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Markets: Simultaneously global & local trade

Updated:2008-07-08 10:03:27

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IMM  Carrara  presented  its  market analysis, Stone  Sector  2007“  at the  Marmotec  trade  fair.  Among the  insight  gained:  Asia  is  taking on  an  increasingly  important  role, eastern  Europe  is  augmenting  its implementation  of  stone,  trade dealers must serve local and foreign markets simultaneously.

Two juxtaposed  tendencies  are determining the stone industry world wide:  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  endproducts 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. Mexiko 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 worldmarket-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?

As far as marketing is concerned this would  mean  that  the  stone  industry should emphasise the longevity of its products. The idea was came up during the  ICDS-Congress,  where  the  study was presented, but caused protest: It seems questionable - as was put forththat 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.

Superpower China

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, Marocco, 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 promissing:  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  remaind  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 %).
Source:Businessstone.com

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