Marble Ind

ANALYSIS OF PAKISTAN INDUSTRIES MARBLE AND GRANITE INDUSTRY Prepared by: SEHRISH KAPADIA AYESHA JAWAID BEENISH MUDABIR ALKARIM VAYANI

AGENDA INTRODUCTION HISTORY IMPORTANCE & USES WORLD SCENARIO PAKISTAN SCENARIO IMPORTS AND EXPORTS PROBLEMS GOVT. POLICIES AND STEPS FUTURE PROJECTIONS CONCLUSION RECOMMENDATIONS

INTRODUCTION Marble is a crystalline, compact variety of metamorphosed limestone, consisting primarily of calcile (CaCO3), dolomite (CaMg (CO3)6) or a combination of both minerals. Granite is igneous rock of visible crystalline and formation and texture. It is composed of feldspar (Usually potash feldspar and oligoclase) and quartz with a small amount of mica (biotite and muss covite) and monor accessory minerals.

MARBLE IMAGES

HISTORY Marble and Granite has been mined and cut for centuries. Mass production was introduced in the 20th century. In 1960’s, mines development was initiated in Europe. The stone industry YEAR MARBLE registered 000 GRANITEan 000 annual TONS growth rate of 13.3% since TONS late 70’s. 1976

13600

3400

1996 1997 2002

26450 27650 50 MILLION

17625 19350 N.A

WORLD’S TOTAL PRODUCTION SINCE 1970’s 1986 13130 7385

HISTORY (cont:) In Pakistan, this industry started to develop in the last 60’s without any quality consideration. At that time, most of processing equipment was locally made at Gujranwala and Lahore. In mid 70’s, few plants were imported from Italy, but were 2nd generation plants and had no quality consideration. During late 70’s, few large projects and wealthy private housing clients brought imported granite tiles and introduced quality in Pakistan. In last decade, very few units were established in accordance with international standards.

World scenario Dimensional stone are produced in more than 42 countries of the world while 12 of these producers are dominant in the international market i.e. European countries and 3 from Asia and Africa. A major part of production is consumed locally by the producing countries. Today, World’s total production is approximately 65 million tons and consumption is estimated $40 Billion per year. Italy is the world leader in marble, granite and other stone sector. It is leading with 17% of the total worlds production.

World scenario

(Cont:)

Almost 50% of the world’s marble output is consumed in the Middle East , Far East and European countries ; therefore, there is a great demand for marble in these regions. The international marble & granite trade is marked $3.5 billion or 1.987 million tons in 2002-03 (Pakistan’s share was only 0.047 million tons i.e.2%). India has been the main exporter of marble granite for the five years. It capture 15.2% of the world’s total export. Italy has been the largest importer of marble and granite for the five years. It accounted for 39.4% of the total imports.

WORLD’S MAJOR EXPORTERS & IMPORTERS MAJOR EXPORTERS COUNTRIES 2000 INDIA

2001

2002

102.66 99.58 106.55

VALUE IN $ MILLION

% Share 2002 15.2

NORWAY

77.02 80.88

86.54

12.4

ITALY

59.21 60.98

63.42

9.1

CHINA

MAJOR IMPORTERS 54.04 52.42 51.37

COUNTRIES 2000

2001

2002

7.3

VALUE IN $ MILLION

% Share 2002

ITALY

350.46 344.48 323.59

39.4

CHINA

100.49 112.47 155.82

19.0

SPAIN

100.11 97.60 102.85

12.5

PAKISTAN SCENARIO Pakistan’s marble and granite sector is in its nascent stage of development. The country is currently mining 40 types of natural color marble and also dying the marble in various colors. Marble, combined with granite is included in the list of sixth largest minerals extracted among coal, chromite, rock salt, limestone, china clay, dolomite, fire clay, gypsum, silica and etc. Since 1990 mining and quarrying has consistently contributed 0.5% to the gross domestic product. It is providing job opportunity to more than 40000 people.

PAKISTAN SCENARIO According to estimates, there are 160 million tons of marble and more than 414 million tons of granite reserves in the country. 158 million tons of marble reserves are found in NWFP. The process of extraction of marble and granite is very out dated and obsolete. We still use explosives to blast the blocks resulting not only in a high wastage (up to 73%), but also smaller stone size. There are 1600 units and 9 units for the processing of marble and granite, respectively. There are only 25 to 30 units which have appropriate machinery Majority of units operated manually, which causes high rate of wastage.

PAKISTAN SCENARIO Pakistan get only 1% share in world total production. PRODUCTION

TONS

1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05

412000 521000 542000 685000 1142000 3.3 MILLION 5 MILLION

REGIONAL CONTRIBUTION BALOCHISTAN: It has nearly 60 operational mines. Total known reserves of marble are around 2 million tons .i.e. 1.5% of total reserves. It has only 60 small size units.

SINDH: There are 15 operational mines. The estimated reserves are 1.5 million tons of marble & 1 million tons of granite. It has one large, 180 medium & over 600 small units working.

REGIONAL CONTRIBUTION (cont:) PUNJAB: It has no contribution to this sector, but more than 250 medium and small units are working.

N.W.F.P: There are158 million tons of marble reserves found in NWFP i.e.97% of total reservers.

EXPORT Pakistani marble is being export to more than 60 countries. The 40 per cent export of the marble was in the shape of handicraft while, the rest of 60 per cent in slabs and bricks form. The Exports amounted to approximately $21 million in the fiscal year 2005-06, showing an increase of 28% than 20042005 ( approx. $16.4 million).

EXPORT Major countries include Bangladesh, China, Hong Kong, Saudi Arabia, USA, Italy, etc. COUNTRIES 2001-02

Value in 000$ 2000-01

Bangladesh

967

1000

China

501

415

Hong Kong

386

93

Italy

670

593

Saudi Arabia

196

235

USA

1712

2384

IMPORT Pakistan only import the machine for the process of mining, polishing and cutting etc. 1998 1999 2000 2001 Values 2002in US $

Total

2638

2845

3326

3093

2944

%

100

100

100

100

100

Italian Share

438

452.4

6601

%

16.6

15.9

19.8

606.7 479.5

19.6

16.3

IMPORTANCE & USES It contributed in the GDP at a percent of 0.5% (2004-05). It’s demand increases with investment in construction sector. It is used in buildings, masjids, and homes. It is also used in statues and monuments. It create large number of jobs. It’s forward and backward linkages also provide jobs to many people, i.e. NonSkilled; Semi-Skilled & Skilled Lab

PROBLEMS 1. Lack of proper machinery to produce quality production. 2. Lack of awareness and facilitation in selecting appropriate tools for different tools. 3. Untrained workers. 4. Non existence of quality control prices. 5. Poor raw material supply. 6. Lack of distribution channels including raw material and finished goods warehousing. 7. Incapability in supplying consistent product. 8. Ineffective marketing strategy.

SWOT Analysis: STRENGTHS

history & experience Diagnostic Study on Marble Processing Cluster, Rawalpindi/Islamabad SMEDA_UNIDO Cluster Development Program 20 Located in and around capital city of Pakistan (relationship with government and foreign consulates)

WEAKNESES:

In spite of being the largest cluster of Rawalpindi/Islamabad region industry lacks stimulus towards value addition, and investment in highend machinery and Human Resource is minimal. disadvantaged in case of raw material availability transportation costs

Cont… Islamabad has lots of planned construction area so local market is available. Have 2 chambers of commerce in the vicinity. The head office of APMIA is located in the cluster that gives national leadership to the cluster.

Comparatively disadvantaged in case of investment portfolio and costing structure if want to import squared block from abroad. There is a 100% demand-supply gap of skilled labor in the industry There is no waste management policy or strategy or feasible utilization of marble slurry.

SWOT Analysis: OPPORTUNITIES: no import tariffs Pakistan has large reserves of several varieties of Marble. Raw material availability for handicraft manufacturing. Almost 10 model quarry projects are planned which will ensure square block supplies to the cluster.

THREATS: Entrepreneurs may not be willing to invest in labor presently working with them cluster fails to finalize the contract because of time delays due to irregular shape and irregular supply of the marble stone.

Cont… Mines from Mianwali may start operating which is near to this cluster. Policy climate in NWFP and FATA is getting better which will also ensure better supply of raw material

Investment on high quality machinery in final processes is not feasible due to low quality mining and quarrying. China has already destroyed the granite processing opportunity with its low cost bulk selling.

GOVT. POLICIES & STEPS The federal govt. is inviting the investors, both local and foreign, to invest in marble & granite sector. The Government also directed the Industrial Development Bank of Pakistan (IDBP) to setup a marble processing plant in Quetta for which the provincial Government would provide land. The SMEDA was also directed to provide guidance and cooperation to the industrialists for establishing marble & granite processing plants in the province.

GOVT. POLICIES & STEPS (cont).. The Prime Minister of Pakistan announced that an international standard Marble Training Institute would be setup in industrial Unit phase 1 , to promote skilled labor force which would ultimately contribute to the growth of this industry and promote its exports. He urged the private sector to come forward to exploit huge wealth of untapped mineral.

GOVT. POLICIES & STEPS (cont).. In 2006 President of Pakistan inaugurated the “marble city” at Gaddani and assured the manufacturers that mining would be undertaken latest technology to avoid wastages. About 300 units would be setup for the marble city on some 600 acres and investments from the citizens of Pakistan from USA, JAPAN, SPAIN and UAE. He also assured other measures to help marble industry as they have failed to utilize boom in marble industry.

FUTURE PROJECTIONS It is forecasted that the production increases with a compounded annual growth rate of about 8% per annum. YEAR PRODUCTION 000TONS 2010

138750

2015

206240

2020

306500

2025

455000

FUTURE PROJECTIONS In Pakistan, this sector has a long-term potential, which is ensured by large local reserves, and a growing global market. The export estimate that the country’s export of marble, which is presently $7 million, can be increased to $40 million within 3 years. Provided wastage is reduced and reserves should be exploited and market properly

Conclusion This sector needs to be organized on modern lines. The induction of modern technology in this sector will increase efficiency of processing units. Improving the standard can only increase the demand of Pakistani products in international market. This sector has great potential to contribute to the national economic growth and for the generation of employment mostly in the rural areas. This sector also needs to be organized scientifically with a consistent follow-up by the ministry of industries and production to achieve the export target of $500 million. If the sector is scientifically treated, it can generate more employment to 10000 to 50000 people.

RECOMMENDATIONS Government should make a policy. They provide licenses to the firms, discovering marble reserves in previously un explored area. Private sector should be motivated by giving incentives, security, etc for making investments. Technology should be upgraded. This sector needs better marketing campaign.