What happened in 2007 in Italy as far as the stone sector is concerned? The consequences and climate
of the international financial and economic crisis in some countries were felt in Italy too, but to what
extent?
We have already briefly mentioned a few things about the general trends in the Italian stone sector in
2007, thereby anticipating some of the replies to the above questions. It could not really be any different
as Italy is fully entwined in the trends and events that have characterised the year, both inside and
outside the natural stone sector. However, it is worth going into more detail about certain aspects since
these are the seeds of what has already occurred in the first part of 2008 and is obviously continuing
now.
In 2007 Italy showed some positive aspects, at least in the first half of the year, and especially as regards
foreign markets where it managed to maintain its high profile position for almost all materials and types
of product. The second half of the year was, however, not so bright and in the beginning of 2008 there
was definitely apprehension, especially in certain market areas and for certain specialised supplies and
work. As for the home market, this remained unclear as in the previous year and uncertainty grew as
the months went by. It gradually became clear that the real estate market’s buoyant trend over recent
years had come to an end and that it was beginning to become fragmented into niches, which are still
interesting segments but increasingly difficult and uncertain.
In terms of quarry production, this remained by and large stable in most regions, although some of
these did record drops in production such as Sardinia that has been particularly hit by competition
from foreign granites for some years now and with its own materials mostly used on the home market
and to renovate historical centres and local landscapes. Or, as in the case of the Valle d’Aosta, whose
small but quality quarries are finding it increasingly difficult to remain profitable enough considering
the complex quarrying techniques used and the potential of the material which is beautiful but plagued
by other marbles of a similar colour. In this context, Carrara White is in a way emblematic of the
overall condition: average-high and high quality materials and blocks have no problems in finding a
market, yet the overall production made up of different materials and different and numerous yields
does not always find the best markets. Moreover, although it has a very high percentage of first quality
materials compared to the average of other production basins, the need to have unsquared and second
quality products is often in conflict with the general interests of the quarrying area. The growth of
raw materials exports, in national and local (Carrara) terms shows the risk Carrara runs of suddenly
changing to being more of a mining area than in the past and the risk Italy runs of reverting back to
being a high profile niche producer for finished products and a mass producer of raw materials, although
still remaining a very expert and technically specialised industry, especially in terms of adding value
to the raw materials.
In 2007 Italian exports of natural stone materials and products did not record any increases on 2006 as
regards the higher quality goods. The final statistics are fairly complicated, taking into consideration
all the items in the table, both separately and all together. However, the figures not only confirm the
positive trend in 2006 but actually show an improvement on it, albeit sometimes in a contradictory
way as in the case of granite and more often in a decidedly positive way as in the case of marble and
travertine, as regards both the raw materials and the finished products.
The first sub-total is the one that really truly represents Italian exports of stone, leaving pumice and slate
as a significant addition in terms of added value yet one which is unfortunately losing ground year after
year both in terms of market share and competitiveness.
First let’s concentrate on the figures in the first few lines, the core of the national stone industry. These
figures show a clear tendency to maintain a high level of return, especially for marble and travertine
which are taken as one in the statistics and keep their leading role for the entire sector. Blocks and raw
slabs and finished products, including polished slabs, recorded substantial growth in 2007 and this is
confirmed by the statistics produced by the various partner countries, both European and non, both
traditional and new or almost new. These figures are available on our internet site and give the overview
of the major countries operating as producers, consumers or processors. This result still holds despite
the difficulties imposed by the euro. There are even some increases in the average value per unit of
product exported and above all there is innovation in terms of the geographical position of the markets:
nothing extraordinary or revolutionary but a slow, constant process that has been underway for a few
years now, a hard process but one which has been carried forward in a concrete, resolute way through
the search for new contacts, new partners and new specialised areas of supply.
Concentrating on the data for the first sub-total, the division of Italian exports by macro geographical
regions is as follows.
Already on this initial reading, without even going into detail about the individual countries and
markets, one thing is clear. That is the gradual drift towards the integration of traditional partnerships
with the more recent players, with different consumers and niches, some of which have been reinstated
after periods of relative abandon and decline, others on the other hand which have developed recently.
We can give two good examples for the two situations. The first, which is fairly representative in
this sense, is Switzerland. For years Switzerland had been an excellent buyer of Italian materials and
products, both Italian in origin and just processed in Italy, then after a long period of calm it has
recently been revitalised. Recovery actually began in 2005 and now it looks as if the country has
regained its traditional profile as a good importer both in terms of quality and quantity, naturally with
its own preferences and trends. Independently of particular situations and specific supplies the trend
underway for the previous couple of years was confirmed in 2007 following the general preferences for
Italian products. The fact that there is a wide gap between volume and value comes as no surprise but
it is difficult to say what role the euro played against the Swiss Franc and to what extent competition
from much more “economical” suppliers imposed more moderate prices than in the past for certain
products.
Another emblematic country in terms of Italy’s European stone industry partners outside the EU is
Russia. Russia better represents the more recent markets even though it is not totally new. The process
began a little earlier in Russia than in Switzerland and for all types of products although finished marble
products are definitely a separate case. The performance of the latter was already clear in 2006 with a
few particularly high value and specialized supplies and was then confirmed in 2007 with the results
shown in the table below.
In just a short time Russia has become not only a stable partner in terms of value, but also one that is
growing year after year, even though it is not yet on a par with the major consumers. It is still an elitist
consumer market but maybe this is exactly why it is a particularly valuable and sought-after market.
Taken together the various factors point to a general picture of Italian exports divided into macro
geographical regions that is gradually changing compared to previous years as we have tried to show in
the table below regarding 2007. The same figures in Table 3, read in a percentage division rather than
in percentage changes, show a close-up view of the small changes, including the differences between
value and volume.
The decreasing importance of the European Union – albeit modest and compensated for by the other
European countries and North America, which also includes Canada that is often undervalued, is
accompanied by the increasing importance of Africa, especially North Africa, and to some extent the
Far East too, although here value did not follow in the steps of volume. In terms of value the scenario
remained more static with the only exception of the European countries outside the EU. Again, it is
difficult to define what role the Euro played in this case too, although the following table may help to
understand since it shows the individual countries that showed interesting and significant growth in the
overall picture of the continent. In this case we have considered the total Italian exports to the individual
markets for all types of products, including slates and chips, listing first the countries that show negative
figures both in volume and value, then the countries with diverging situations between the two trend
indicators and finally the countries with positive figures in everything, obviously limiting the countries
to those with significant figures.
There is a range of different situations: some where both volume and volume decreased as in the case
of the two large, important markets for Italian products, Germany and Spain; others where the situation
is more complicated and it is above all the average value of the products exported that increased; still
others where the results of the year’s exports are more complicated than in the previous year and not
always positive, despite the fact that the percentage differences increased for both indicators. Let’s look
in particular at Turkey, whose volumes increased significantly more than its values and is therefore
worth special attention. In this case, it is above all marble finished products which influenced the final
results, which is also the most important product type.
The following tables show the other geographical regions and the importance of a few players over
recent years, both in the Mediterranean basin and in the more distant regions (leaving out the Americas
for now) in the overall picture of the national industry. The tables highlight above all the dynamics of
the changes and the new elements in the last year.
The positive contribution to Italian exports from the growth of North Africa totalled more than 21
million euros more than 2006, concentrated in five countries where, with the sole exception of Algeria,
the product quality increased rapidly and significantly too.
The situation in the Middle East is more complex. Here the number of countries recording positive
contributions to Italy’s industry was more limited and furthermore the two most negative situations
highlighted in red at the beginning of Table 10 weighed heavily on the end results. For those who
remember the 80s, this region is now very different to how it was, yet it is still an important region for
a very qualified group of Italian companies that continue to work there in a stable manner.
Of particular importance is the further diminishing role of Saudi Arabia which Table 11 shows in detail:
important figures but still a negative trend.
Yet another different scenario in relations between Italy and the Far East. The entire region shows that
overall exports including all product types decreased in value even though the overall volume of trade
grew.
However, the trend revealed concerns above all two product types. It is a trend which stems both from
the differing range of export products, i.e. the different weight carried by the individual export products
and the resulting variation in average value, shown in Table 13.
An important point emerges and that is that finished granite products placed on the market in this region
increased in value in 2007 too. This confirms that the vitality of Italian products is based first and
foremost on quality and that its competitiveness is once again confirmed in the top range of specialised
quality supplies.
America is excluded from this analysis, firstly because the picture of the situation of the Italian stone
industry in the USA comes under the more general picture of this country and secondly because a lot
has already been said to this regard. Together with Turkey for marbles and China for granites, Italy by
and large managed to deal with the pressure and challenge of a declining market, even though its direct
exports did suffer a little. However, in this country in particular the single European currency had a
great effect on the end of year analysis and the prospects for 2008 are still very uncertain. There is talk
that 2009 will be a year for recovery, which reinstates the continent of Europe as the privileged region
for Italian industry and not only the stone industry. We shall see how this unfolds shortly, although
signs are actually already visible in the first few months of 2008. The general feeling on the part of
Italian companies is one of general uncertainty regarding the sector, even if the expectations for their
own companies are a little more relaxed. However there is still a strong general feeling of a sort of
standby situation both in the macro and micro environments while certain things are being clarified.
Never before have future forecasts, read almost twenty years ago in an international research report,
been so right, almost prophetic. This report produced by the UNCTAD, the UN agency in Geneva,
stated that the coming years, up to at least the first decade of the new century and millennium, would
be hit by generalised turmoil. And even in our small sector, which accounts for a mere fraction of the
international GNP and world trade, we have been living this turmoil for some years now.
Italian imports reflect not so much the expectations in the industry as much as some of its overall trends:
Italian imports of marble blocks increased for example from Spain, Portugal, Greece and Slovenia and
also from Turkey, while granite block imports decreased in line with the declining importance of granite
in the national sector. Hence imports fell from “strong” suppliers such as Brazil and South Africa while
growth of Indian imports was limited and only in terms of volume. At the same time, though, finished
product imports grew, equalling exports to minor regions. Marble imports grew for example again from
Spain, Iran and the omnipresent China, but it was above all granite finished product imports that grew,
mostly from China, to over 25 million euro, a limited value but inconceivable even just a few years ago.
The overall picture, therefore, shows the Italian stone sector as a sector with strong exports and the
expertise to respond to the upgrading of the international market in order to maintain its share of the
market and its high profile international role. Above all the sector shows its great capacity to remain
competitive and hence maintain its role as the “big driver” of international quality yet again, almost
at the end of this first decade of the new millennium. Faced with competition, problems with rival
countries in terms of costs, presence, difficult benchmarks for numerous reasons, yet in markets that
are not always expanding and are even declining, Italy shows that it can withhold its position and
competitive margins and expand in other newer markets. One of the main characteristics of this year
is in fact Italy’s ability to increase its range of alternative markets, increasing their specific and overall
role, yet without moving back into old situations, rather maintaining a more than dignified share in
conditions that are objectively very difficult. Hence in 2007 Italy’s markets were not only Germany and
the United States but also Russia, Poland, Croatia, Morocco, Algeria which it managed to defend more
successfully than its new, aggressive competitors and it also rediscovered other traditional partners
such as Switzerland and the Arab Emirates. Finally, the slowdown which came about in the final part of
2007 did not affect the annual results which remained very positive, although 2008 looks to be affected
and we shall have to wait at least until the election of the new US president to see the effects of certain
basic indicators.
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