Looking through the list of active quarries I noticed Basket Range Sandstone Products, a new listing and a name I was not familiar with – I decided to give them a call to discuss ASAA membership and find out more about the quarry which I assumed was a new venture. Owner Alan Hackett was delighted to talk about his business, but he took me totally by surprise when he explained that while he was the new operator, the quarry was actually 102 years old!
As you might expect Alan is extremely enthusiastic about his business and plans that he and his business partner are developing.
“Our sandstone is well known and highly regarded locally, we intend to develop the business and advance our reputation so that more people are aware of what we do. We have a couple of interesting projects on the drawing board, and we are expanding while the building industry in general appears to be contracting. We have just been commissioned to build a substantial new property and we recently employed 4 additional staff.”
Like a lot of quarry operators Alan wants to avoid waste, “We want to reach a point where virtually everything we handle is profitable, recycling is high on our list of priorities.”
I was surprised to discover a quarry which had basically flown under our radar and had been in operation for 100 years. It made me wonder how many other quarries exist largely to service their local community, producing viable volumes of stone used for residential construction, dry stone walling and other purposes. Is the figure of 90 operating quarries an accurate total of the number of players in the market?
ASAA director Jim Mann said, “There are certainly a number of quarries that do not appear in the Discovering Stone Buyer’s Guide, I know of a couple of operators here in South Australia that quarry stone on farms. Most of it gets sold to local builders and property owners. In Queensland operators are producing half a dozen different types of marble which hardly see the light of day in Australia, as virtually everything they produce as raw blocks is exported to China.”
While these incidences are relatively rare it begs the question; how large is the industry in Australia, how much stone do we produce and how much do we actually export?
Most businesses like to look ahead and contemplate where they will be in 5 years from now. We asked a few well informed individuals involved in different elements of industry about relevant issues.
How is the sector Performing?
In issue 19 of Discovering Stone ‘Australian Imports of Stone’ Peter Halliday reported that analysis of Australian Bureau of Statistics reports revealed that total imports were valued at AUD $187.6 million in 2009-2010.
Five years ago imports for 2004/2005 were AUD $145 million. In spite of a slowdown in construction related to the effects of the Global Financial Crisis and a resultant loss of confidence imports have risen by AUD $42 million over the last five years; an increase of almost 29 per cent and in spite of the slowdown in the economy and the damage caused in Queensland by the floods more quarries are opening and the number of companies importing stone continues to rise. As the product becomes more affordable and more widely available from specialist suppliers and increasing numbers of tile retailers in all states and territories, consumption increases.
A similar increase over the next five years will see imports rise to around AUD $240 million. Yet there are concerns on the horizon. JH Wagner & Sons of Toowoomba in Queensland are one of a small number of companies that have been in operation for more than 100 years. JH Wagner quarry sandstone, import, process and install all kinds of natural stone. Director Michael Wagner said, “The difficulties facing stone producers in Australia attempting to market product on a national basis in preference to a regional one are amply highlighted by the cost a company faces in transporting stone by road. For example to transport a 21.5 ton container of Australian granite from Western Australian to Toowoomba, costs $300 per ton, or the best part of $6,500. A 21.5 ton container of granite shipped from China to Brisbane costs less than a $1000, plus $1000 to transport it from Brisbane to Toowoomba.”
Michael continued, “Industry is hurting and local producers will struggle until the dollar gets down to 75 or 80 cents again. I can honestly say that 2 to 3 weeks ago it was probably the quietest I have known it in my 33 years in the family business. We are comfortable with a few weeks work in the pipeline and more on the horizon, but a big job nowadays is not that big a job. Some companies fear what lies ahead so when they get a decent contract they try to stretch it out instead of actively getting the job done while aggressively pursuing new work. We are always quoting new work, often the same job over and over as developers try to get the best price possible.”
“Yet overall I remain optimistic about the prospects for Australian natural stone, there will always be a place for it. I ask some customers are you prepared to pay the price for Australian stone, processed in Australia by Australian workers? Fortunately enough people continue to say yes.”
“My biggest concern is that the mining industry will be placed on a higher pedestal than it already is and that other manufacturing industries will pay the price. Right now it’s just about the only sector the government is focused on to the possible detriment of other industries.”
Neil Freeland the managing director of Gosford Quarries shares Michael Wagner’s optimism. Neil said “Gosford Quarries are seeing a trend back to natural stone. People are looking for enduring quality, beauty and the timelessness of natural products. An increasing number of environmentally sensitive consumers, architects and designers realise that some natural stone has a much lower carbon foot print than factory man made and processed engineered products. With increasing property prices, better materials are being used to enhance both residential and commercial developments. Whilst a strong Australian dollar has made imported stone attractive, local producers are finding ways of competing with quality, service and continuity of supply that can’t always be achieved from foreign sources. In fact, overseas markets also value these features, leading to good export volumes of quality Australian stone. Gosford Quarries has in fact recently invested in state of the art equipment to produce higher quality products, with the flexibility to enhance our product range and improve turnaround times for orders, yielding better customer service levels.”
Neil recognises the current lack of activity in the construction sector but remains confident that better days lie ahead, “At the moment the softness in the building, construction and renovation market segments is affecting demand for all building materials, including stone. Local producers and importers alike are all reporting a slowing in demand. This said, we are not seeing any significant change in market share heading off shore, which indicates consumers are delaying their decision to purchase, rather than substituting quality for price. This trend will continue until the economy and consumer confidence is restored, we think now late 2012 or 2013. Most Australian stone producers will be well placed to take advantage of the inevitable upturn, as the past couple of years of a slow economy has forced many operators to drive down costs, and strive for improved efficiencies. The smart ones have invested in better equipment, technology and more market focused products.”
In my role as CEO of the Australian Stone Advisory Association a number of the calls I receive relate to projects which have been completed using the wrong stone, adhesive or sealer. Some of these problems could have been avoided if the end user had conducted adequate research in advance, others would not have arisen if the supplier or installer had taken more time and care to ensure that the end user was fully aware of possible pitfalls related to use of the chosen product in a particular environment. It’s abundantly clear that education is the key. Richard Mackenzie the principal of Ocean & Merchant said “The strengths of the carpet and timber industries in Australia relate to consumer awareness. People understand the difference between wool and acrylic, they recognise the difference between hardwood and laminate but how many consumers understand the difference between limestone and marble. The way forward for industry is better education which has to be widely available to suppliers, installers and purchasers, only then will we avoid the mistakes that are made.”
While it is difficult to argue with Richard’s observation the variances in natural stone products can be considerable, an imported bluestone might look like local product but the matrix of the stone may be considerably different and as a result staining or warping may occur. Nevertheless the onus is still very much on the local supplier to understand and communicate these variances to his customers. ASAA director Jim Mann commented, “The high Australian dollar has made imported stone more affordable and is now being used more widely in both residential and commercial applications. The flood of new products onto the market has brought many new materials that do not have a history of use or any data that can be used to confirm their suitability. It is important for the whole industry that importers remain knowledgeable about the properties and limitations of the stone products they sell.”
The importance of gaining environmental accreditation for natural stone cannot be overlooked. Advice received recently from Good Environmental Choice Australia (GECA) confirming that they are holding discussions with the Green Building Council of Australia (GBCA) regarding recognition of GECA’s Hard Surfacing Standard #40 which was initially inspired by ASAA in 2008 is encouraging. While many within the sector have reservations about the importance of this issue and do not consider it significant in the day to day running of their business, no one knows how many orders are being lost to competitive floor and wall surface finishes that have gained an Ecolabel.
Michael Wagner made the point about the hefty cost of transporting stone from A to B in Australia. Transportation costs are one of the reasons why stone producers find it difficult to market their product nationally. Ironically the fact that we have around 90 quarries operating around Australia may provide incentives for specifiers to choose a local bluestone, granite or sandstone that has achieved an Ecolabel over an imported product that has to be transported to site from China or further afield. Richard Mackenzie said, “Specifiers will find it hard to substitute an imported product for a local stone that has the required environmental credentials.”
Of course purists realise that the biggest competition to natural stone as bench and vanity top product is engineered stone. Advice received from Breton Australia about the imminent availability of machinery which will produce 6mm low-thickness engineered stone and confirmation from Caesar Stone that they are strongly considering adoption of this technology, coupled with the launch of a number of novel low-thickness natural stone products adds a new dimension to the market.
James Woodyatt the joint Managing Director of CDK Stone said, “We expect the growth in market share for stone benchtops will continue, mostly at the expense of laminates. Engineered stone obviously commands the greatest portion of the total stone sector, but natural stone is certainly benefitting from the overall awareness and desire for stone in the home. There are several products waiting in the wings to challenge the existing stone products in the coming years. Some of these can be processed by existing stone factories while others would require new facilities to be established. We also expect the importation of finished benchtops will increase as technology is making it easier to prepare and send CAD drawings to manufacturers. We believe that the growth in themarket will be sufficient to accommodate these new challengers and Chinese imports as well as drive growth in local production. It is important that the local manufacturers keep up to date with the latest developments in technology to increase efficiency and keep production costs at a competitive level.”
In conclusion
When new materials and products are launched there are always problems to overcome. Low-thickness stone will inevitably find its place in the pantheon of stone products. Natural stone has been employed as a construction material for thousands of years but as new materials emerge and new problems arise solutions have to be found. No man made product can ever mimic the true beauty of natural stone. The world’s leading producers of ceramic tile armed with advanced High Definition Inkjet printing technology are making their best efforts to emulate stone but it’s a thankless task.
Still the stone industry cannot rest on its laurels, the need for education regarding correct material selection, installation and maintenance is vitally important, given that many of the available competitive products are less expensive, hard wearing and easier to maintain. Proving stone’s sustainability credentials and teaching end users about the materials characteristics are essentials. The gradual acceptance of Australian stone in overseas markets is an encouraging development. Gosford Quarries, Capricorn Sandstone, Melocco Stone, Australasian Granite and a number of other companies export material. Our last report on exports confirmed that we exported stone valued at AUD $9 million. In the next edition we will report on the latest figures and interview representatives of some of the companies that are achieving success in overseas markets. ASAA director Colin Cass the principal of Techtile Consulting neatly summarised the outlook for the industry in the following remarks which contain a word of warning.
“The future for natural stone looks bright. More countries are producing and processing stone, the range is ever widening and sales are increasing. In many cases the price of stone is also falling. People are voting with their feet and their wallets and selecting stone for an ever increasing number of applications.”
“Stone has environmental advantages over almost all other hard floor
coverings. This is because once stone is installed it usually remains in service for decades and it requires little maintenance. This is borne out by the statistics contained in a report conducted in the United States by cost consulting firm Scharf-Godfrey which shows stone as the second greenest flooring product after ceramic tiles over a 25 year life-span. It beats timber, vinyl, polished concrete, carpet, just about everything.”
“But there’s the rub! To achieve this green credential, stone needs to remain in place for at least a couple of decades. This is usually no problem as stone floors are often in use for the best part of a century or more. They often last the life of the building.”
“However, if the stone selected and laid is not suited for the particular installation, and it does not perform as could be reasonably expected, it may have to be replaced early. If this occurs the environmental advantage is lost (as well as any financial advantage). So it is important that the stone is carefully matched to its intended location and use, and that it is properly maintained. This way its benefits are maximised.”
“Sellers of stone have an obligation to know about the performance characteristics of the products they sell.”
“It will be a successful future for stone, but there will be painful incidents in that future. Sellers of stone will only be able to avoid these problems if they know their products. Giving frank and fearless advice to consumers based on sound product and industry knowledge is the challenge faced by the industry.”
“The right stone in the right place will lead to customer satisfaction, if it is not fit for purpose you will be in trouble. Sales staff need to be able to ask the right questions and supply the right answers if problems are to be minimised.”
