Welcome to the 21st Century of Stone in North America
The U.S, market is a very fractured market with various levels of distribution. Producers typically are quarries with small fabrication plants capable normally of producing only cubical work. This work is sold to contractors for cladding of commercial buildings, or large residential jobs for walls and retainer walls or other uses in residential construction. Very few producers are capable of producing tiles and slabs for the residential market.
The marketing of stone is antiquated and not international in scope. Most producers are regional and do not promote nor sell nationally. Most sales are in house sales and are not through the current channels of architectural representatives or Independent Sales Organizations (ISO's).
Machinery in most plants is limited to simple cutting with multiple lines for various finishes. Since textured finishes are in demand the market most factories are offering bush-hammered, chiselled finishes, or split finishes. The most popular today are the dolomitic limestone's, which can be flamed and are suitable for exterior uses. Indiana limestone's are in decline. For years the Indiana limestone has been the staple of most large commercial projects on the East Coast of U.S. especially in the New York and Washington, DC area where governmental projects are on the increase. However, since the Indiana producers are limited only to producing Buff beige and Grey limestone, they are losing their favour with the architect-designers and will be losing a large market share to other limestone producers domestic and foreign. There will be many changes therefore over the next decade of producers in Indiana changing ownerships.
Marble-Limestone’s represents about 39% of the total stone production in the United States (as reported by Minerals Yearbook and U.S.G.S. 1998 article called “Stone, Dimension-1998”) that is estimated now around 71 million dollars in block format of which 61 million is limestone and 10 million is marble. In retail sales at the common factor of 5 this represents total sales of domestic produced stone around 350 million dollars or 300 million for limestone and 50 million for marble. The United States market production is unable to currently fulfil the demand for stone made by buyers thus forcing more and more the import of stone. Since there are a limited number of producers of tiles and slabs this area of the market is almost 97% import. The only two producers at this time are Georgia Marble producing only their white marbles but now with French ownership will expand over the next five years with imported stone, and New Mexico Travertine who is producing some limited stones from their quarry but has expanded with over 12 limestones from other domestic quarries. Tennessee Marble Company is producing some tiles and slabs but primarily markets the stone for cut to size projects and has limited resources of stones other than their Tennessee pink which is difficult to produce and limited in size of slabs that can be produced.
According to the United States Geological Society, as prepared by Robert L. Virta in the Mineral Commodity Summaries dated February 2000, dimension stone produced in the United States in do1lar value has remained constant for the last 5 years.
The U.S.G.S. study of imports shows $805 million. It is also noted that imports have taken a steady rise since 1996 over 15% per year. This is a sizeable increase that is not foreseen to decline. Also based upon this report it is obvious that imports versus domestic are on the rise and now the United States imports 80% of its consumption.
The market for stone is large with over 20,000 buyers or more and expansion of stone sales is inevitable. The market per capita use of stone in the United States is less then half of that of most European countries. This means future growth for stone in the market. The biggest increase in use of dimension stone for the 1990's was for residential construction in stone fireplaces, renovations, tile for bathrooms and entryway, and especially granite kitchen countertops. The countertop business today is the largest use of granite which is now competing with corian and laminate tops. As the price of corian increases and granite decreases, the prestigious use of granite for kitchens will dramatically increase yearly in the United States.
The direction is therefore clear. In order to reach the largest market in the United States, the consumer, producers will have to restructure their sales and marketing method to combine with local distributor-fabricator-installers in order to compete and make the stone more affordable by the end-user. This will increase the sales of stone for any producer and will assist it to compete against other hard cover flooring materials such as ceramic tile, parquet, wood flooring etc. The D.J. Y. (Do-It-Yourself) market satisfies a segment in the market. The other major segment will be qualified insta1lers to satisfy the other part of the market that is presently lacking in the United States. There appears to be a shortage of qualified labour market that is temporarily being filled by foreign workers such as Mexican workers. Fabricators or factories will be required to retrain the work force in the market if they want to service the buyers.
Traditionally the market has sold stone through importers or wholesale distributors. In turn the stone filters to retail showrooms, contractors, ceramic showrooms, slab distributor/fabricators, and other stone type yards. This traditional method increases the final price to the consumer. This is eroding now to the point where you will find many fabricators are installers and importers of stone thus making the final price of stone more affordable to the end user whether it is residential or commercial. On the commercial level many contractors or owners, or developers are importing stone directly.
What is on the increase? Limestone! More and more buyers and specifiers, whether residential or commercial, are looking for limestone. Granite and marble are declining. In the limestone buyers are looking for finishes such as honed, sandblasted, or waterjet and flamed. Traditionally, even the flamed finish will turn some limestones reddish, and this is being accepted in the market place now. Colours in demand are beige, yellows, and whites. Regarding marble, beige is still popular but now after years of decline, white marble is on the increase, especially pure white marbles. Greens and blacks are still high in demand. Slates are increasing also in demand as well as quartzites and sandstones.
The new finish coming forth in granite is water blast finish which is giving the granite an evenly textured finish while maintaining the colour of the granite and this will replace a lot of traditional f1amed finished granite requirements. Buyers are looking in general for textured finishes, which do not cause the stone to lose its characteristics or colour. Some new finishes are being accomplished, even on limestone, where the stone is flamed, then boned, then wire brushed by machine to give an antique look.
Cross cut travertine is still number one in demand for stone in general and more countries besides Italy are on the bandwagon to supply this overwhelming demand such as Turkey, Mexico, and other countries introducing this stone now into the market. The increase in demand for tile and decorative accessories to tile is making inroads to the largest sales market in the U.S.A., the ceramic industry and hard floor covering industry. Even the old traditional carpet industry is giving way and joining in by buying and consolidating carpet sales with ceramic and stone. This will lead way to increased demand for natural stone tiles. New shows for hard surfaces are opened in the United States to promote flooring and countertops, which will include stone. The important factor that new producers and investors are looking into is new strategic marketing concepts to promote an old product, stone which has not been employed traditionally by domestic or imported sellers. The market is becoming more sophisticated and competitive with so many companies trying to sell in the market that major corporations are investing and hope to capitalize on this fractured market through professional marketing methods. By reaching out to over 1,000,000 potential buyers and specifiers, with professional advertising, marketing, internet, sampling, cataloguing, phone solicitation, trade shows of all kinds, and a large sales force, these companies with insight will revamp and bring stone to more market areas and to more consumers than has ever been seen in the stone industry.
Buyers are looking for easier ways to see the product and get prices delivered to their door from local companies rather than the traditional import method of ex-factory. The package concept is important to the American buyer and making it simple and easy to buy and see the product has always been a problem in the stone industry.
While the demand increases the opportunities for investments in the stone industry in North America run high. A new factory opened in Canada to produce marble tiles and slabs. Rumours are that 5 new factories will open in the next two years to produce limestone and marble as well as new ones for granite. New granite quarries in North America are also being opened at record numbers. Imports of blocks are to the U.S.A. are on the increase. A new factory opened in Baltimore and Atlanta to take blocks and produce cut to size and slabs with gangsaw machinery. This type of business will also increase in the market to fulfil a large demand for quicker service and delivery and avoid some importation of finished product even though the domestic price may be slightly higher.