Problems question

Is granite more expensive than man-made materials?
Natural stone is competitively priced with quartz surface products, and depending on the stone selected, is often priced lower.

How long will my natural stone last?
Take care of your natural stone, and it will last for generations.

The Market and the Actual Production:

the world production of dimension stone comprising of marble, granite, slate,

limestone and sandstone is about 70 million tons (Mumtaz, 2003). In marble, production is

dominated by five countries worldwide, Italy, Turkey, Spain, India, and China.

These Countries control over half of the market. Worldwide the marble industry has been growing strongly since the 1990s, and at roughly 8.7% per year since 1999. The industry is expected to continue to grow over 8% per year into 2025. Currently, 55% of the marble quarried is destined for exports. Estimates are that by 2025, 60% of all quarried marble will be exported (the OTF Group, 2006). World marble imports are estimated at $2.5 billion (AISA, 2008). Recent market trends indicate a shift away from exports of blocks to more value added products such as slabs and finished goods like tiles, etc. (the OTF Group, 2006). Based on these facts, the overall trend of the marble industry, worldwide, seems to have continuous growth, which makes the industry players optimistic about its future. Regional dominant of marble industry in Afghanistan marble market is primarily Pakistan followed by India and Iran, though India does very little export. “The largest share of value is found in quarrying blocks and in cutting slabs, the most difficult and capital intensive links in the value chain. However, countries with the ability to manufacture cheaply (especially China) are beginning to enter the finished goods market, and rich economies are increasingly importing finished goods. Currently, the largest importers of slabs and finished goods are the US, and the Middle East, UAE and Saudi Arabia” (the OTF group, 2006). The Afghan traders import finished goods – in vast quantities – from Pakistan in different colors and sizes. The Afghan marble – due to its high cost of production – cannot compete in the Afghan market. Currently the Afghan marble industry aggregate production capacity – at the quarry sites based on existing contracts with five domestic companies and/or individuals – is supposed to be around 11,000 Metric Tons (MT) for the year 2008 (Quarry Dept. of MMI, 2008). The actual numbers collected from the factories doing the quarrying operations is slightly different. Look at the chart below: In some part of the country – due to bad security situation – unknown volumes of marble is illegally quarried and transported to Pakistan in the form of raw materials, which is further processed (value added) and imported back to the Afghan market with higher price (Deputy Minister of MMI, 2008). This fails to maximize the potential value of the marble, which would capture higher export prices if cut into slabs and polished. Presently, there is not or very less equipments in the country that can cut slabs to the international standards. Outdated processing methods and machinery lead to a higher degree of wastage– in some cases as high as 80% (AISA, 2008). There are literally around 130 SMEs nationwide registered to be functioning in the marble industry. But in the real world only around 30% of them have been productive. Of these, very few are involved in the quarrying operations and most in the processing part through the value chain. Take a look at the graph below

Recommendations:

despite the fact that there is almost infinite best quality marbles deposits throughout the country and enormous demand exist within the domestic and international markets ,afghan firms are not performing very well -price is high ,quality of finished products in term of polishing and finishing is dire ,innovation lacks, market is dominated by foreign products ,and export of marble is low moreover ,the current market condition cannot attract enough investment reasons for this situation range from undesirable legal framework and bureaucracy to lack of factors of production but the reason for bad performance of establish firms is lack of direction which is caused by both lack of direction which is caused by both lack of incentive and lack of effective regulation by the government

Date: 2015-01-29; view: 668