posted on 05/12/2001: 612 views
Demand for marble and granite products has been growing at considerable pace of about 6 per cent per annum, in the last five years (1995-99), according to a new study on the marble and granite sector in the UAE by the Journal of the Emirates Industrial Bank (EIB). "One of the spin-offs of the economic activity in the huge construction industry sector in the UAE, is a very large marble and granite business, which lends itself mostly to trading but also to manufacturing activity in a minor way (cutting, finishing and polishing).
The industry has grown at a steady pace along with the expansion of the construction activity. Marble and granite is exclusively used in construction, almost entirely as flooring material (though sometimes also for wall panelling),” the EIB study said.
The study observed that growth is slightly higher for unfinished/crude material, indicating a slight increase in cutting/processing activity. "Imports have equally increased in value terms, but have grown at smaller rate than growth by volume, averaging mere 2.7 per cent in the last four years, against an average 5.6 per cent rise in volume. This confirms industry sources suggestion that there has been an increase in import of low grade marble in recent years,” the study noted.
On the outlook for the sector, the study said: "Despite reservations by several analysts, the construction industry has continued to expand. As long as the national and expatriate population increases, there will be fresh demand for civil works in virtually all spheres. Construction activity is currently characterised by the development of large-scale projects (office/residential towers, industrial parks, shopping malls and so on), which seem to favour marble and granite against cheaper alternatives.
Construction grew steadily in the last ten years, and there was a period of rapid growth during 1995 to 1998 for construction activity, nevertheless it now seems to have stabilised around Dh 15 billion per annum in recent years, and expected to remain so in the near future.” Climatically, stone floorings are more suitable to the U.A.E. than textile carpeting. The least expensive flooring option beyond ordinary cement floors, are mosaic tiles and ceramic tiles, in that order.
Marble and granite are the most expensive flooring options and cost considerably more, but have grown in popularity in recent years. Because of rising living standards, affluence and consumer demand, demand for mosaic tiles have declined very strongly, and given way to ceramic tiles and natural stone flooring, despite the enormous price differences, the study said.
Demand is almost entire met through imports. Both are available for import in (1) a primary form of uncut blocks, i.e. large pieces of the rock, (2) slabs, which are "sheets" cut from blocks and their one surface polished for final use, and (3) finished tiles, namely slabs cut to required sizes. Import in blocks is very small since cutting it into slabs and size specific tiles leads to wastage of up to 25 per cent, which translates into significant cargo costs and can be saved if the stones are processed in the exporting country.
Consequently, imports in blocks and slabs account for only about 12 per cent of total imports. Total imports of marble and granite in 1999 was to the tune of Dh325.4 million, re-exports totalled Dh8.1 million and net imports (demand) was Dh317.3 million, the study said.
There are about 7-8 major exporters of marble and granite to UAE. Italy and India are the leading sources. Italy has a very large array of high quality marbles but not of granite, which is mostly grey-coloured. India is a major supplier of granite, the other suppliers being Italy, Spain and China. Cheaper sources have emerged in recent times offering slightly lower quality marble. China deserves particular mention as it has been recently gaining a market share particularly for low-cost marbles. Prices are not only influenced by grade and quality, but also by labour costs in the exporting country. Consequently prices are much lower for products from Asian countries (China, India, Iran) than from the European countries (Italy and Spain).
The EIB study noted that almost the entire imports are for domestic consumption and re-exports are rather small. Granite re-exports are virtually negligible. Marble re-exports are slightly more, but still account for only about 3 per cent of imports. Re-export trade is mostly for finished tiles, and is worth about Dh8 million dirhams annually.
There are several establishments' factories in UAE supplying finished marble and granite to the construction industry, the study said. "These fall into two categories. Firstly, primary production, which produces, slabs or tiles from blocks. There are very few establishments for primary activity, only three in the country. However, these tend to be larger units compared to secondary production units. Two of these are located in free zones (one each in the Jebel Ali Free Zone and the Sharjah Airport Free Zone), and one in Ras Al Khaimah.”
The larger activity is in cutting/processing of marble and granite. Some of the units engaged in this are mere workshops. Their activity is confined to converting slabs into specific marble/granite tiles, and polishes them if necessary. Such activity dominates in UAE, and there are more than 40 such establishments. The majorities of these are located in Dubai and Sharjah, and employ low (semi) skilled labour from the sub-continent. (The Emirates News Agency, WAM)
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