CHAPTER -2

NATURE AND EXTENT OF EXPORTS OF GRANITE

INDUSTRY

NATURE AND EXTENT OF EXPORTS OF GRANITE INDUSTRY

2.1. HISTORY OF INDIAN GRANITE INDUSTRY :

The Indian granite industry is one of the strongest rum1 based organized

industry achieving about a billion of US dollm in exports giving employment

for about 2 million people along with development of other ancillary and

servicing industries. The granite industry have established a bigger market in

India in construction and decorations of commercial and residential buildings.

Unfortunately the industry has not been properly been understood and

supported with the consistent uniform, reliable, long term policy encouraging

the industry with promotional measures on par with the granite policies existing

in the world. In the southern states of Tamil Nadu, Karnatdca and Andhra

Pradesh, the rules have been very drastically changed almost every year or

altered, between 1975 to 1995. The rules of granite industry were introduced

more or less to totally restrict and mono policies and the policies be the State

government corporations and as well as to prevent the growing granite

processing factories established as per the state government earlier policies. The

rules were originally brought to set up granite processing factories with all

encouraging incentives and preferences but once the factories were established

the policies were changed wilout caring for the raw material souras for the

existing industrie. The liberalized rules introduced from 1991 in the country

for many of the industries and commercial activities have not touched the

granite industry. So also export fmnS despite its l a m investment and

~ S ~ c e i l of top priorities, the indusby has not been a d w t e l y helped.

Indian granite export has tomb stones commenced as early as 1940 black

&"a'' itesr from the borders of Tamil Nadu, Karnataka, and Andhra Pradesh were exported in the form of processed in the tomb stones to the U.K. by private

cntmpreneurs. Private entrepreneurs export, black granites as dimensional block

stones to Japan from Tamil Nadu in 1972. Tamil Nadu Government deleted the

nrles and introduced rules for leasing granites for production as

omarnentd stones i.c., in the form of dimensional blocks as per the rules

introducd, the entrepreneurs have to set up processing industry for exporting

the processed form. Subsequently, Karnataka and Andhra Pradesh followed

similar rules for grant of leases to establish processing factories since granite

processing industries are first generation industry and is new to India for

quarrying dimensional stones for processing machinery and for fhther

conversion of the blocks for various application like monuments, building slabs,

tiles etc. The consumables like cutting blades, the diamond blades, polishing

abrasives etc., all the machines and equiprnents have to be imported. The import

policy during 1970s was not congenial for import of all these items. The granite

export is based on indigenous raw material.

During 198 1, the 100 percent Export-Oriented Unit (EOU) scheme was

introduced by the Government of India which relaxed the import-export

regulations and made it congenial and encouraging for setting up of

Export-Oriented Units in granite industry. As a result, p i t e industry is now

becoming one of the important sources of revenue to the Government besides its

beneficial aspects of generating employment to the m l labour.

The overall export which was Rs.180.26 million during 1 9 9 has reached

to Rs.10,650 million during 1996 i.e. by 59 times (Table 2.1 .). The rough

dimensional bl& expot& hm achieved nearly 30 times. The expat of

Paessed granite w a b.3.6 million during 1982 and it has achieved Rs.5520

i.e. over 1 53 3 times in 1996. The overall export of granite for the period

~~ri l -July 1996 in comparison to April-July 1997 has fallen by 23 percent, fhs

port of blocks in the same period has fallen by 41.36 percent while the export

p m d granite has improved by 2 1.23 pmmt.

Table - 2.1 :A C Q U I ~ ~ ~ ~ S O U of Expart peflormance of Granite during 1982

Export during 1982

Overall export of granite

products

Rough dimensional

1 products 1 (2%) 1 pmducts 1 (52%) I

Value (in mn Ra). 180.26

blocks

Processed granite

L I 1 I I Source : Indian Stone - Veeramani.

176.65

- Export during

1996 Ovmll export of

(98%)

3.6

Value (in mn RB) 10650.00

granite products

Rough dimensional 5 130.00

blocks

Processed granite (48%)

5520.00

A n p . r b n of Export performance of Granite during 1982 and 1996

India's export performance from granite during 1990 is given in Table

2.2. it is c l ~ that till 1990. India was exporting only granite. And further the

q~mtum of granites export was v e q less. For example, during 1985-86, India

granite worth of Rs. 0.51 cmres. But during 1989-90 it exported

double the amount of p i t e i.c. of Rs. 1.47 cmres. From 1991 onwards the

p i t e export of tho country picked up and it also started exporting marble.

During 1991-92 India exported marble worth of Rs.O.8 crores. During the later

years export of marble inceased at a very fast rate. During 1992-93 India

earned Rs.4.22 ctr)m from the export of marble which was more than the value

of granite export i.e. h.3.76 crores. The same trend has continued during the

later years too. During 1994-95 India exported granite of Rs.6.70 crores and

marble of Rs.10.26 crores. Similarly during 1995-96 and 1996-97 also the value

of export of marble was Rs. 16.00 cmm and Rs. 19.33 crores and the value of

export of m i t e was only Rs.9.09 crores and Rs. 1 1.05 crores respectively.

Table 2.2 : Itndia's export performance fiom Granite During 1990.

(Amount in Crores)

I I I 1

Source : Indian Stone - Veeramani

Year

1980-8 1

1985-86

Granite

0.26

0.5 I

Marble - I

Total

0.26

0.5 1

QnnlL, yu#. tobl

India's export performance from Granite During 1990

From the table it is evident that exports or raw silicon stone

(94000 tomes) amounted to 81.27 percent or the total exports while those or raw

caicerons stone to a more 2.16 w e n t while processed stone amounted to only 15.58 percent. We are lagging far behind in exports of processed stone. Though

the Indian granites industry has crossed the 286 million mark in June 1995.

Table 2.3 : Country-wise Export Performance during 19%

(Quantity in tonnes)

Quantity

Italy

Japan

Taiwan

Germany

Belgium

France

Spain

Middle East

Holland

U.S.A.

Thailand

Australia

Canada

Singapore

9

Raw Silicons 396

1 89

137

74

3 2

25

16

IS

14

10

7

2

1 I

Others

S. Korea

Total

Raw Calecrous 17

I

- - - - - 6

- - - . - - -

: International Trade in Dimensional stone, Indian Stone, Veeramani

3

25

946

Proawed

rn

23

g

17

2

- I

30

7

6 1

- g

3

19

10

Total

413

212

137

9 1

34

25

16

5 1

2 1

7 1

7

2

4

19

10

2

. 25

10

3

193

15

28

1 164

OT&l I S.Konra lOthcrrs l U.K. . Singaporrt ICanada I Australia a Thailand I U.S.A .Houmd .Mik Em rspein l Franee Belgium m-ny OT-n

I Italy W Japan

Raw Slliecwrr Row Cokcrous Praeued Total

Countrylwiae Export Performrace during 1996

2.2. MARKET SCENARIO : India has been a traditional expoiter to Japan h m the early seventies and

Japan still imports mom than 40 percent of our granites followd by Europe

closely around 39 percent. U.S.A. around 7 percent and others accounting for

the rest. The greatest advantage India has is the number of varieties and huge

d+ts. Continuous supply or a selected variety of granite is a crucial issue to

stay ahcad in the global market. The Indian exporters are at a disadvantage in

this regard as t h g feel that long term leases have a bearing in this issue. Lack

of i n b t r ~ 1 ~ t ~ ~ . heavy duty trucks, travellers, recovery vehicles and inadequate

handling facilities at the ports are some of the bottlenecks faced by exporters.

The taste of overseas buyers is different in different countries and is

mainly based on the sentimental and aesthetic values. The market fancy of

importers are given below in the table.

From the table above, it is evident that Japan's choice is jet black and

fine medium grained grey granite. Taiwan and Korea prefer porphery varieties

and red and galaxies. European countries major choice was multi coloured

granite varieties with violet, pink and blue colours with attractive flow designs

like paradise srikakulam blue. The U.S.A's choice is mostly processed blocks

of black and c o l o u d granites. Gulf countries import processed tiles and slabs

preferably made out of green varieties of granite.

India is proud to possess all such varieties of granites which can cater to

the different tastes of the people living all over the world. Based on the

importers fancy/spocifications, granite marketing can be grouped into two major

sectors from the point of view of exports (Table 2.4)

1) Raw Block and 2) Processed Items

In Pmeucd items 3 Tiles b) Slabs C ) Mmuments

able - 2.4 : Market Fancy of Importem by Different countrim in the world it.om India. - importing country Preference / Major choice - Japan 1) Jet Black

2) Fine medium grained grey granite - Taiwan & Korea 1 ) Porphyry varieties

2) Red and galaxies --

~uropean countries Multicoloured granite varieties with violet,

pink and blue colour with attractive flow

designs like paradise sribakulm blue. -

U.S.A. Processed blocks of black and coloured

granites - Gulf countries Processed tiles and slabs preferably made

out of green varieties of granite. - - Source : International Trade in Dimensional Stone - Veeramani.

2.3. EXPORT PRICES OF INDIAN GRANITES

Rough Blocks :

With the entry of main competitors like China and South Africa the

export price of b ~ t h mugh and finished products of Indian granites now

fluctuates (except for a few premium varieties like kunnam black also called as

"Noble black" Ilkal Red, Paradise etc). The export prices of Indian granite

(rough blocks) are presented in Table 2.5, We can note that black granite, black

galaxy, kunnarn black etc, fetch high price than the other types of granite. Ilkal

Red also command a good price compared to Hassan Grey, Benga1 Blue etc.

Table - 2.5 : Export Prieer of Rough Granite Block

SI. NO. 1

I I

5 I Sira grey 1 660-750

Type

Black Granite

550-750

690-750

1

4

I I

6 I Himalan Blue 1 400-700

Price Range in USDtCbM Fob 1200-2500

2

3

I I

7 I Srikakulam Blue 1 600-700 1

Paradise

Kashmir white

Ilkal Red

I I

8 I Vijayanagarm White 1 600-750

850-950

I I 1 1 I Jhansi Red 1 700-800 I 9

10

1 I 12 I Yellow & Pink 1 600-675

I

13 1 Green / 450-6001

Black Galaxy

Ananthpur Grey

I I

14 I Kunnarn Black 1 1500-2500 I

1 300- 1 500

700-750

I 1

16 I Multicoloured granite / 450-750 I 15

I I

19 I Bengal Blue 1 450-650 I

Sawan Rose

17

18

I I

20 I Silver white 1 500-600

400-500

I 1 I 1

Source : International trade in dimensional stones - Export h r n India -

Porphyry Lavender

Hassan Grey

Veeramani

400-550

300-500

Tables 2.6 and 2.7 exhibits the expart prices of processed slabs and tiles

and for monuments, respectively. It reveals that the thickness, size and the

pfices are indicated in these Tables.

Table 2.6 : Export prices of Processed Slabs aad Tila

I I

Absolute Black I 20 I 8

Calou r

Black galaxy

Thickncsr (MM)

20

Absolute Black

Paradise

I I

Srikakulum Black I 20 I 6-7

FOB Price USD Per sq.ft.

7-8

I

I 1 1 Source : International Trade in Dimensional Stones Export fkom India -

10

20

Kanakapura multi

llkal Rcd

6

6

20

20

6

8

Thkkft0~8 FOBPW (MM) US0 pw sq,R

Export prim of Promscd Slabs and Tilu

Table 2.7 : Export Price8 of Monumtnk

Country / Colour c1 I I

1. U.KI Black I 00 Type 27x21~3 I 70-75 pwn& I

I 1 76~55~6.1 cm I - do- I 2. Japanese Bosh 1

I gourn : Stona 1996 I I I

Besides slabs, tiles and monuments exported from India limited demand

exists for ornamental piece like flower vases. Furniture, bosaki lanterns (cubes)

etc., made out of granite waste.

76x6 1 x6.1 cm

The consumption of granite in the construction industry in India is

picking up tremendously in the last few years. The 100 percent Export-Oriented

Units are permitted to sell 25 percent of their production in the local market.

The issue of domestic tariff sale is a major problem. Now the average duty

content for products sold in the domestic tariff is 49 percent. This it is felt,

makes it is dif?icult for Export-Oriented Units to compete with other non-

Export-Oriented Units. A section of the industry feels that since Export-

Oriented Units use indigenous raw materials, such duties are unwarmnted.

120- 130 USD/Piece

The Indian granite industry still holds a promising hture (Inspite of stiff

competition by L e new entrants in the global market) because of c m i n are

material available in India. Though the trade is registering an upwsrd -4 the

market potential not been tapped to the fullest possible extent. The f o ~ i ~

market is m d y lo abmrb havy quantity of good quality Indian granites. In

view of the luct*8tiv~ n a m of the granite market several enhp=neW, businas

houses both high and small who have ventured into this industry should attempt

to have co-ordinated effods involving planning and follow up by Indian

inoulcate mutual trust and cooperation among the tradm, in- and

rnchange information for mutual benefit. The new entreprenem should choose

the right psduct mix to compete effectively in the global granite market.

2.4. STATUS OF ORNAMENTAL STONES OF MRTYATAKA :

In Karnataka, the use of stones for construction and architecture is as old

as civilization and had seen a growth purpose in the palaeolithic ages such

shelters were called as "Rock shelters" which are even today preserved in the

hills of Btnekel and kurugod. The beautiful temples built in stones and the

delicate carvings in stone at Somalathpur, Hoysala temple, Helebid-Belur of

I l l h century A.D. and the gigantic stone caming of Bahubali at

~hravanabelagola, Gomateshwara at Dhmasthala, Vijaya vital temple of

Hampi in Bellary districts. The latest example of Vidhma Soudha and General

post and Telegraph Oflice Building at Bangalore out of granite temples of

Aihole, Pattadakallu, Badami out of quartzite 1 sandstones are only a few

examples of the skill of our architecture. The finally polished soapstone pillars

of Belur temple are the example of the skill of our ancients to polish the stone.

An ornamental stone is defined as an attractive natural stone that is not

practical for jewcllery purpose but useful for fashioning into ommental objects,

whereas decmtive stone is used for architecture decoration as in mantels,

columns and stone fronts.

The principal properties of rock must possess to be used as ornamental

Stom in present dryr (8) plearing colour (b) uniformity in colour (c) ability

to take high polish (d) ease amend ability to cutting and shapiq without

developing sacondary flaws like cracks shears etc. (e) durability (f) ability to

yield thin 1 s stabs on cutting (g) less wear and tear on the cutting and sizing

machine components.

The principal rock types are currently being used as ornamental and

decorative stones are black dyke rock or "Black granite", pi* and grey granites,

ink and gray ~rphyrities, pink magmatitic gncisscs, granites containing

mixtu~ of pink and gw feldspar, green granite and marbles, homogenous pink

and grey granites and homogenous white marble are largely used for monuments

and memorials. The other varieties of rock and marbles are used for wall

paneling purposes in large buildings.

The buyers are guided by aesthetic quantities such as design, surface,

absence of 'hair' cracks, flowers, white spots etc. among the buyers who are

transacting with Karnataka, two preferences are reported. The Japanese lay

emphasis on uniformity of colours, the Italians and some of the west European

countries prefer large sized blocks to suit their gaint sized cutting machinm,

some of the size preferences to importing countries are given below in Table

2.8.

Table 2.8 : Sire Preferences of Importing Countries

I Name of the Country I She Preferred I

I 180CM x 80CM x SOCM I Source : Indian Stone - Veeramani

NETHERLANDS

AUSTRALIA

78CM x 78CM x 39CM Tombstones 200CM x 1 OOCM x lOCM 240CM x 240CM x 60CM

In USA the National Bureau of Standards developed specification of two

as a) Engineering grade b) Architcchual grade

The grading adopted in Tamil Nadu, the marketable export quality black

pnites are classified into 4 main types, such as superior grade A, B, C and D so

on. Superior. grade granites arc jet black in colow, f ne grained texture with no

impurities. Grade A granite8 are Iws dark in colour, medium to fine grained

without impurities and B & C grades with impurities.

2.5. MARKETING OF ORNAMENTAL STONES :

The ornamental granite producing countries in the world may broadly

grouped into (1) countries that produce primarily for export trade, (2) countries

that depend dominantly on import for consumption and (3) countries that have

adequate reserves, but resort to import for conservation of indigenous m e s . In the first category the countries like India, Brazil, Belgium, Portugal,

Zunumberg, Spain and South Aftica. The second category includes the

countries like Japan, Argentina, Germany etc. The third category includes the

countries like U.S.A, Italy, Canada, Russia, Holland etc. India endowed with

extensive deposits of ornamental granites has a vast potential in the world

market, Providecl there is a pragmatic approach to industry's requirement, (a)

the primitive quarrying techniques employed by Indian producers and

consequent effects on exports consistency (b) lack of suitable Research and

Development techniques which sustain the trade. (c) unethical trade practice

employed by the disorganized entrepreneurs and (d) fkequent changes in mineral

policies. The granite industry mostly financed by the private entreprenem

seems to have a hesimcey to go in for optimum investment in the trade,

currently financial condition in the industry are also not attractive for scientists

and technologists to promote their careers.

Export of ornamental stonedgranites ftvrm Karnataka in the unprocessed

fom started in year 1977. Japan evinced interest in the import of black granite

fm Karnataka. The countries among which the major buyers of &mataka

granites are ; Italy, west Germany, USA and Japan. The export of ornamental

stones from New Mangalore port in the year 1977 registered quantity of 10,300

metric tonnes. In 1982 about 1,17,800 metric tonnes. Karnath earns about 4

million dollars a year in foreign exchange and m u a l revenue that to Mangalm

port from the trade is about Rs.30 lakhs. The export of ornamental stones from

ang galore Port in 1986 is Rs.2,81,38,500. A quantity of about 8000 tonnes

from Karnataka is also exported from Mangalore Port. The export ftom whole

of India is 4.00 lakh tonnes and Kmataka contributes about 50 percent of

Indian exports. (Table 2.9). U.S.A. U.K., Japan, West Germany, France, Italy

are the major consumers of polished granites of the world. The major export to

U,S.A., Japan from South Africa, Sweden, Portugal, India, Srilanka and China.

U.S.A. is considered to be biggest consumer of polished granites in the world.

U.S.A.'s requirement is met fiom Italy, Germany, South Africa. Italy and

Germany are importing granite blocks more from countries like South Africa,

India, China etc. Italy, Germany, U.S.A. market is well open for Indian granite

export and exploitation.

Tabie - 2.9. : Export of Granlte f h m Karnstaka

I I 1 I Source : Dept of Mines of Geology - Bangalore.

Year Quantity (in lakh metres)

Value (in erorer)

Export of Granite from Karnabka

The qmtity of export and tho revenue earned is fluctuating between the

years when we compared to the export in the year 1985-86 to 1986-87, the

quantity of export has fallen. Similarly, between the year 1989-90 to 1990-91,

the quantity of export has riaen to a considerable extent. On the revenue side, it

shows that the revenue earned through export of granite is also fluctuating over

a period of the. There is some correlation between the quantity of export and

the revenue eamd. But, this correlation varies fiom time to time. While, the

correlation is positive at the point of time. It is very much clear from the

diagram above that for some period, the revenue earned through export of

granite can be increased by increasing the quantity of export of polished granite

instead of exporting the granite blocks (unpolished). This is also opined by state

governments, entrepreneurs and Associations.

Table 2.10 : District-wise Production of Granite in 1995-96 and 1996-97

and its Value

Districts I 1995-96 I 1996-97 Value 1

Bangalore NorCh

I I I I Source : Dcpt. of Mines and Geology, B a g a l o ~ ~

(Toones) 1 1.34

Bangalore South Bijapur Bellary

C hikkamagalur

Chitradurga tfassan Kolar

Shimoga Tumkur

59.850 5.489

00.396 00.270

00.326 00.663

-

57.578 42.55 1

00.137 .I

00.503 00.656

00.9 16

(Tonnes) 0026 1

100.73 -

1 -93 9.47

1 -96

6.64 -

- 2534

(Rs. in lakhs) 2.6 1

- 4.358

- 8.72

AAer hearing into consideration several aspects of exports, the Govt. of

India has come to the conclusion that the maximum export pattern of Indian

g-ranitc could be 50 w e n t could be of dimensional blocks in rough form can be

achieved over a pdod of five to ten years. Simultaneously the ultimate target

fixed CAPEXIL, the export promotion body for granites has also e n d o d the

same view on exporting granite products including blocks in the ratio of 5050

as r e f e d to above. The granite industry is in fact already proceeding in that

direction and has reached more or lea a ratio 30:70 and it will reach the target

of 5050 over a periad of next two years.

2,6, MAGNITUDE OF WASTAGES IN GRANITE INDUSTRY :

In India, absence of modem quarrying and transportation techniques

together with inability of small scale pmcssors to produce higher value added

items leads to considerable wastage of granite. Even though the processing

techniques have improved in India to some extent, there is considerable degree

of wastage taking place as shown in the following Table 2.1 1.

Table - 2.1 1 : Percentage Wastage in the old and new method of processing of granite,

I I

Tiles Making I 20 10 I

Quarrying

Slabs Making

I I I

source : Department of Mines m k ~ e o l o ~ y , Government of K r n * Bangalore.

Old Processes

40

30

New Processes

20

20

Quarrying S l r k Making u n h lllrklng

OldPmona N w P r o c m

Percentage Wastage in the old and new method of processing of granite

The 100 percent export oriented cutting and polishing units and other

granite cutting and polishing industries will greatly benefit when the number of

leased quarries begin to function. There will be increased exporb of both raw-

blocka and value added polished granite which will help the country to earn

more foreign exchange and the State benefited by way of increased royalty fiam

the present mu1 realization of Fb.1.09 cmres. The value of p i t e exports

through Mangalore Port 1989-90 was Rs.83.75 crores and it was Rs.147 cmes

at the all India level. Such significant increase in exports taken together with the

increasing international demand is sign of bright future for the Indian granite

industry.

Though the granite pduction is expected to continue to increase

steadily, there are several constraints like quantum of proven, reserves, quality

and variety of granite, logistics of processing, marketing, transportation and

environmental pollution. Despite the much quoted Statement that our granite

reserves are adequate and abundant, a closer examination reveals that of the 200

million cu.mts of granite reserves, only about 10 percent come under the proven

categories. The rest is equally split between 'inferred' and indicated categories

of the entire reserves, hardly about 5 to 10 percent may be good quality granites,

which find usefbl for exports and processing. The quality of our mining,

dressing and processing is extremely poor when compared with other countries.

The granite industry has projected a target of exports Rs.3000 crores by

the turn of the century and it is possible to triple a decade from now. This will

require nearly about 8 to 10 million tonnes of granite production every year. It

will become necessary to locate newer and viable granite deposits -ugh

systematic and scientific approach to gear up the pduction.

It is against this background, the granite programme of 10 million tanna

pet year by the year ZOOS hss to prepared. It would be based on experience

ginsd to date in the entire spsctmm of granite activities from exploration and

mining of granites, to design, according to our needs entirely on our own.

Indigemisation efforts provides the confidence tcr take up such a large granite

programme. .The earlier concept of breakeven point for production and value

was postulated when production and processing costs were extremely low. It is

not entirely valid today. Granite production cost are ever increasing. The

relatively low levels in the wages of the labour in granite mines sre bound to

increase, thereby resulting in higher granite production prices. However, these

costs are just one of the factors to be considered in the overall long term strategy

of planning for granite production. A long term integrated approach to granite

exploitation production, processing and market is called for. It is therefore

imperative, that finn perspective plans for the granite sector are drawn up and it

is in this context that the state and central Mines ministries have to propose a 10

year granite programme. So that the policy is not often meddled with and a

congenial atmosphere is created for further consolidation of this import foreign

exchange earning sector.

A ten year programme to cover exploration, exploitation, environment,

processing and marketing for granite may be evolved which will M e t

consolidate for a steady growth of the sector over the years. The following

issues may be attempted and attend to :

I ) So frrr the individual entrepreneurs only identified the deposits and

applied for obtaining mineral concessions. Oovt. agencies have not

played much role in survey, prospect and evaluation of deposists. It is

high time that Government agencies play significant role in this regard.

It is good augtq that Geological Survey of India has already initiated

their exploration progmnmes in Andhra Pradesh at the instance of Govt.

of Andhra Wesh. Geological S w c y of India and the State

Directorates of Mines and Geology should take up survey prospect and

identify all dimensional stone deposits and develop a resources data base. 2) Compile and publish information of the occurrence and its details to the

benefit of the entrepreneurs.

3) Evolve a uniform progressive policy congenial for the healthy p w t h of

the industry and exert pressure on various state govexnments to announce

the same with or without minor modifications. The policy should have

long yeam of l a s e say 20 years with adequate-extents and assured

renewals and not burdensome royalties and dead rents with least delays.

4) Congenial export import policy with facilities to import quarrying

equipment9 and machinery without duties, easy removal of rejections and

enhancing the rejection percentage h m 5 percent to 30 percent for 100

percent Export-Oriented Units, etc.

5) Formulation of violent ventures with multinational companies who are

leaders in the relevant industry to have the best of technology in

quanying, quality and marketing. New mineral policy of 1993

adequately provide for such ventures. Hitherto, Indian cntpreneurs have

had only marketing t ieups which do not envisage comprehensively all the

needs of the industry whereas tieups to cover exploration, exploitation,

processing value addition, marketing etc., are need of the hour. This will

promote export of the value added products as multi national companies

would like to set up joint venture processing plants in the country instead

of voluminous export of raw blocks.

6) The Indian companies should collaborate with local distribution of stone

in different parts of the world to promote their products and service to the

customers. Very few such organized amrngements are in existence.

7) Indian companies have to go global by taking over industrial units

engaged in processing and fabrication of stone in Europe to gain access

to market tachnology inputs at proper prices and the brand names,

8) Lack of common approach by Indian Industry in pricing, quality etc., arc

causing 10s. of markets and value for the products. Joint promotion

strategy in lacking among Indian stone export-. In fact they compete

with each other resulting in lower realization of value. They are d s o

loosing projects in the absence of consortium bidding whereas Italian and

Spanish Companies are bidding in consortium.

9) Most of the entrepreneurs should resort to consortium bidding for

projects for mutual advantage of the entrepreneurs and the country.

1O)Most of the entrepreneurs do not confine to quality, consistency and

delivery schedules which in turn result in rejections, bad reputation and

fewer repeated orders, it is of paramount importance to maintain and all

the time strive for improvement to sustaining the competitive

international market.

1I)Encoumge Indian Industrial units to obtain IS0 9000 series for having

easy entry in the international market.

12)The investments have been steadily increasing in the granite industry for

both quarrying and processing factories for 75 crores in 1987 to 700

crores in 1992 to Rs. 840 c m in 1994. Quarrying is not recognized as

an industry and firrther heavy wotking capital requirements are not

forthcoming in time because of which sickness is likely to creep in and

the infrastmcture created would become a waste. It is desirable to create

a financial cooperation / bank exclusively for the mining industry.

13) Value addition will be 200 percent in the end product fabrication, special

finishing etc., rather than basic processing of sawing and polishing which

is hardly 25-30 percent.

14)Poor and ineffective packing of the finished gods will impair the quality

and presentation of finished goods.

15)All steps should be taken to rmcrge India as the second stone center of

the world after Italy with the mutual co-operation of the entrepreneurs

and the Government.

2.7. GRANITE EXPORTS AND VALUE ADDITION:

The conference of State Ministers of Mines has recommended meas-

to support additional exports of value - added granite products from India and to

ensure adequate supplies to the 100 percent export-oriented units which

contribute largely to exports of granite in value - added form.

All matters pertaining to mining leases, royalty, dead rent and lease

period as well as renewal of leases will be referred to an Expert Committee to be

headed by the Ministry of Mines with members from the Ministry of Commerce,

State government and the representatives of the granite industry.

It was also recommended that the limit of Rs, 20 crores for duty - free imports of capital goods under the Export Promotion Capital Goods (EPCG)

scheme should be reduced to Rs.3 crores to encourage speedier development of

the granite industry subject to the fulfillment of export obligations. It was

further agreed that granite export-oriental unit should be permitted to import

granite under the EPCG scheme.

Recommendations of the Granite Development Council set up by the

Government in Augwt 1995 covering critical issues relating to granite industry

including technological u p m t i o n and promotion of scientific methods of

m i t e mining to improve capacity utilization, have been g e n d l y accepted.

2.8. ABSORPTION LABOUR IN G W I T E INDUSTRY : Granite industry comprises of two important sections viz.,

1 ) Granite quarrying

2) Granite processing.

This includes cutting and polishing of granite into various shapes.

A) GRANITE QUARRYING

In Karnataka, there is vast potential for employment of both skilled and

unskilled labour in not only quamying but also in its processing sector.

Quarrying was taking place mainly in the unorganized sector only under

the court orders. The ordm of the high court till recently was prohibited the

interference of the offices of the Mines and Geology and the Revenue

Departments in quarrying and transportation of granite in the private lands.

Now, the liberalized policy on granite quarrying is in operation after the

permission for the patta land owners to do the quarrying work in their lands

without any permission from the State government. But according to the

judgment of the Karnataka High Court for the transportation of the quarried

granite blocks have to follow 62 A rule of the Kamataka Minor Minerals

Concession Rules (KMMCR) of the Karnataka Minor Minerals.

According to the Kanrataka land grants policy, permission for qutltying

in patta land will not be applicable to those who have got the land brn the

Government.

B) GRANITE PROCESSING :

At present processing capacity of the existing and proposed 100 percent export-oriented unib where out of 170 licences issued to 100 w t

export-oriented p i k s (licences issued only to those units which undertake tho

qurying rctivity only for export purpose and not for domestic purpose) project.

The installed capacity of the existing units and the total capacity of unita under

jmplemtntation am represented in the Table 2.12.

Table 2.12 : The inrtalled capaclty of existing unit$ and the total capacity of units under implementation

Number of units

25 Existing I I 1

I I I I 1 Source : Directorate of Industries , Government of Karnatdca, Bangalore.

Total capacity in sq.mtrs

8,6 1,580

Per annum in cu.mtrs.

28.700

20 under I 34,00,000

implementation

45 units

The quarrying technique presently employed in the State are either semi-

mechanized or essentially manual in which on an average granite quarry

producing around 75 cubic metres of granite per month the labour requirements

is about 150.

Requirement of granite blocks Pet

Month 2,392

In India 70 percent of the granite qumy is taking place for the purpose of

construction work and it is also said that 2 million workers are engaged in the

quarrying of granite for this p u p s all over the country and 30 percent of

quarries are taking place for extraction of granite for decorative purpose and

they employ about one and a half million labourers for this purpose. It is also

said that India is in the fourth position in the export of granite in the world

market and Indian granite constitute about 18 to 20 percent of world production.

1 1 , I 3,200

42,6 1,580

The statistical available in the Department of Mines and Geology E V ~ S

that ori&inally the Dcp-ent had granted more than 800 leases. But, with

9,442

1,4 1,900 1 1,834

increase in the Applications in the Department of Mines and Geology for the

purpose of getting pamission for quanyinp, it could be anticipated that them

would not be less than 2000 leases in the State next two years duration by which

time the future quarrying activities are likely to employ not less than 30,000

labourn.

Hill transporting truck load, generally 4 to 5 cubic metres of granite

stones are transported. Therefore for the transportation is around 10,000 cubic

metres per month, the total number of trucks required are 2000 to 2500. In this

context, employment would be created for the truck drivers, cleaners and other

labourem required for loading and unloading of granite at the concerned taluk

level. This is represented in the form of a table given below which shows the

number of persons employed for the transportation of granite in the State.

As we mentioned in the Table 2.13 if the requirement of trucks is 2000,

the number of petsons employed in trucks would be 8000 and if the

requirements of trucks would be around 2500 as a result about 15000 labourers

would be required for the purpose of transportation of granite. This means to

say that granite industry would provide employment to about 1000 local nual

population who would be othewise engaged in mainly agriculture where there

is already disguised unemployment. Hence, granite industry is a source of

employment to nual population living in interior area where the granite work is

undertaken.

Table 2.13 : Divinioa of hbour in Granite Indurtry

I I

2. I Low Cleaners 1 2000-2500 1

I 1 loading and unloading purpose in I I

NO. OF PERSONS '

2000-2500

* NO.

1.

DIVISION OF WORK

Lorry Driver#

2.9. INDIA IN THE WORLD MARKET :

Total

Since time immemorial, Natural stones occupied a very special position in

the Indian culture. The usage of natural stones in architecture gives the

appearance of traditional artistic value and the representation of status. Natural

stones top all other building materials for its durability, timeless beauty and

ecological rating. The durability and the aesthetic effect givem by the natural

stones cannot be surpassed or replaced by any other raw material. This fact has

been widely approved by Engineers and Architects.

12000- 15000

Recent years have given rise to enonnous popularity for stones as building

materials. Usage of natural stones is found ranging from residential,

administrative, Sacral and also public buildings. Most airport projects in recent

years have used granites as the flooring material.

Source : Administrative Report : Dept of Mines & Geology, Government of ~arnataka, Bangalore.

The natural stone industry has grown about 30 percent over 1990 in value terms. Both in the home and also the international h n t , new suppliers keep

entering the market and this make the competition stiff.

New entrantar are m m g e d by the increasing demand in the constnmion

sector. The profit maximum ir low due to low price and this keabns the

industry. Certainly, the aport scene is opening up h h perspective for the natwal stone industry.

1) China - The Serious Contender :

Chim, the country with vast resources is a serious factor to compete other

industries in any sector and stone industry is no exception. Its presence has

given rise to the trend of lower prices. Thm floats a suspicion that they practice

dumping. Market share of China in the international trade in granite is

increasing steadily in the recent years. Yet now, China is almost absent in the

slab segment. If Chinese extends their trade to slab segment it will really be a

threat to other countries.

2) China is to abolish import duties - Sales of finished products to Chtna

can treble :

China import semi-finished products. So there will be definite rise in the

export figures and hence higher revenues. Export to this biggest Asian market

duty-free, would definitely be an advantage Export-Oriented Units factor to

Indian exporters.

3) Import and export of natural stone in China - Increadng trade :

The quantity of natural stone imported by china increased by factor of

1.43. The most populw kinds of natural stones for import am marble in mu&

Or slab form and mu@ m i t e . This means turnover has more than doubled in

~ W Y tams, with the quantity of natural stone exported increasing by a fmtor

New entrants are encouraged by the increasing demand in the consfruction

sector. The profit maximum is low due to low price and this threatens the

industry. Certainly, the export scene is opening up fresh perspective for the

natural stone industry.

1) China - The Serious Contender :

China, the country with vast resources is s serious factor to compete other

industries in any sector and stone industry is no exception. Its presence has

given rise to the trend of lower prices. There floats a suspicion that they practice

dumping. Market share of China in the international trade in granite is

increasing steadily in the recent years. Yet now, China is almost absent in the

slab segment. If Chinese extends their trade to slab segment it will really be a

threat to other countries.

2) China is to abolish import duties - Sales of finished products to China

can treble :

China import semi-finished products. So there will be definite rise in the

export figures and hence higher revenues. Export to this biggest Asian market

duty-free, would definitely be an advantage Export-Oriented Units factor to

Indian exporters.

3) Import and export of natural stone in China - Increasing trade :

The quantity of natural stone imported by china increased by factor of

1.43. The most popular kinds of natural stones for import are marble in mu@

or slab form and rough granite. This means turnover has more than doubled in

money terns, with the quantity of natural stone exported increasing by a factor

of 1.44. China export8 natural stone to 126 countries and regions throughout the

world.

4) The Emergence of Spain :

Emergence of Spain is evident in the international market in the past ten

years. Spanish industries invest gcnsrously in the inhtructure and

Machineries that boost their production capabilities to a greater extent. They

have an increased local demand and they export only 25% of their total

production every year. There was an increase in production capacity of 205 in

the last year. Spain's prominence in the international markets often came at the

cost o f Italian and Portuguese companies.

5) Increasing Difficulties In Obtaining Payment Guarantees :

The days of risk h e exports in the terms of payments are over.

Nowadays, the letter of credit has disappeared in the US and even Germany has

turned to falsie its tnrstworthiness. The option of exporting is more risky than

ever.

6) Attention Exporterr :

In the wake of China being a major contender and the emergence of

Spain into the world market becoming more evident. India should seek newer

markets and strengthen the foundation of existing exports worldwide. The

problem for the natural stone within the nation is fi-ee allowance if the situation

persists many persons would be reluctant to invest in this industry. The top ten

Importers of Granite, Natural Stone products from lndia were China, USA, Italy,

Hang Kon~, Taiwan, Gemany UK, Spain, Netherlands and Belgium.

CAPEXIL has argued regarding a proposal with Ministry of Commerce

and Industry for setting up a Minerals Upgradation Fund with corpus of Rs.

5,000 Cmres. This fund would be wed for lending soft loan to the mineral

sector for technology uppadation and modernization.

7) Production ,& Exports :

To State 'India is the home land of stones' is no asserting. With a vast

stretch of resources along the length and breadth of its land, it occupies a key

position among the countries that produce and export natural stones. The gifted

resources are aptly used for the economic development of the nation.

8) Production Scenario :

India is the largest producer of stones in the world accounting for over 30

percent of the world stone production (Table 2.14). The Indian stone industry

has been growing steadily at an annual rate of around 10 percent per year for the

past few years.

Table 2.14 : Production & Exports

INDIAN STONE PR 1 1991- 1 1992- 1 1993-

Marble

I I 1 Slate 13 I s 14

Granite Sandstone

Flaggy Limestone

- 1 I I Total 1 7989 1 10753 f 10509

92 1966

I I I Source : Indian Beauro of Mines.

989

441 1

620

thousa 1996- 97 3712

93 2244

~d tonnes) 1997- 1 1998- 1 1999-

94 2086

3073 4435

996

3618 3978

823

Productlon & Exportr

Indian Stone Production

Production & Exports

9) Current trendr in Industry :

While production in the granite industry has increased dramtically in the

1st decade, the decline in prices has also been impressive. Not all the decline

can be attributed only to reduced cost as result of technological impravement.

Gross margins have come sharply down, and unless a production unit is

extre~nely effincnt or the material being worked with is highly exclusive, the

chances of making atiy profit at all are slow.

10) Export Scenario :

Since India has natural stones reserves in abundance, undoubtedly, it had

attained a key position among the countries which export natural stones.

Export of Indian natural stones during 2000-01 to 2004-05

India is a major exported processed natural stones around the globe. It was peak

in 2000-01 and faced a setbacks and now gaining momentum in its exports

conditions in 2004-05.

Item wise exports of natural stones and Granites products are the leading

products to get exported from India in both 2002-03 and 2004-05.

11) World Stone Industry :

Historical outline and types of Import - Export quantity in 1000 tonnes :

The graph depicts the imports and exports of raw materials and also the

processed stones, that is the finished products

~ o p importing Countries of granite and product during 2004-05:

The top importer of granite products during 2004 - 2005 was USA

followed by china and Italy. It is evident h m the graph that many world

nations import Indian goods and Indian export market is well established.

The Major slate exporting Countries of the world :

The country which exports slates is mainly Spain followed by Brazil and China.

Here, India occupies the fourth position among nations that export slate stones.

The Major slate importing countries of the world :

France imports maximum of Slate mang the countries that go for slate

import, UK and USA occupy in second and third positions respectively.

12) Emerging New Market :

Emergence of India as one of the leading producers of Natural stones, for

her to venture in new markets in which hitherto there hasn't been any inroad by

the very industry. Certain markets prove to be very promising, in the context of

importing Indian made goods. This exploration needs to be enhanced also due

to the stiff competitions From other foreign nations.

New markets for India are North Africa, Middle East, Kazakistan,

Uzbekistan, SAARC countries and Vietnam. Indian products are most of these

nations are already importing natural stones from India but the market still needs

to mature. There have been initiatives to open borders between S M C

countries which would definitely give a much needed boost to Indian exports to

those countries.

13) Investment Opportunities :

1. ~ndustrial policy of the State and Central Government are quite investor friendly encouraging new entrepreneurs into the field.

2. ~atural stone industry is the promising and upcoming industry and so it is

to invest.

3. Liberalization of Foreign Exchange norms enables overseas long-term

funding for ventures and projects at international interest rates.

4. initiative has been taken to open the borders between SAARC countries

which will give an immense boost to the industry.

5. Mineral Conservation Act has incorporated important changes for the benefit

of granite industries assuring scientific and planned growth for a long period of

20 to 40 years.

6. Long-term quany leases are now possible extending from 20 to 30 years with

assured renewals.

7. Prospecting licenses are issued for two years for exploration and

marketability,

8. Areas of about SO hectares are taken under the cover of lease.