INTERVIEW: HASAN ERCAZİP
We are at the Xiamen Fair… On the one hand, we are trying to keep our finger on the pulse of the fair and on the other hand, we are trying to get ideas about the direction of natural stone trade between China and Turkey. The right thing to do in this context is to establish a dialog with the big importer companies that have strong connections with Turkey… We knock on the door of one of the biggest ones, and with the support of our Chinese friend Tim Wu, we make an appointment with Shirley Chu, General Director of Universal Marble Granite & Group (UMGG).
First of all, let’s explain UMGG for those who don’t know. One of the largest natural stone companies in Asia. With more than 2 thousand employees, factories built on a total area of 1 million 200 thousand square meters in 4 different regions of China and 30 years of experience, it is a giant. The company, which also opened a quartz factory in 2014 with an investment of 2 billion RMB (140 million USD), operates in two areas. The appointment time comes, we say “Hello” to Shirley who is waiting for us with a smiling face.
Our first item of the day is naturally Turkey’s loss in the Chinese market. We remind that the Chinese market, which reached the 1 billion dollar threshold in 2017, fell below 500 million dollars by the end of 2022 and we ask the reason for this. Shirley underlines three factors: We all know that the last three years have been marked by the pandemic. Along with this, the Chinese real estate sector has also gone through a major crisis. Not only China’s imports have fallen, but also the general stagnation in the market. Yes, you talked about the numbers in the last 5 years, but actually the decline has increased a lot in the last 3 years. I think the situation was still good in 2019. In the last 3 years, we see that the government has changed some policies. There was a pressure on the real estate sector. I think this is the main factor in the decline you mentioned.”
When we talk about the real estate crisis in China, we ask Mrs. Chu to elaborate a bit… Here is how she explains it: “In China’s real estate sector, prices have been very high year after year. The government was disturbed by this and emphasized one sentence: Buy a house to live in. Not for investment. Everyone should be able to buy their own home. But when prices reach these levels, it is not possible for everyone to buy a house. Steps were taken to control prices and the money in the sector. We can summarize it like this.”
From the end of 2022, we are reminded of the news in the international media that the Chinese government has reopened the credit taps to the real estate sector. Shirley continues: “The crisis in the real estate sector became so serious that the government support resumed at the end of last year. But if you give food to someone who is dying, they won’t suddenly return to normal. It will take some time for the real estate sector to recover.”
It is here that we ask Shirley about his 3-year expectations for both the Chinese real estate sector and the natural stone sector. Do the efforts to revive the real estate sector mean the return of the golden days for natural stone? Shirley takes a deep breath and says: “It is not easy to predict the steps the government will take in China. We expect things to get better over the period you mentioned, but we haven’t felt any impact this year. After the ‘zero Covid’ policy in the pandemic, opening the doors and starting to support the real estate sector again will definitely have an impact. I think what you mean by the golden days are the years when China imported nearly 1 billion dollars of natural stone from Turkey. I am sorry, but I think those golden years are behind us. Yes, the situation may gradually improve, but it seems very difficult to reach those figures again.
How do they get along with Turkish companies? How do they choose the companies they work with from Turkey? Shirley underlines very valuable points: “We have long-term relationships with the companies we do business with in Turkey. Relationships that go back 15-20 years. We trust each other. We do projects together. For example, in a project we did in Egypt, we procured our stones from Turkey, not from China. We worked with factories from Turkey. So how do we choose the companies we work with? Yes, of course, we first determine the product and quarry we will purchase. But then it is very important from whom we will buy that stone. Because we always prefer to do business with a reliable supplier who will not damage the position of that product in the market, who will control the market in a smart way, who has the right marketing mentality. For example, I think there are over 50-60 gray quarries in Turkey. However, we work with very few of them. Yes, everyone is working to make money and profit. But if you are in a hurry, if you think of putting big money in your pocket in a much shorter time than you should, this mentality will damage your own product. We do not work with such companies. If there is a big drop in the prices of a product, it means there is a marketing error.
We are coming to Xiamen 2023… While walking around the booths of Chinese companies at the fair, we notice that the color green has become widespread, point to the dress she is wearing and ask “Is green the new fashion in China?”. Shirley interjects with a smile: “Definitely… We can say that green was the color of the fair. We live more in Hong Kong than in China. In Hong Kong, green and red were really fashionable a long time ago. Recently, we can say that green, red and yellow have become prominent in China as well. I want to underline here that I am talking about shades of yellow, not beige. Yes, there will still be whites, beiges and grays, but now is the time for strong colors.
Finally, Xiamen 2023 highlights artificial products and asks about the competition between natural stone and artificial products. UMGG Director General Chu concludes his words as follows: “I don’t get too hung up on that, to be honest. I think they are different markets. How do we separate them? Look, if there is a demand in the market, there will be those who sell this product. As UMGG, we work on natural stone. However, we also have a company that has been producing artificial products for 10 years. It existed 10 years ago and it exists today. The place of natural stone is always different. It is natural, you cannot replace it, you cannot compare it with another product. I think artificial products share the market with products such as wood and glass rather than natural stone. Natural stone has its own special market and will continue to do so.”
