Anil Taneja
anil.litosweb@gmail.com
1. There seem to be currently two very different worlds, with diverging prospects.
a). There is an increasingly optimistic world, consisting of EU, USA and China where vaccination is either proceeding fast, or the pandemic is under control( for now).
b). There are a large number of struggling mostly developing countries where the vaccination process is relatively slow, or has barely started. The pandemic is still playing havoc with peoples lives, the local economies are suffering, all kinds of strict controls are still in place, and economic prospects are uncertain.
2. Logistics has become an unexpected major issue, and a serious problem in the stone industry.
a). Shipping costs are sharply higher than in the pre-pandemic age, by as much as 3 to 4 times. There are also difficulties in finding containers for transporting stone. Moreoever, on some routes there are also delays in finding ships to transport the containers to the destination. This problem is world wide but especially acute in the East to West traffic.
b). The delays in shipping are leading to delayed payments to suppliers and creating severe stress on working capital requirements for many companies.
c). Difficulties are being faced in quoting for projects with stones that require shipping. The absence of stable shipping prices and uncertain delivery schedules makes quoting for projects with firm commitments, hazardous.
3. There is a huge increase in renovation work, especially in the residential sector, mostly in the developed world. This strong demand in the housing sector is expected to persist in the short and medium term. Mortgage rates are low, especially in the EU and USA, borrowing is easy, people are rushing to buy bigger houses in the new environment of working from home. Housing prices are currently rising at the highest rate in decades in many parts of the world, which means there is further incentive for new construction.
4. The reduced presence of China in international markets has provided unexpected possibilities for granite producers in the Iberian peninsula, especially in pavings, for the Indian companies in the tombstone industry, and companies everywhere which do projects in stone. There is also a big demand for imported blocks of marble and granite in China, pointing to a dynamic local market.
5. Development of the stone industry is now taking place in countries like Cambodia, Algeria where new factories are coming up. There seems to be greater demand for beige colour, and greater demand for brown and red colours. The demand for black continues to be more than the supply.
6.The absence of business travelling during 15 months is having significant consequences.
a). Extremely difficult, if not impossible, for companies to find and develop new customers, in the initial stage when the person to person contact is fundamental.
b). There seems to be little possibility of business travel from countries like India, Brazil, Egypt, Turkey, etc. in the next few months due to the prevalence of pandemic.
7. Industry people took to video conferences in a big way early last year using Zoom, Teams, etc. but there is now a general feeling of exhaustion among everyone with these new technologies. Several hours spent daily in front of the screen is stressful. Webinars and other digital events no longer attract that much of an audience.
8. The absence of trade shows so far has robbed people of the person to person contact, the possibility of discovering new stones or novelties in machinery, or discovering new business possibilities.
a).The first major stone fair has been held in Xiamen in mid-May, but it has been mostly a local fair due to travel and other restrictions.
b). There are expectations that some trade shows will finally take place in the second half of the year in the EU and USA. They will likely be either local or regional shows since people from many countries still cannot travel beyond borders and many others who are already vaccinated are likely to be cautious about travelling for now.
9. Consolidation of relationships of trust between buyers and clients has taken place.
a). Self inspection has become the new industry standard in most business relationships due to lack of other alternatives. Greater trust and friendship between buyers and sellers has been one result.
b). With market demand strong and facing all kind of travelling and logistical problems, the buyers seem to be less focused on bargaining for lower prices, and more on ensuring availability of material and maintaining sufficient stocks without compromising quality.
10. Overall, the level of uncertainty still remains high everywhere. The unpredictable nature of the virus which is still creating havoc and massive economic, social and emotional damage in large parts of the world, means the disruptions created by the pandemic are still likely to affect the industry and its people even after the masks have been taken off.
