Granite

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Granite takes a new turn

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Market Survey
BY: G.P. GANDHI

GRANITE TAKES A NEW TURN!
colours and textures. The industry is producing a wide range of granite-based products, viz, granite tiles, slabs/blocks, monuments, tombstones, tabletops and several handicraft items like costume jewellery boxes, ashtrays, pen stands, paper weights, etc. Ever since the government of India announced granite as a thrust sector in 1990, the granite industry has taken a new turn. Today, granite has emerged as a major foreign exchange earner. India’s export of granite and granite-based products witnessed a phenomenal growth by reaching a level of Rs 3490.58 crore in 2005-06 as against Rs 2562.26 crore in 200405, thereby registering a growth of 36.23 per cent.

Global trade Ever since the government of India announced granite as a thrust sector in 1990, the granite industry has taken a new turn. Today, granite has emerged as a major foreign exchange earner.
World imports. Separate world trade data on granite and granite products is not available. However, its data in terms of value has been clubbed with other stones. As reported in various studies relating to granite, granite accounts for a lion’s share of stone-based products. Table I shows that in the year 2003, China emerged as the largest importing country of stones, thereby placing Italy in the second rank, which happened to be the largest importing country in 2002. In the year 2003, China registered a significant growth of 33.44 per cent over the previous year when its imports touched a figure of $583 million as against $436.9 million. The other countries registering a steep growth during the period included Belgium

G

ranite is known as ‘king of stones’ because of its inherent characteristics such as extra-fine mirror polish, scratchfree glossy surface and durability. Indian granite has become the most sought after and extensively used stone material in building constructions and massive structural works throughout the world and is well known in the international market

not only for its elegance and aesthetic quality but also for its durability. India accounts for 30 per cent of the world’s export of high-quality natural stones like granite, marble and sandstone. The country has emerged as one of the leading countries in production and export of granite and other stones. It has vast resources of granite with about 1120 varieties of different

Market Survey
(34.26 per cent), the UK (23.56 per cent), Spain (20.16 per cent), the Netherlands (16.86 per cent) and France (15.34 per cent). World exports. World exports of stone-based products in 2003 registered a growth of 13.15 per cent over the previous year when the same rose to $4618.2 million as against $4081.5 million in 2002. Germany continues to be the largest exporting country. In 2003, it showed a growth of 9.26 per cent over the previous year when its exports increased to $373 million as against $341.4 million. The countries showing a steep growth during the period included Brazil (131.23 per cent), Turkey (62.63 per cent), Austria (25.95 per cent) and Belgium (16.17 per cent). Further, India continues to retain its ranking as the third largest exporting country of stone-based products next to Spain and Germany. During the period, it witnessed a marginal growth of 4.63 per cent when its exports went up to $334.8 million as against $320 million. the Ministry, will be Table I used to provide subWorld Imports of Stone, Sand and sidies to modernise Gravel in 2002 and 2003 technology used in by Major Countries the extraction of (US$ million) natural stones such as granite, marble Country 2002 2003 Per cent growth and sandstone and China 436.9 583.0 33.44 upgrade stone prodItaly 534.5 559.0 4.58 ucts processing Germany 375.1 421.8 12.45 units. All India Gran- USA 360.9 384.0 6.40 ites and Stone Asso- Netherlands 308.5 360.5 16.86 ciation (Bangalore) Belgium 215.1 288.8 34.26 has also been playFrance 193.0 222.6 15.34 ing an equally im185.0 222.3 20.16 portant role in pro- Spain 195.0 211.2 8.31 moting the granite Japan industry by UK 151.5 187.2 23.56 organising interna- World total 5,047.1 5,801.3 14.94 tional trade fairs on granite and other Source: Compiled from the data of UN, Yearbook of International Trade Statistics 2004, Volume II: Trade by Commodity, Geneva stones in India every four years. These fairs have been Table II widely participated World Exports of Stone, Sand and by the leading exGravel in 2002 and 2003 porters/importers by Major Countries and other concerned (US$ million) interests both from Country 2002 2003 Per cent growth India and abroad. The interaction Germany 341.4 373.0 9.26 among the key playSpain 321.3 339.2 5.57 ers in such gatherIndia 320.0 334.8 4.63 ings helps the indus313.0 323.5 3.35 try to generate ex- USA port orders and also Belgium 250.5 291.0 16.17 acquire the latest Italy 272.7 282.7 3.67 technical knowhow France 227.5 258.7 13.71 about the developNorway 193.3 216.8 12.16 ments in the granite China 158.0 172.0 8.86 industry in the Austria 115.2 145.1 25.95 world. The government Turkey 88.3 143.6 62.63 of India’s policy to Canada 130.3 139.1 6.75 accord status of 100 Brazil 50.6 117.0 131.23 per cent export-oriUK 105.0 115.7 10.19 ented units (EoUs) World total 4,081.5 4,618.2 13.15 to the granite industry has resulted in Source: Compiled from the data of UN, Yearbook of International Trade the formation of a Statistics 2004, Volume II: Trade by Commodity, Geneva large number of 100 per cent EoUs for manufacturing of mestic and foreign markets has granite-based products. been continuously going up. Though Over the recent years, demand India exports granite of varying for Indian granite both in the docolours, black granite known popu-

Indian scenario
The granite industry in India is concentrated mainly in the states of Karnataka, Andhra Pradesh, Tamil Nadu and Rajasthan. Realising the huge potential of granite, many others states have set up granite units. These include Orissa, Madhya Pradesh, Assam, Gujarat, Maharashtra and Bihar. The Capexil set up by the government of India under the aegis of Ministry of Commerce and Industry (formerly known as the Chemicals and Allied Products Export Promotion Council) over the years has been plying an important role in promoting exports of granite and granitebased products. Besides, the Capexil has submitted a proposal to the Ministry of Commerce and Industry, government of India, for creating a Mineral Upgradation Fund worth Rs 5000 crore. The fund, if approved by

Market Survey
Table III

Segment-wise India’s Exports of Granite and Granite-Based Products During 2004-05 and 2005-06
(Rs million) Sector Granite blocks/tiles polished Granite crude or roughly trimmed Other items of polished granite Granite merely cut into blocks/slabs of rectangular/square shape Other granite Total (all India) 2004-05 959.33 (37.44) 1,054.27 (41.15) 189.16 (7.38) 222.03 (8.67) 137.47 (5.37) 2,562.26 (100.00) 2005-06 1,497.56 (42.90) 1,039.78 (29.79) 411.27 (11.78) 295.77 (8.47) 246.20 (7.05) 3,490.58 (100.00) Per cent growth 56.10 (–) 1.37 117.42 33.21 79.09 36.23

Note: Figures within brackets indicate percentage shares of the total. Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of India, Volume I—Exports & Re-Exports, March 2005 and 2006 issues, Kolkata

realised the importance of India’s Exports of Granite and granite as an Granite-Based Products to Major Countries item offering During 2004-05 and 2005-06 tremendous ex(Rs crore) port potential. Country 2004-05 2005-06 Per cent growth As a result, it has initiated USA 576.21 1,049.43 82.13 several steps to China 513.48 606.16 18.05 promote exports Italy 305.68 328.52 7.47 of granite and granite-based Germany 104.10 143.47 37.82 products. UK 101.01 137.80 36.42 Some of the Belgium 114.66 125.30 9.28 steps taken reSpain 94.17 111.46 18.36 cently include: Hong Kong 95.98 108.68 13.23 1. Declaring granite as a Taiwan 107.39 105.72 (–) 1.56 thrust sector for Netherlands 79.09 101.32 28.11 promoting exUAE 55.40 99.89 80.31 ports in a big Canada 42.09 70.07 66.48 way Australia 35.43 44.63 25.97 2. ConstituJapan 37.25 31.78 (–) 14.68 tion of a separate panel Total (all India) 2,562.26 3,490.58 36.23 (100.00) (100.00) ‘Granite, Stone Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of P r o d u c t s Thereof’ by the India, Volume I—Exports & Re-Exports, March 2005 and 2006 issues, Kolkata Capexil (forlarly as ‘Indian black’ is in great merly known as Chemicals and Aldemand. lied Products Export Promotion The government of India has Council), an export promotion body Table IV

set up by the Ministry of Commerce and Industries, government of India, to boost exports of chemicals and allied products 3. Inclusion of granite in the select list of items eligible for setting up units under 100 per cent EoU Scheme launched by the government of India under the aegis of Ministry of Commerce and Industry 4. Inclusion of granite in the India Trade Promotion Organisation (ITPO) range of products for export promotion 5. Government policy for phasing out export of rough and crude granite, thereby focusing on export of finished/polished granite in the form of slabs, tiles and handicraft items 6. A new uniform policy on granite related with leasing and systematic exploitation of granite resources without affecting the environment 7. Formulation of a new set of rules titled ‘Granite Conservation and Development Rules’ by the Ministry of Mines, government of India, in consultation with leading granite producing states such as Andhra Pradesh, Karnataka, Tamil Nadu and Rajasthan 8. Setting up of a Granite Development Council under the aegis of the Ministry of Mines, the government of India, with due representation from various concerned government departments and other related organisations 9. Setting up of a separate export promotion council for EoUs and SEZs under the aegis of Ministry of Commerce & Industry, government of India, with the main objective of giving a boost to the export of 100 per cent EoUs

Production constraints
One of the most disturbing trends witnessed in the export of Indian granite in recent years was that China emerging as the major importer of Indian rough granite. In 1998-99, it imported the same to the tune of Rs 38.2 crore, which in the

Market Survey
Table V

Segment-wise India’s Exports of Major Granite and Granite-based Products During 2004-05 and 2005-06
(Rs crore) Item/country 2004-05 2005-06 705.86 87.51 69.11 66.67 60.37 53.35 52.89 38.79 35.40 33.37 27.13 23.61 21.35 21.01 14.13 12.25 11.98 10.21 10.12 9.49 9.25 8.48 8.40 8.28 5.88 5.62 5.56 5.01 1,497.56 476.50 174.54 87.82 81.74 65.54 43.30 41.76 14.77 10.29 1,039.78 145.39 38.21 32.96 21.48 20.05 19.83 Per cent growth 84.70 19.17 48.94 51.97 11.57 29.43 44.59 48.73 200.25 127.32 12.71 (–) 7.45 68.77 (–) 4.98 106.58 38.89 18.03 467.22 19.76 131.46 5.35 58.80 125.20 80.39 — 28.90 29.00 39.94 56.10 16.43 (–) 28.99 1.56 5.99 7.78 25.65 (–) 9.08 (–) 20.59 19.24 (–) 1.37 118.30 141.07 88.77 341.07 39.24 90.49 Item/country 2004-05 2005-06 Per cent growth Canada 9.03 17.55 94.35 Belgium 9.62 16.69 73.49 Turkey 2.15 13.35 520.93 Ireland 5.53 8.77 58.59 Australia 3.33 6.95 108.71 Italy 1.44 6.85 375.69 Indonesia 1.43 4.40 207.69 Saudi Arabia 1.22 4.03 230.33 Israel 0.86 3.94 358.14 Japan 3.54 3.08 (–) 12.99 Kuwait 0.64 2.85 345.31 China 1.05 2.32 120.95 Bahrain 0.68 1.69 148.53 Total (incl. others) 189.16 411.27 117.42 Granite merely cut into blocks/slabs of rectangular/square shape Italy 45.76 108.39 136.87 China 66.59 74.45 11.80 UK 21.20 21.24 0.19 USA 9.21 14.15 53.64 Taiwan 16.81 11.13 (–) 33.79 Hong Kong 7.45 10.59 42.15 Spain 16.17 6.49 (–) 59.86 Germany 3.46 5.91 70.81 Greece 0.14 3.78 2,600.00 UAE 3.81 3.11 (–) 18.37 Ireland 1.24 2.71 18.55 Thailand 1.27 2.59 103.94 Japan 1.15 2.00 73.91 Netherlands 1.31 1.94 48.09 South Africa 0.97 1.30 34.02 Total (incl. others) 222.03 295.77 33.21 Other granite USA 83.78 140.73 67.98 UK 10.46 22.67 116.73 Australia 7.16 9.93 38.69 Canada 5.25 9.46 80.19 UAE 1.61 7.24 349.69 Germany 3.64 6.48 78.02 Belgium 4.90 5.70 16.33 Spain 1.73 4.53 161.85 Netherlands 3.04 4.15 36.51 New Zealand 1.89 3.99 111.11 Poland 0.79 3.58 353.16 South Africa 1.20 3.55 195.83 Italy 0.89 3.34 275.28 Total (incl. others) 137.47 246.20 79.09 (5.37) (7.05) Total (all India) 2,562.26 3,490.58 36.23 (100.00) (100.00)

Granite blocks/tiles polished USA 382.16 Germany 73.43 UK 46.40 UAE 43.87 Netherlands 54.11 Belgium 41.22 China 36.58 Canada 26.08 Italy 11.79 Spain 14.68 Australia 24.07 Japan 25.51 Taiwan 12.65 France 22.11 Turkey 6.84 Saudi Arabia 8.82 Ireland 10.15 Hong Kong 1.80 Qatar 8.45 Kuwait 4.10 Nigeria 8.78 Russia 5.34 South Africa 3.73 Poland 4.59 Singapore 5.58 Korea Rep. 4.36 New Zealand 4.31 Denmark 3.58 Total (incl. others) 959.33 Granite crude or roughly trimmed China 409.26 Italy 245.80 Hong Kong 86.47 Taiwan 77.12 Spain 60.81 USA 34.46 Belgium 45.93 Norway 18.60 Thailand 8.63 Total (incl. others) 1,054.27 Other items of polished granite USA 66.60 Germany 15.85 Netherlands 17.46 UAE 4.87 UK 14.40 France 10.41

Source: Compiled from the data of DGCI&S, Monthly Statistics of Foreign Trade of India, Volume I—Exports & Re-Exports, March 2005 and 2006 issues, Kolkata

Market Survey
Table VI

Country-wise India’s Exports of Granite and Granite-based Products During 2004-05 and 2005-06
(Rs crore) Country/item USA Granite blocks/tiles polished Other items of polished granite Other granite Granite crude or roughly trimmed Granite merely cut into blocks/slabs of rectangular/square shape Total (incl. others) China Granite crude or roughly trimmed Granite merely cut into blocks/slabs of rectangular/square shape Granite blocks/tiles polished Other items of polished granite Total (incl. others) Italy Granite crude or roughly trimmed Granite merely cut into blocks/slabs of rectangular/square shape Granite blocks/tiles polished Other items of polished granite Other granite Total (incl. others) Germany Granite blocks/tiles polished Other items of polished granite Other granite Granite merely cut into blocks/slabs of rectangular/square shape Granite crude or roughly trimmed Total (incl. others) UK Granite blocks/tiles polished Other granite Granite merely cut into blocks/slabs of rectangular/square shape Other items of polished granite Granite crude or roughly trimmed Total (incl. others) Belgium Granite blocks/tiles polished Granite crude or roughly trimmed Other items of polished granite Granite merely cut into blocks/slabs of rectangular/square shape Other granite Total (incl. others) Spain Granite crude or roughly trimmed Granite blocks/tiles polished Granite merely cut into blocks/slabs of rectangular/square shape Other granite Other items of polished granite Total (incl. others) 2004-05 382.16 66.60 83.78 34.46 9.21 576.21 409.26 66.59 36.58 1.05 513.48 245.80 45.76 11.79 1.44 0.89 305.68 73.43 15.85 3.64 3.46 7.72 104.10 46.40 10.46 21.20 14.40 8.55 101.01 41.22 45.93 9.62 12.99 4.90 114.66 60.81 14.68 16.17 1.73 0.78 94.17 2005-06 705.86 145.39 140.73 43.30 14.15 1,049.43 476.50 74.45 52.89 2.32 606.16 174.54 108.39 35.40 6.85 3.34 328.52 87.51 38.21 6.48 5.91 5.36 143.47 69.11 22.67 21.24 20.05 4.73 137.80 53.35 41.76 16.69 7.80 5.70 125.30 65.54 33.37 6.49 4.53 1.53 111.46 Per cent growth 84.70 118.30 67.98 25.65 53.64 82.13 16.43 11.80 44.59 120.95 18.05 (–) 28.99 136.87 200.25 375.79 275.28 7.47 19.17 141.07 78.02 70.81 (–) 30.57 37.82 48.94 116.73 0.19 39.24 (–) 44.68 36.42 29.43 (–) 9.08 73.49 (–) 39.95 16.33 9.28 7.78 123.32 (–) 59.86 161.85 96.15 18.36

Source: Compiled from the data of DGCI&S, Monthly Statistics of India’s Foreign Trade: Exports & Re-Exports, March 2005 and 2006, Kolkata

subsequent years continuously increased to Rs 152.4 crore in 19992000, Rs 189.2 crore in 2000-01, Rs 195.8 crore in 2001-02, Rs 251 crore in 2002-03, Rs 513.4 crore in 2004-05 and Rs 606.2 crore in 2005-06. It has now become India’s major competitor in the polished granite. As a result of this development, most of the granite processing units have become sick and plagued with gross under-utilisation of installed capacity as they are not getting the required category of rough granite for processing. This is indeed not a healthy sign and needs attention of all the concerned interests, i.e., trade and industry, state governments and policy makers. Another constraint that the granite industry today is facing relates to technological impediments. Only 20 per cent of the total 10,000 quarries, both large and medium-size in India, resort to mechanised extraction of stones. Technological constraints have severely impacted the demand-supply chain. Modern methods such as wire-saw cutting and jet piercing are not popular among quarry owners who still use the blast method. There is strong felt need to modernise and standardise extraction procedures. The blasting method used by quarry owners results

Market Survey
(28.11 per cent), Australia (25.97 per cent), Spain (18.36 per cent) and China (18.05 per cent). On the other hand, the countries witnessing a negative growth included Japan (14.68 per cent) and Taiwan (1.56 per cent). Item-wise and country-wise India’s exports of major varieties of granite and granite-based products in the years 2004-05 and 2005-06 are shown in Tables V and VI, respectively.

Export strategy
Granite tiles

in huge scrap losses. This severely affects the productivity. The granite industry is finding it difficult to meet big orders from Europe and America because of the non-availability of rough granite and marble blocks. The problem is further aggravated due to closure of several quarries in Karnataka, Maharashtra and Andhra Pradesh. Especially, the closure of quarries in Karnataka has resulted in severe shortage of premium granite varieties such as Red Multicolour, Indian Juprna, Black Galaxy, Absolute Black, Madurai Gold and Kashmir White.

India’s exports
Segment-wise. India’s exports of granite and granite-based products in 2005-06, as may be seen from Table III, registered a significant growth of 36.23 per cent when the same reached a level of Rs 3490.58 crore as against Rs 2562.26 crore in the previous year. ‘Granite blocks/tiles polished’ emerged as the major segment, thereby placing ‘crude or roughly

trimmed granite’ in the second rank. It happened to be the largest segment of exports in 2004-05. The segment during the period registered a record growth of 56.10 per cent when its exports peaked to Rs 1497.56 crore as against Rs 959.33 crore. The segments showing an equally impressive growth included ‘other items of polished granite’ (117.42 per cent), ‘other granite’ (79.09 per cent) and ‘granite merely cut into blocks/slabs of rectangular/square shape’ (33.21 per cent). On the other hand, ‘crude or roughly trimmed granite’ registered a marginal decline of 1.37 per cent. Countrywise. USA continues to be the largest market for Indian granite and granite-based products. There was a phenomenal increase in exports to this market in the year 2005-06 over the previous year when the same reached a level of Rs 3490.58 crore as against Rs 2562.26 crore in the previous year. The other markets showing a steep growth during the period comprised UAE (80.31 per cent), Canada (66.48 per cent), Germany (37.82 per cent), the UK (36.42 per cent), the Netherlands

There is need to evolve a suitable export strategy to tap the tremendous export potential of granite. Some of the suggestions include: 1. Modernising the industry by providing all government support, viz, R&D activity and liberal policy for import of the latest machinery for mining, cutting and processing of granites at the concessional rate of duty 2. Restricting export of rough granite to enable the processing units to source the same without any hurdle 3. Upgrading granite as a major mineral. At present, it is classified as a minor mineral coming under the states’ list putting granite in the list of principal export products. The data on principal export commodities from India is being compiled by the Directorate General of Commercial Intelligence & Statistics (DGCI&S) in the annual publication titled ‘Foreign Trade Statistic of India—Principal Commodities and Countries.’
The author was formerly a research officer at the Indian Institute of Foreign Trade, New Delhi

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