Chinese suppliers overtake region’s market
When Nashua builder John Stabile needed granite countertops for a 52-unit condominium project in Manchester, he got them from Brazil by way of China.
“We’re able to buy the granite, cut to specification from China, and have it shipped over here for less than I can buy Formica here,” Stabile said. “The labor costs are a lot less to deal with in China.”
Stabile bought the granite product through American Intech, a Chinese-owned company in Salt Lake City, Utah. “It’s a lot cheaper to do it that way,” said Erin King, an American Intech sales representative.
The company sells granite quarried in Brazil, India and other parts of the world as well as in China. “We just do the counters from the mill work drawings of the architect, the savings to the contractor are significant,” she said. “We can get the material for $5 a square foot. Domestically, it’s up to like $39 a square foot.”
While bidding for the opportunity to provide the granite fixtures for a six-story residential complex of more than 250 units in Massachusetts, Rumford Stone in Concord solicited bids from companies based in India and China to provide it with the finished products to install.
“There’s absolutely no way we can compete with the Chinese in fabricating,” said Rumford owner Tom Tento. “The quality is not as good, but you get what you pay for. The wages are such that they can sell a manufactured product completely finished cheaper than we can buy raw stone from the jobbers in this area.”
Retail sellers of Granite products also are selling more stone products from Asia as consumers opt for the variety of colors and lower prices.
“The Chinese manufacturing plants are just taking over the granite market,” said Sarah Ann Perry of Perry Brothers Monument Company in Concord. The company sells gravestones, primarily those made of gray stone from Vermont.
Ironically, the Granite State does not have the quality of granite needed for durable and attractive monuments, Perry said.
“I don’t use any New Hampshire granite,” she said. “It’s weather-porous and has a brown iron stain on it.”
About 30 percent of what she sells comes from overseas, she said. “A lot of it is coming from India, Africa, Sweden. Brazil has some nice colors in granite. The China granite has beautiful exotic and deep colors that we don’t have. And their labor force is so inexpensive that our biggest cost is the shipping. We buy blocks of granite that come over cut and polished. That eliminates the manufacturing plants that do all the cutting and sawing in Vermont.”
Many of the Vermont plants have, in fact, been eliminated, said Jeff Martell, past president of the Barre Granite Association. Competition from Third World countries is not the only reason, he said, but it has been a major factor in the loss of more than half the granite manufacturers in the region.
“Over the last 15 years, we’ve lost 27 manufacturers,” he said, “and three of them were among the largest.” The 25 remaining are under intense pressure to keep prices down and still make a profit Martell said.
“Our guys are getting between 17 and 20 bucks an hour,” he said of the granite workers. “The benefits cost on top of that is another $8.50 to $9 an hour.” Wages for comparable work in China are “on the order of about 60 cents an hour,” Martell said. And the Chinese companies are not subject to the environmental laws that add to cost of manufacturing in the United States, he said. The lower labor and operating costs gives them a “distinct competitive advantage” in pricing, Martell said. “It’s pretty hard for us to justify charging two and a half to three times what they’re getting for the same product.”
And quality is not the issue it was 10-15 years ago, he said.
“The Chinese really came on the scene in the mid-‘90s, and for the first year or two, they struggled. The quality of product wasn’t up to the standards the public and retail dealers require. They certainly made changes and can do anything now with a high degree of accuracy and quality.”
While imports have gained a large share of the market for granite products, the growing acceptance of cremation as an alternative to burial has also put a dent in the monument business. “Just to break even these days is a challenge on our end,” Martell said
Kurt Swenson, on the other hand, sees trade with China as a two-way street. Swenson, chairman of the board of the family-owned granite quarry and manufacturing plant in Concord, also is chairman and CEO of Rock of Ages, a company purchased by the Swensons several years ago and now a public corporation.
Rock of Ages has been selling Bethel White granite from Vermont and Salisbury Pink granite from its quarries in North Carolina to China, which lacks those colors in its domestic granite, Swenson said. His Chinese customers use the granite blocks for construction of everything from hotels and office buildings to airport terminals, Swenson said.
“It’s the biggest buyer of dimension stone in the world, having just passed Italy for that title,” Swenson said of the Chinese market. China and India together have perhaps as much as 20 percent of the U.S. market for granite products, Swenson said, including gravestones.
“What we began to do on the manufacturing side was to focus our effort in high-end, very big estate units, really big elaborate memorials and private mausoleums,” said Swenson. “Those are tougher products for the Chinese to make, because of the required lead times. And we provide a perpetual guarantee, which is important to people when they’re making a significant investment.”
Brett Frazer of Twin State Monument in Lebanon said he gets most of his granite from wholesalers in Canada who buy it from all over the world. But the black granite is getting increasingly hard to come by because of the growing Chinese presence in world markets, he said.
“They’re buying up all the black granite before anyone else can. It’s getting very scarce,” he said.
In addition to monuments, Frazer’s company supplies granite countertops for residential construction and a small amount for hotel buildings. But for the larger jobs, the competition from Chinese companies has him priced out of the market, he said. “They’re doing the job so cheap that we can’t possibly compete,” said Frazer.
Paul DiMatteo views the granite industry with a dual perspective. As president of Monument Builders of North America, he is concerned about the effect the imports are having on domestic fabricators.
“It’s absolutely killing the manufacturers in the U.S. and Canada,” he said. “I know one Chinese manufacturer is selling four benches for $599 — sawed, polished, shipped over here from China. You couldn’t manufacture it here for that price.”
But as the owner of a retail monument business in Maine, he knows how price-conscious customers are.
“On the flip side, it’s a bonus for the consumer to be able to get the monuments for less,” he said.
DiMatteo began selling the Chinese products two years ago, and they now make up about 15 percent of his business. “I don’t know many retailers that don’t sell it, because you have to compete,” he said. “I wanted to stay loyal to domestic manufacturers if I could, but just couldn’t compete anymore if I didn’t do it.”
But while he stocks and sells the imported finished products, he’s not exactly pushing them.
“I try to sell something else, but if the customer comes in and says, ‘I just want the cheapest-price item I can get,’ they’re going to get Chinese. There’s nothing cheaper in price than Chinese granite.”