The USA Factor

Continued

What kind of time and distribution advantage do you get from U.S. manufacturing versus importing?

SPECTRUM: The logistical advantages cannot be understated. We can quickly turn around any products that we develop instead of waiting weeks or months to import material. Shipping time has always been a struggle for our distribution efforts. With the domestic facility we can react to and meet consumer demands in a much shorter timeframe. LG HAUSYS: Importing products from overseas typically requires a 60-day lead time on average from order placement until receipt, so inventory management can be more difficult and costly. Having inventory on hand with short lead times for supply is a huge advantage in the marketplace. Having the ability to adjust production schedules at the U.S. plant for extraordinary customer needs that require expedited delivery can be a key differentiator to our overseas competitors. As we produce at our Georgia plant, we inventory material at our nearby central distribution center (CDC). We schedule replenishment shipments of material to our 11 regional distribution centers across the U.S., including Hawaii, from our CDC based on minimal stock level requirements by SKU (stock-keeping unit), so that we have material on hand when we need it to minimize lead times. This allows us to ship to customers anywhere in the U.S. in less than three days 98% of the time. CAESARSTONE: Obviously, time-to-market is faster when we do not have to factor in the time it takes to move product across oceans. This also allows us to be super-responsive to customers’ projects’ timelines. TREND GROUP: Let’s look at the disruption of 2020. There continues to be a disruption in shipping, which will probably take additional months to reverse because of the disruption in container patterns. We don’t have to contend with that. Now, we also supply overseas customers and so we’ve had to work through those issues, but from the other side. But, we’re glad we made that commitment to U.S. manufacturing back in the early 2000s because we’ve wanted as little disruption as possible. The other thing to know about our product is that we do a lot of custom colors, and being located here in the U.S. means that we can still meet very short timelines for those customers.

Caesarstone production line, Richmond Hill, Ga..

Have U.S. environmental regulations been a sticking point in production?

TREND GROUP: Not at all. We’re eco-friendly. We use up to 78% post-consumer recycled materials based on the product line, and we’re certified by the U.S. Green Building Council and GreenGuard. Also, our products contribute measurably to LEED® ratings based on credits for Material and Resources, Indoor Environmental Quality and Innovation and Design. CAESARSTONE: Not in the least. We commit ourselves to environmental responsibility and safety wherever we operate and follow and surpass all guidelines and regulations. SPECTRUM: Environmental regulations have not been a major issue for us. Even when we were producing quartz in China, the Chinese government was increasing environmental regulations. Before we made the decision to set up our facility in the United States, we accumulated a lot of know-how in matters such as waste-material processing and water recycling. We do not discharge one drop of wastewater; it’s all recycled. We were fortunate to find a well-reputed environmental consulting firm to aid us in the process. In addition, the state of South Carolina has been a great resource for us in terms of helping us meet the environmental regulations. LG HAUSYS: Environmental regulations have been a factor and consideration since the inception of the initial investment in our domestic production lines, but not a factor that would hinder our manufacturing processes. Integrating our approach to manufacturing with the latest environmental technologies, we have remained a benchmark in low-emission output from manufacturing. Adhering to environmental regulations is mandatory, but investing in best practices to minimize our environmental footprint has been an initiative of ours from the beginning.

LG Hausys production line, Adairsville, Ga.

Lower-cost import .will still be a part of the market. Is that a continuing problem or not?

CAESARSTONE: We are a brand that invests heavily in color and finish innovation and development. That cannot be replicated by off-shore material that doesn’t have the same level of investment and partnership with the design community. Moreover, we have a complete viewpoint on our entire value chain and know exactly what goes into the making or each and every slab and a lifetime warranty and after-market service team that off-shore companies, who come and go, do not commit to. If one were to amortize the cost of a CS slab over an off-shore product, and factored in the value of original design, investment in original talent, R&D, as well as other commitment to the product and our customers even after they purchase from us, it would be a matter of pennies. TREND GROUP: That’s just competition, and we always welcome the opportunity to expand our audience. But, we’re a U.S. company with a U.S.-made product. The uniqueness of our product and the simplicity of its use means our niche is the ability to go over other surfaces, and that’s the market we concentrate on making happy. SPECTRUM: Competing against lower-cost imports is an ongoing challenge. However, we are focusing on the medium- and high-end product offerings that we can produce using our proprietary technology. We believe there is significant demand for these colors that outstrips our ability to supply them. Going forward, we will continue to put effort towards developing the technology to produce new and unique look as close to natural stone as possible. LG HAUSYS: Competition in the market for quartz surfaces that are in high and growing demand will continue to increase. We welcome the challenge to compete through differentiated products and services. Price is only one component to a product’s success. We have found that focusing on quality, supply, service and most importantly staying at the forefront of design trends with new color aesthetics is the best formula to succeed. Lower-cost imports will always have a place in the market, but we feel confident we will continue to provide our customers surfaces that allow them to compete across the entire price spectrum.

TREND Group production line, Sebring, Fla.

Q: New locations for plants have been in the Southeastern U.S.: Why?

SPECTRUM: We believe it is a combination of incentives and location that make the southeastern U.S. a manufacturing-friendly region. When we started, we focused on a few states, including the Carolinas and Georgia. We settled on South Carolina because both the local government and the state government offered strong incentives, such as labor training, that have really helped us. We really appreciate the help and support from the state and local governments. LG HAUSYS: The southeast tends to offer a more favorable climate for production. In addition, coastal ports for the receipt of ingredient materials, as well as long shipping ports and lanes for our quartz surface shipments are easily accessible. TREND GROUP: Good weather, less traffic and transportation issues. There are no snow days and no ice on the roads and we’re near ports for shipping. Additionally, we have an exceptionally well-educated workforce and land is more-plentiful.

Caesarstone production line, Richmond Hill, Ga..

Q: Would you be willing to share how much your plant is producing annually?

LG HAUSYS: Actual production widely depends on the number of shifts and days per week the plant is operating. We have the ability to dial up or down production based on demand. With three Breton production lines, we have a full capacity to produce more than 400,000 jumbo-size slabs (63” X 130”) in both 2cm and 3cm thicknesses annually. SPECTRUM: Right now, we are still ramping up our production volume, so the annual production numbers are changing constantly. After this phase, we will be making machinery adjustments to further increase production. Our target when we have all four lines producing is 1,000 slabs per day. We believe we will be able to achieve that goal in 2021. We’re still ramping up, and then we’ll have a lot of adjustments to make, but our target when we have all four lines up is producing 1,000 slabs a day. We think we’ll be able to do that yet this year. TREND GROUP: We’re currently producing about 12,000 slabs a month, and we’re in the process of a plant expansion that, when done, will give us three lines. CAESARSTONE: We do not divulge those details.

LG production facility, Adairsville, Ga.

Caesarstone production facility, Richmond Hill, Ga..

Spectrum Quartz production facility, Latta, S.C.

TREND Group production facility, Sebring, Fla.

Editor's note: We did not receive a response for our questions from U.S. quartz-surface producers American Quartz Group Inc. (site in Barstow, Calif.); Cambria Company LLC (plant in LeSueur, Minn.); Guidoni USA (site in McRae-Helena, Ga.); USA Quartz (plant in Jacksonville, Fla.).Dal-Tile (plant in Dickson, Tenn.) refused to participate.