Brazil, Part I

The Brazilian granite industry reflects, in a peculiar way, the economical and social development of the country. From exporter of blocks of granite to Italy during the decades of 1980s and 1990s, the Brazilian industry matured in an unprecedented way and became the sixth-largest world exporter of stones in physical volume, after Italy, China, India, Spain and Portugal.
Such maturity didn’t happen by any means in an organized and systematic way. The sector found serious difficulties in modernizing, in being able to compete in a global economy, and organizing themselves as a sector.
In a series of three articles, Stone Business will bring to you an inside picture of the Brazilian granite industry, including an overview of the most-recent economical studies of the sector; a retrospective of exports from 1999 to 2002; and how the Brazilian sector is organizing itself to be part of a more-sophisticated and -competitive market.

By Roseli Perrone

The Brazilian production of dimension stones is greater than 5 million tons a year and the exports already reach 1.1 million tons a year, placing the country in the group of the world’s top producers and exporters. Stone companies in Brazil operate with almost 1,600 gang saws, with a capacity of 40 million m² annually. Brazil possesses a remarkable wealth of natural resources, producing 500 commercial varieties of rock – including granite, marble, slate, quartzite, travertine, soapstone, basalt, serpentinite, conglomerate, talc stone, miracema, cariri and morisca, all from approximately 1300 active quarries. Granite makes up 60 percent of Brazilian rock production; 20 percent is relative to marble and travertine, and almost 10 percent to slate.
The states of Espírito Santo, Minas Gerais and Bahia total 77 percent of the Brazilian quarry production. The Espírito Santo is the major producer, with 47 percent of the national total; Minas Gerais is the second largest producer, having the largest diversity of extracted stones. Brazilian stone, especially with granite products, saw a continuous increase of exports during the 1990s, surpassing $100 million in 1993 and reaching $280 million, with a volume of 1.1 million tons in 2001.
Finished products represented 29.7 percent of the weight and 60.2 percent of the value of 2001 exports, showing the largest growth indexes in relation to 2000. About 66 percent of the exports of finished products, in value, were destined for the United States, while 37 percent in weight of the exports of raw products were sent to Italy.
In fact, the transition of Brazilian production from raw material to finished products (polished slabs in particular) can be well illustrated by the example of the United States and Italy. Total exports to the United States last year was $116 million, representing 41.7 percent of the total, which means an increment of 8.7 percent in value from 2000. In contrast, 2001 exports to Italy totaled $47 million, which represented only 16.8 percent of stone shipped by Brazil and a decrease of 13.8 percent in value from 2000.
At the same time, exports also grew in slated and foliated quartzite, as well as soapstone and serpentinite varieties. These materials, characterized by regional production and processing, represented 15.4 percent in value and 12.9 percent in weight of the Brazilian export of stone.
Slate represent a special case; Brazilian production of 410,000 tons a year, is second only to Spain, and represents 15 percent of the current announced world production (2.8 million tons a year). Export of Brazilian slates reached $30 million last year, corresponding to 84,300 tons – a growth of eight percent in value and 13.4 percent in weight from 2000.
A projected growth rate of 10 percent annually in weight of the exports, and increments of five percent a year in weight of finished products, would put Brazil’s export revenues at $750 million in 2007. And, this is with a doubling in weight and tripling in value of the exports.
To handle such projected growth in exports, as well as handling stone consumption internally, Brazil’s stone production facilities would need a minimum of 560 new gang saws, 190 new polishing machines and 50 new block cutters in the next five years.
The attraction of capital, along with strong foreign companies with experience in the stone industry, is considered strategic for Brazil. This would aid in improving the extraction, process and the application of material; making new production centers viable; installing modern industrial trans- formation service; and guaranteeing the commercialization of Brazilian products internally and internationally.
In this case, there’s interest in joint ventures with European, Japanese, North American, South American and East Asian entities that control the better part of the global market. Ties may also need to be strengthened with its long-time export customer: Italy
“Brazil needs to take advantage of the cultural proximity and relationship created over the years with the Italian industry,” says Cid Chiodi, a geologist and consultant for the stone sector in Brazil, “and to establish a technological partnership with Italy, instead of competing with them as an exporter of finished stone products”.
The granite sector today in Brazil is very positive, with many companies working to modernize its production faciliies, along with efforts to help others in dealing with economical and administrative barriers, and lack of information and knowledge of the potential growth.
Statistical Source: “Brazilian Dimension Stones in the 21st Century” prepared by the Brazilian Industrial Association of Dimension Stones – ABIROCHAS – by Cid Chiodi.

This article first appeared in the September 2002 print edition of Stone Business. ©2002 Western Business Media Inc.