Our Editor-in-Chief Hasan Ercazip took a photo of 2024 in the natural stone industry…
They say, “The moment of darkness is the closest to light.”. There has been a serious crisis in the natural stone sector, especially in the last 2 years. While evaluations such as “2024-2025 seems problematic, but things will improve afterwards” were made in the past, there is still no light at the end of the tunnel. One inevitably makes the following inference: We have not yet reached the peak of the darkness! Let’s dive a little into that darkness.
Fall in demand, brake on supply
The problems need to be analyzed on two grounds. The first is the global situation. It can be said that there have been problems in the world economy recently and trade has slowed down. This situation affects the natural stone sector, of course. Without analyzing different markets, there is a general decline in demand. This situation also puts a brake on supply. Most companies are working below their standard capacities, some quarries are entering the winter season early!
Bleeding wound: block market
The biggest problem for the natural stone sector is the block market. It is possible to say that the block market has been declining step by step since 2017, even if the years 2022 and 2023 are considered to be the end of the line. While 5 million 663 thousand tons of block marble was exported in 2017, this amount has decreased to 3 million 436 thousand tons by the end of 2023. In terms of earnings, it has decreased from 1.1 billion dollars to 665 million dollars. In other words, the loss is about 50%.
The rules are changing in China
It is possible to say that the 2024 Xiamen fair was a serious shock for the sector. While Brazilian and Italian companies were full of companies, the almost non-existent interest in Turkish booths surprised everyone. It is clear that the rules of the game are changing in China. China is tired of its role as the ‘heavy laborer’ of the sector. Less but more profitable business logic comes to the fore. In other words, the Chinese market is no longer at the point of “take what you give”. The sector’s expectations from the Chinese market have also fallen. This is also very clear from the demand for the 2025 fair!
Suez crisis is an extra burden
This crisis in China is being compounded by the crisis in the Suez Canal. Due to the attacks in the region, cargo ships that stay away from the Suez Canal are traveling around the Cape of Good Hope. The increase in freight rates is also a burden on exporters. In this case, the delivery time of 30-32 days increases to 2 months, and the time to monetize the goods sold increases. Chinese buyers are turning to alternatives such as Cambodia where they can get their products more quickly!
Surprises to stand out
Fashion is certainly important. But when a color or a stone is in fashion, isn’t it time to see what the results of the quarries opened in the same region, almost next to each other? I think 4 years ago in Xiamen, my Chinese friend Tim Wu said, “Turkey is the country of surprises in natural stone”. Recently, it seems as if the sector has forgotten this identity. Instead of similar tones and similar stones, it is imperative to emphasize surprises that will surprise people and that are unique in the fair.
India holds the bargaining chip
We have already underlined the impression that the stagnation in China has become permanent. The words of a friend of mine, who works mainly in India, “Even Chinese experts are now asking us about the details of doing business in India” speak volumes. But 2024 is not a pleasant year in the Indian market either. We also hear that Indian customers see the stagnation in China as a bargaining chip. Customers who are constantly trying to undercut prices are doubling their boredom. Likewise, the Egyptian market is not moving.
A ‘ban’ expectation in the US!
As you may know, the use of composite stones was banned in Australia at the end of last year due to silicon-related deaths. Following this decision, unions in New Zealand also called on the Minister of Labor to ban composite stones. Similarly in the US, we have learned that the issue has become more talked about in the media and that a possible ban is being discussed. So what happens if the ban comes? Would there be a serious boom in the US market? Would there be an increase similar to the renovation activity during the pandemic? The possibility is very close.
Fair logic must change
When we talk to people in the sector about fairs recently, a demand for change stands out. For those who are trying to read the world more deeply, our fairs and our exhibition logic at fairs have come to the following point: Repeating ourselves. Imagine that you visit the inside of the fair with 3D glasses. Almost identical stands, similar stones and presentations that do not go beyond the display of raw materials. It is time for presentations that emphasize creativity and art, and for the Izmir fair to become much more colorful.
Costs are bending the waist
While listing the self-criticisms of the sector, external factors should also be underlined. Cost increases are at such a point that they are seriously shaking the sector. Fear of tomorrow has replaced the appetite for new stoves and new investments in the sector. Diesel, which was 18.50 liras as of May 14, 2023, when the general elections were held, has climbed to 43 liras today. The minimum wage of 8,500 liras became 17,2 thousand liras. On the other hand, the dollar has reached 34.15 from 19.64. Exporters, who cannot reflect this situation to their customers, are overwhelmed with subsidizing the difference!
Now it’s time for accounts
The result of all this? I think 3-4 years have passed since a fellow exhibitor said, “Brother, this is the first time I have seen marble manufacturers doing cost accounting”. Now it is the era of calculations. Those marble producers are thinking about how to save money and how to keep the ship afloat! Some close their quarries early, some put them up for sale, some avoid buying machinery. New investments seem distant and scary. As we said at the beginning, there is no light behind the darkness yet.
