Chinese Stones: A Huge and Steady Industry
China is the biggest stone producer in the world. On top of that, China is one of the world’s biggest stone exporters. To illustrate: the total transaction value of stone imports and exports in 2012 reached an amount of more than 8 billion USD and includes an export value of more than 500 million USD (stone-product.com). This blog, describes the basics of the Chinese stone industry, and the ways in which foreign industries invest in these stones.
Main Industry Areas
China’s main focus concerning the stone export industry is processing raw stone materials into products with decorative functions (garden pavement, gravestones, granite counter tops, etc.). Examples of materials commonly used are granite, marble, slate, and sandstone. These stones have either local roots, or are imported from countries like Brazil, India and Turkey. Currently, China exports to more than 130 countries.
Industry Location and Types of Companies
Most of the Quarries and factories are concentrated in Fujian and Shandong. Fujian focuses primarily on the processing of natural stone. The province covers around 70 % of the natural stone industry in China. Shandon, in addition, is growing drastically as a stone producer and processor. Its natural harbors, logistic possibilities and solid industry basis have caused a rapid grow and ensure an even more dominant role in the future. Furthermore, most of the Chinese stone export goes via the harbor of Xiamen.
There are over 5000 quarries and over 10.000 factories to be found in China, and the companies come in all shapes and sizes. Some of the factory halls are equipped with the finest machinery. Others are small, open-air workshops with relatively low-standard cutting machines, and self-employed individuals. Quality standards as well as safety- and environmental standards vary highly as well, causing the need for Western importers to choose their Chinese producers/processors carefully.
Complexity of import/export
Dealing with the Chinese stone industry can be complicated for foreign investors. For example, many processors source their raw materials from other quarries. Also, they often outsource part of the production process. This makes quality control from a distance complicated and sometimes merely impossible. Therefore, a large majority of orders are handled by trading agencies and agents that provide a connection between the buyer and the supplier. When sourcing in this way, the production process, quality control/assurance, ethical management and logistic activities can be arranged by the sourcing agent.
In conclusion, the Chinese stone market is huge and will remain so. Although the financial crisis has decreased the demand by foreign markets, the huge domestic market ensures a steady position of the industry. Furthermore, a province like Shandong keeps on improving its logistics, technology, and supply chains. The seemingly endless resources in China combined with the huge domestic market, ensure a sustainable dominant position of stone production/processing.