Foreign Stone: A Grave Concern?

FADE TO BLACK

Just how much of an impact foreign imports are having on the U.S. monument industry is definitely in the eye of the beholder.

For Kurt Swenson, president of Barre, Vt.-based Rock of Ages,
the current scenario is something of a good news/bad news proposition.
He sees the largest impact coming with imports of black granite,
initially from India and more recently from China.

“More people are
choosing black granite,” he says. “It’s not clear that it’s a price
issue, although it’s clearly made black granite more competitive. But,
a lot of people are interested in etchings, which are best on black
granite. So, there’s some consumer preference playing into it.”

Chuck Monson, president of Milbank, S.D.-based Dakota Granite,
agrees with Swenson that black granite – specifically, its use in the
Vietnam Veterans Memorial in Washington – opened the gates to imported
stone for monuments.

“The Vietnam Memorial is done in an Indian
granite, and that started the trend toward black granite,” he says.
“Now the Chinese have entered the market with even lower prices because
of their cheap labor rates and a deflated currency.”

Unlike Swenson,
however, Monson says the imports have had a significant impact on his
business, a view that’s shared by Tom Robinson, executive vice
president of the Elberton, Ga.-based Elberton Granite Association.

“They’re
making it very difficult for us to compete,” says Robinson. “They’re
very aggressive in establishing channels of distribution, and they seem
to be willing to sell to just about anybody who will make them an
offer.”

Robinson’s membership includes about 150 manufacturing
plants in the Elberton area, most of them involved in producing
memorials. Much of the stone for those memorials has traditionally come
from some 45 producing quarries in the region.
While Elberton gray
granite is its best-known export, profit margins are small. Many plants
found better income manufacturing other colors of granite into blank
monuments.

“The blacks, the reds, the mahoganies that are not as
available in the marketplace always commanded a little higher price due
to supply and demand,” Robinson says. “Now, our local producers have
lost most of those sales to the foreign imports.”

Mike Zniewski, general manager of Rex Granite Co.,
a family-owned wholesaler in St. Cloud, Minn., says his company has
been impacted for several years by foreign imports; as time has gone
on, those impacts have gotten greater.

“It’s really changed our
business,” he says. “We’ve had to start importing some of that stone
and reselling it at a lesser profit margin.”
 
PRICE POINTS

Joining
in the parade to use imported stone may set the teeth of some in the
monument industry on edge, but it’s not likely they’re going to beat
them sticking to domestic products. The main reason: Price.

While
the Vietnam Veterans Memorial may have influenced the initial move
toward black monuments, black granite from India – and now China – is
also lower-priced than anything produced domestically or imported from
Africa.

Bruce Fuerstenberg, president of the Monument Builders of North America (MBNA) trade organization, says a similar situation occurred with red granite.

“The
domestic red from Wausau (Wisconsin) is beautiful granite, but very
expensive,” says Fuerstenberg, who’s also president of the Vancouver,
Wash.-based retailer Vancouver Granite Works. “When the Indian red came
in, price was a big thing, because it was considerably cheaper than the
Wausau. Cost was an issue there, and since then the spectrum of colors
has only expanded.”

As with the Elberton granites, Ned Steinmetz, a
partner in the family owned Willow Monument Works in Bridgeport, Conn.,
says price is definitely undercutting consumer demand for the
Barre-area granite that used to be a mainstay for his business.

“What
we’re seeing now is a lot more people purchasing Chinese gray granite
through some of the smaller dealers,” Steinmetz says. “They’re using it
as a less-expensive alternative.”

Steinmetz attributes the
difference to the lower cost of labor overseas; while it’s not really
affecting his business he knows it’s hurting suppliers his family has
dealt with for generations.

Michael Feinberg, a designer and
operations manager for Chicago-based Peter Troost Monument Co., says
from the retail side that lower price can actually be a real benefit
for people seeking more intricate monuments.

“Foreign stone affords
me the opportunity to be really creative,” he says. “I can make some
really different-looking monuments and the cost is still affordable at
the retail level. I can take a monument that might cost us $3,000
domestically and get the same thing overseas for $1,800, and it still
has perceived value.”

The idea that retailers are turning to foreign
stone for custom jobs is part of the continuing evolution of the
market. Initially, the product reached this country in a few standard
sizes and designs, and Elberton’s Robinson says that thanks to the
Chinese government, suppliers were able to hold deep inventories of
those products.

“They did their homework, they knew which sizes are
commonly used in which markets, and with their inventory, if somebody
wanted something they could pretty much deliver it tomorrow,” says
Robinson. “If nothing else, it’s becoming important for the domestic
manufacturers to maintain an inventory of standard sizes so they can
match the service response time on orders.”

However, due to the
difference in prices between foreign and domestic stone, retailers are
finding that buyers are willing to wait the weeks, even months it takes
to cut a custom order overseas.

Vancouver Granite’s Fuerstenberg
relates a story from his own business where a customer needed to
duplicate a 3’ X 7’ red granite slab covering a grave. Fuerstenberg
began the process by calling a well-known granite supplier that deals
in both domestic and foreign stone.

“They could have made it for me
right away because they had the slabs,” he says. “But, they said if we
waited for a piece from India it would be about $1,000 less. I called
the family and explained that if they’d wait four or five months it
would be a whole lot cheaper. They weren’t in a hurry, so they waited
and the stone came from India.”
 

GUARANTEED CHANGE

While
Fuerstenberg’s clients knew they were buying an import, those in the
monument industry say many don’t know they’re not getting a domestic
stone, and the idea of getting an American-made product doesn’t
register with others.
Dakota Granite’s Monson says he suspects a lot
of people would rather rest under a domestically quarried stone,
especially those who’ve served in the military. However, “I don’t think
the retailer wants the customer to know,” he says.

Robinson says
response to a joint program by his association, the Barre Granite
Association and the Northwest Granite Association urging people to “Buy
American,” only went so far. Rock of Ages’ Swenson says a lot of that
has to do with human nature.

“One of the first issues the consumer
is interested in is color,” he says. “If they say that they want black,
you can’t say to them, ‘No, you don’t want black.’ We can tell them
it’s imported and we offer black granites quarried in the United
States, but if they want that color and we say, ‘It’s going to cost
$1,000 more to make in the United States,’ it isn’t going to work. It’s
just not a sales proposition people are going to accept on a commodity
type memorial.

Swenson says the exception to that is with large or
highly personalized memorials where workmanship and a warranty are
critical. The idea of a warranty on domestically made memorials is one
the Elberton Granite Association adopted as its own.

“We offer a
written guarantee on products that are manufactured by our members, and
we won’t put our seal on any imported material,” says Robinson. “We
stress to our members’ customers that if they want a certificate of
guarantee it has to be on a black granite manufactured by one of our
member companies.”

Of course, the issue of a certificate of
guarantee raises a question about the quality of the products being
exported. Opinions tend to vary, but Robinson, for one, says he feels
the memorials are inferior.

“We’ve heard reports of many instances
where this material is failing,” he says. “It’s been about 10 years
since they started putting stone in the United States and now we’re
starting to get reports that it’s begun to crack or discolor.”

However,
Rex Granite’s Zniewski says he thinks claiming the stone is inferior is
just a sales tool, and that it’s not appreciably different from what
comes out of the ground here or in other foreign countries. Troost’s
Feinberg agrees.

“As for the stone and the quality of the work, you
have to be careful with who you deal with,” Feinberg says. “But, that’s
the way with anything, even domestically. If you have the right source
overseas, the quality of the product can be exceptional.”
Guarantees
aside, how do the wholesalers intend to compete with imported
monuments? For companies such as Rex and Dakota Granite, the keys are
quicker turnaround times on jobs, and diversification of products.

Zniewski
says Rex now offers a delivery time of 20 working days on monuments it
produces. And, along with offering some of the imported monuments, the
82-year-old company is diversifying in other directions.

“We’re
getting into other stones,” he says. “For instance, we now handle white
marble, and we never used to do that. We also handle some landscaping
rock, which we never used to do.”

Dakota Granite’s Monson takes much
the same approach. Not only is the company inventorying more standard
designs to give its customers a five-day delivery on them, but he says
he’s kept investing in technology and machinery in able to better
compete.
“One of the things we’ve tried to promote is
customization,” Monson says. “Doing different shapes and different
textures is one of the things we’ve tried to promote. We’re doing more
one-of-a-kind monuments than we’ve ever done, and we’ve also
diversified into countertops, cut-to-size jobs, and we’re expanding
into mausoleums and columbaria.”

So far the push has been
successful, and Monson estimates as much as 40 percent of the monument
work his company now does is custom.

While it’s the wholesalers that
have felt the biggest impact from these imports until now, just about
everyone agrees that may change. Rumors abound that finished memorials
– complete with names and dates – will be the next product offered by
the Chinese, and even the most optimistic believe those finished
memorials will be further changing the market within the next five to
ten years.

Until then, Rock of Ages’ Swenson may have the broadest
view of the subject. He notes that his company actually exports granite
blocks to China, buys finished granite memorials from China, and is
focusing on expanding its memorial distribution system – not just in
the United States and Canada, but also in Japan, where the company has
a retail distribution network for its branded memorials.

He says the concern about Chinese stone has followed on the heels of concern about imports from India and, before that, Italy.