
World Stone Trade (million tonnes): 53.545
Some stones like black galaxy, absolute black and yellow granite; green marble and Makrana white marble; rainbow and teak sandstone are exclusive from India. Their export prospects are high since these varieties are not available anywhere in the world. However, export of these varieties in the form of blocks specially to China has made China our biggest competitor in supply of finished products to other countries.
Ocean freight plays an important role as it depends on the freight from a port in India - Neva Shiva, Mumbai, Kandla, Chennai to a farthest point. It may be higher, but return freight to India may be lower and vice versa. Restrictions on import or export like higher import duty on raw-blocks, banned export of granite blocks from Saudi Arabia, restricted import of granite blocks in India ( allowed to only 100% EoU) and China's Zero import duty make the price of end product cheaper or higher.
Bank interest rates on capital investment and working capital range from 4% to 12% per annum. In some of the African countries these rates are 20 to 24%. Interest cost is substantial in export of stones and stone products.
It is difficult to make a realistic analysis of possible market as these are governed by specifications of the stone, its finish, price and above all the taste of the inhabitants. Climatic conditions also play an important role as marble slabs are used for flooring in hot countries while granite flooring is used in cold countries.
Important importing countries based on the analysis of 2016 data reveal that Export Market for India is:
North America - USA and Canada; South America - Bolivia and Mexico; Africa -Angola, Botswana, Kenya, Sudan and Tonga; Europe -United Kingdom & Germany ; Middle-East - UAE and Saudi Arabia; South East Asia - Indonesia, Hong Kong, Malaysia, Singapore, Thailand, Taiwan and Australia; Far East Asia -Japan & South Korea; Asia - China.
Indians must manufacture quality products, make product cost effective and avoid multiple distribution until product reaches the ultimate consumer. Setting up of warehouses in selected cities in different countries (USA, Canada, UK and Australia) initially and later on in other countries with large shipments would provide additional profit.
In subsequent issues of Stone Panorama, critical analysis of imports in different countries of the world would be made which would be useful for Indian quarry owners, processors and exporters. (To be continued....)