10 Questions With ....
Getting to Coverings this July wasn’t easy for anyone, with pandemic restricions and Hurricane Harvey making travel all-the-more difficult. Just making the journey from Brazil proved to be an accomplishment – let alone making an inaugural appearance. And yet “It’s Natural – Brazilian Natural Stone” managed to do just that, with its first presentation at the North American stone-and-tile event. The exhibit area brought together 25 stone exporters with the ability to interact with attendees and present their portfolios. “It’s Natural” is the result of a partnership signed between the Brazilian Center for Dimension Stone Exporters (Centrorochas) and the Brazilian Export and Investment Promotion Agency (Apex-Brasil ) to promote the Brazilian ornamental-stone market abroad. Coverings provided some success in attracting clients; 42% of attendees visiting "It's Natural" belonged to stone-distribution chains Trade shows provide opportunities, but it’s the day-to-day health of the Brazilian hard-surface industry that will fuel the success of the U.S. market. Stone Update reached out through Apex-Brasil to find out more … and Fabio Cruz, vice president of Centrorochas, provided some insight.
How does the volume of hard surfaces (natural stone, quartz-slab, ceramic) exported by Brazil now compare to two years ago, before the pandemic hit?
CRUZ: Since the beginning of the pandemic, the volume of hard surface materials exported to the U.S. from Brazil has actually increased, in spite of supply chain blockages and container shortages on a global scale. In the first half of 2021 alone, Brazilian export of stones to the U.S. grew 48%, almost doubling from the same period in 2020. During this same period of time, exports of ceramic tiles to the United States grew 16% in volume. When looking at these numbers, it’s safe to say that compared to two years ago, Brazilian hard surface exports have grown substantially in volume.
What kind of growth do you foresee in the next two years?
CRUZ: We foresee that Brazilian stones and ceramics will continue to gain popularity worldwide. In the U.S. specifically, the growth of the housing and construction market is going to have a positive effect on our industry, especially when considering that by the end of 2021, the U.S. construction sector is expected to have grown 15.6% YoY. In the face of this kind of demand, it makes sense that U.S. companies and builders will continue to look to Brazil for hard surface materials – such as Santa Cecilia, Ubatuba, and Classic White Quartzite – that are primarily sourced from our country and are popular options for kitchens, bathrooms and other uses throughout American households.
Give us some indications of export growth for different hard-surface materials.
CRUZ: As mentioned previously, in the first half of 2021 alone, Brazilian export of stones to the U.S. grew 48%, almost doubling from the same period in 2020. From January to June of 2021, Brazil exported US $349,973,424 worth of stones to the U.S., compared to US $236,471,271 in the same period in 2020. This translates to 437,012 tons of exports to the U.S. during this period of time against 346,586 tons sent last year. In addition, exports of ceramic tiles to the U.S. grew 16% in volume from January to June of 2021. In fact, Brazil’s exports of ceramic tiles in the first half of the year reached record highs not seen since 2011 – and the U.S. was the main destination for these supplies. In total, 10.3 million square meters of ceramic tile have been exported to the U.S. since January 2021, equivalent to US $50.6 million dollars
With natural stone, is there still more growth in demand for quartzite than for granite?
CRUZ: Markets around the world are differentiated by their preferences for ornamental stones. And even within a particular market, there may still be specific niches that offer different rock and finish choices. Although there is a solidified and growing demand for granites worldwide, quartzites are experiencing an even greater demand curve largely from higher economic classes that are contracting high value architectural projects. Quartzites are very important to Brazil because of their high added value – this is reflected in the country’s export figures – and the opportunity the material provides for Brazil to become a world player in the special stones sector.
Is the United States still the primary market? How much does the United States receive of total Brazilian hard-surface exports?
CRUZ: The United States is the main destination for Brazilian ceramic tiles. In fact, exports of ceramic tile to the United States represent 22.5% of Brazil’s total export revenues. As mentioned above and in terms of specific export numbers, Brazilian export of stones to the U.S. grew 48% in the first half of 2021 while exports of ceramic tiles to the U.S. grew 16% in volume.
Travel is nowhere back to “normal” internationally and regionally. What are you doing differently in promoting and assisting Brazilian hard-surface exports?
CRUZ: We have been leveraging all online tools at our disposal to help reach key audiences during this time. Our website, for example, is a resource for international investors that are interested in learning more about Brazilian exports of these materials. In addition, we have partnered with Brazilian organizations that assist us in reaching a wider U.S. audience.
For example, we currently have a strategic partnership with Apex-Brasil, the Brazilian Trade and Investment Promotion Agency. Through Apex-Brasil, we have access to the latest trade and export intelligence, which allows us to better prospect business and exporting opportunities in the United States.
Hard surfaces come from many places to the United States. How do you plan to make Brazil’s products stand out in the U.S. market?
CRUZ: Thankfully, due to Brazil’s unique geological makeup, our products already stand out. Although many countries do export hard surfaces to the U.S., Brazilian stones and ceramics are distinctive for their quality and diversity. In total, ornamental rocks from Brazil can be composed of more than 1,200 varieties of materials – the country also offers uniquely colored stones and granite you’d be hard pressed to find anywhere else. .
In addition, Brazilian producers in the hard-surfaces sector – who are undoubtably experts of the trade – have invested in quality, design, market intelligence and technology in order to stand out on a global scale.
Will the natural-stone flow to the United States remain with slab shipments, or will there be efforts to develop value-added products such as pre-cut pieces?
CRUZ: We consider the sale of rocks through finished and cut products the natural evolution of the sector in Brazil. While we started by only exporting blocks, today Brazil is one of the top suppliers of polished sheets in the world.
Even though large distributors are important commercial partners, we plan to take actions in this market that will increase the growth of demand for rock materials that are already finished or ready for application. We believe this will increase the profitability of Brazilian companies.
How is the shipping situation in getting products from Brazil to the United States? Is there a backlog? Are shipping costs still going up, leveling off, or going down?
CRUZ: Like in other countries, Brazil’s hard-surface industry felt the initial impact of the pandemic on the supply chain. However, Brazil has a logistical advantage due to its preexisting infrastructure, which allowed shipping volume to bounce back quickly. Take, for example, the fact that the Brazilian state of Espírito Santo is responsible for more than 80% of stone exports from the country, allowing for smoother domestic and international transit of materials through the state’s ports. Through the assistance of supply chain advantages such as these, Brazil was able to improve export efficiency during the pandemic, which also allowed the country to keep shipping prices low for international buyers.