INDIAN GRAVESTONE INDUSTRY

Over the last decade, when the Indian granite industry has gone through a topsy turvy ride with a few years of fast expansion, then a virtual collapse of many of its tiles and slab plants, one segment has been growing steadily and increasing its market share and credibility in the world markets. We refer to the Indian gravestone manufacturing industry, a rare success in an otherwise picture of unfulfilled promise in the Indian granite industry. How has this been possible, why is it the industry has developed into a world-class competitive industry? And what is the state of the industry today? These are some of the questions examined in this article.

Number and size of companies

There are approximately 70 manufacturers in India of gravestones and another 60 companies, which are trading companies. In the last 5 years the number of companies has increased by about 10%, suggesting certain stability.

The manufacturers tend to be divided, as always, into big and small companies. Big companies are considered to be those that have the capacity of manufacturing 5 or more containers per month- and there are about 20 such companies. The rest would automatically be placed in the small company category. On an average about 100 workers are employed in a company. Total direct employment in the gravestone industry is about 10000 people. Indirect employment (due to related activities such as transport etc.) comes to another 10000 people.

Location of companies

About 80% of the manufacturers are located in the state of Tamil Nadu while the rest are located in the neighbouring states of Karnataka and Andhra Pradesh. The entire gravestone industry is thus located in the south that is where the quarries are to be found.

Total production

Total monument production in the Indian industry is estimated to be about 300 containers a month. (Curious, this. - when referring to blocks the normal term is cubic metres, in slabs the measurement is in square metres, while in the gravestones the reference point is containers). The entire production is exported, about 180 to 200 containers are exported to Europe, about 50 containers a month are exported to United States, 40 containers go for Japan every month while the rest are sold in Australia, New Zealand, South Africa and other countries. The months of November, December and most of January are considered to be the low season when monthly production drops to about half. An average container has a price of US$ 18000 to US$ 20000, thus the total industry size is estimated to be approximately US $ 55 million.

Granites more often used

The most popular granite used in the industry is Paradiso. Other popular granites are Red Multicolour, Vizag Blue, Absolute Black, Black Galaxy, Lavender Blue, Tropical Green, Viscount White, and Regal Black. Other granites that are also used by the industry are Cats Eye, Raw Silk, and Imperial White. In the United States the black colour is the most popular and Imperial Red is also in demand, while in Europe, especially Germany, it is Paradiso and Vizag Blue that are preferred. In the United Kingdom about 80% of the gravestones being sent are of black colour. In Japan the colours most in demand are black and grey. Most manufacturers do not operate their quarries- the large number of materials worked upon advises against this policy.

Evolution

During the last five years exports have grown steadily by about 10% but there seems to be stagnation setting in now. Not many new companies are coming in and neither are there many new buyers waiting to be discovered. Growth in market share of one company by a significant amount can only come about by taking away that of someone else. The size of the cake remains unchanged.

Purchase of machinery is done by existing manufacturers modernising their factories or replacing old machines. New technology investments have been made with the aim of reducing costs. In the last 4 years CNC machines have begun to be employed in many factories for making complicated designs. Most of the diamond tools and other consumables are imported, to the extent of 80% of total demand, and amount to 5 or 6 million US dollars per year.

The market share of Indian manufacturers in Germany has tended to be stable in recent years. The long-term trend in Europe is towards cremation as the younger generation is showing less preference for gravestones. Limitations and restrictions on space in Japan, Australia and Belgium, for example, have further increased the trend towards cremation.

A recent but growing threat that the Indian industry faces is from China. Chinese companies have been processing blocks from India and reselling to Europe sometimes at prices that are about 20% lower. Another threat that is worrying the Indian industry is the anti-dumping investigation which the EU has launched and which the Indians consider to be completely unjust and unwarranted. But this topic is dealt with in more detail in another article in this magazine.

Competitive advantage

One relevant question is why has the Indian gravestone industry been so successful? The industry is, after all, totally export oriented, and there could have been strong competitors from other countries also.

The first and foremost characteristic of this industry is it works with materials found locally. This simple fact, that the granite colours extracted locally are popular in the funerary industry of Europe and elsewhere, provides an important basis of a successful industry. But then the question comes up- why were the slab and tile industry not all that successful also?

That leads us to the second key aspect- that the blocks needed for the funerary industry tend to be smaller, and the prices of smaller size blocks, as everyone in the stone industry knows, are often much lower than the big gang-size blocks, sometimes by as much as 70%. So what would normally be considered wasted material in the quarries becomes the all important but cheap input for the factories thus enhancing their competitiveness. However, even this explanation is not complete. After all, small sized blocks could also have been exported at their lower price creating a successful industry elsewhere rather than in India where obvious advantages have so often been wasted away in the past. But transport of blocks no matter how small involve sending many tons which are wasted when processed and the advantage, therefore, lies with the local manufacturer. The advantage of time has also favoured the manufacturers in India. The cycle of order to delivery of finished material is much less when the processing is done locally than when done in Germany, for example.

One characteristic of the funerary industry is the component of manual skilled labour is higher as compared to the other types of processing- and skilled labour in south of India in granite is abundant. The state of Tamil Nadu and the other states of the south have a tradition of craftsmanship in granite going back more than a thousand years. Obviously labour in India is cheaper than in Europe, though the fact that the industry falls under the Factories Act means the workers in this industry are highly unionised with "privileges" like social security payments, provident fund, compulsory holidays, etc. which is still a dream for many other workers in India.

Added to the natural advantages mentioned above, an important reason has also been that the Indian funerary art industry made the wise decision of purchasing the most modern machinery from Europe and Japan. Thus we have the makings of a natural competitive advantage leveraged to create a genuine world-class industry. A textbook case in competitive advantage, if ever there was one needed. No wonder that the Indian businessmen are outraged at the attempts of some European companies to demonstrate that they are doing dumping. And that is another story.

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Last Updated: July 2008