Caesarstone reports another quarterly loss; Portobello Group opens Tennessee facility; and a special interview with StoneMart 2024 organizers and sourcing direct from India.
Radio Stone Update is presented on the first and third Wednesdays every month at 9 a.m. everywhere on Earth with the latest news and insights in hard surfaces. Check our archives at www.radiostoneupdate.com.
Caesarstone reports another quarterly loss; Portobello Group opens Tennessee facility; and a special interview with StoneMart 2024 organizers and sourcing direct from India.
Radio Stone Update is presented on the first and third Wednesdays every month at 9 a.m. everywhere on Earth with the latest news and insights in hard surfaces. Check our archives at www.radiostoneupdate.com.
K. Schipper: Hi, I’m K. Schipper with the latest in hard surfaces industry news from Radio Stone Update.
Emerson Schwartzkopf: And this is Emerson Schwartzkopf, editor of Stone Update Magazine. I’ll be presenting a special section on StoneMart India 2024 later on in this broadcast. For now, though, here’s K. with the news.
0:42
Schipper: Caesarstone Ltd. reported a net loss of $887,000 for this year’s third quarter. The amount is almost doubled from the same period last year.
Company officials cited weakness in revenues from the United States – the company’s largest market – plus other global economic issues for the depressed numbers. They also cited the company’s strong cash position and cash flow as positives, although bottom-line sluggishness is expected to continue through the rest of 2023.
Global third-quarter revenues of $142.3 million for the Israeli surfacing company represented a 21.2 percent decline from third quarter 2022. The biggest regional revenue drop came from the United States, with this year’s third quarter $65.8 million dropping 25.3 percent from the same time last year. The U.S. market represents 46 percent of Caesarstone’s revenue.
Nahum Trost, the company’s CFO, attributed the decrease to softer global conditions, particularly in the North American renovation and remodeling market, as well as higher interest rates. Trost also said sales were impacted by the competitive landscape for quartz products. He added that the impact of softer residential sales has been more pronounced in the second and third quarters of this year.
The U.S. wasn’t alone in showing a decline in Caesarstone sales in the third quarter. Australia, Caesarstone’s second-largest market, reported third quarter revenues down 12.7 percent from the same time last year. Canada, it’s third largest regional market, declined 19.7 percent from last year’s third quarter with revenues of $18.9 million.
Yos Shiran, company CEO, said that Caesarstone remains in a strong cash position, as the company works to restructure. He added that the company will continue to invest in U.S. marketing, especially in sales channels such as kitchen-and-bath and stone suppliers.
Caesarstone has announced plans to lower its inventories with a target of a 100-day supply. The company will also include more third party-produced materials in its product flow. Caesarstone started the year with 20 percent of sales with partner-produced products. That’s expected to increase to 50 percent in 2024.
Shiran also addressed the situation of engineered stone in Australia, where regulators have advised a ban on the material. He said regardless of the government decision Caesarstone will work diligently with its Australian team to maintain market share in that country.
The current Israel-Hamas conflict has also put uncertainty on Caesarstone’s home-country market. Shiran said the company is taking necessary steps to ensure business continuity and has not experienced any material impact to its Israeli production operations. The company plans to contribute 2,000 countertops to help rebuild properties in Israel affected by the attacks.
3:55
Portobello America opened its new manufacturing plant in Baxter, Tennessee, in mid-October. The Brazilian tile producer hosted more than 500 guests from around the world as it opened its 986,000 ft2 cutting-edge facility.
Cesar Gomes Jr., chairman of the board of directors of Portobello Grupo, said, “This facility was developed to meet the needs of American distributors. We have built a factory not for mass production, but for flexibility.”
Attendees began their factory visit at the interactive 10,000 ft2 showroom and state-of-the-art design lab. Guests also received an exclusive preview of Portobello America’s new 2023 Fall Collection and its new floor and wall tile portfolio, designed exclusively for the American market. Guided tours also showed the facility’s latest advancements, from production to packaging in tile manufacturing throughout Portobello’s factory.
Portobello Grupo is a publicly traded company, part of the Novo Mercado Bovespa since 2008. In started its production activities in 1979 and is now one of the largest ceramic-tile manufacturers in the world.
Schwartzkopf: International trade in hard-surfaces is building back to pre-COVID levels, including the ability to travel worldwide to trade events. One that’s coming up soon is StoneMart 2024, being held in Jaipur, India, in early February … and organizers are looking to attract more attention from the United States.
6:19
StoneMart is offering some incentives for buyers to attend, and I’ll get to that in a few minutes. But first, here’s some background on the event: it’s held every two years, and the last edition drew 30,000 attendees. More than four hundred came from more than 40 countries, including the United States.
And the interest in next February’s event continues to increase, according to Sudhir Kumar Sharma, managing director of RICCO, the Rajasthan State Industrial Development And Investment Corporation.
Sharma: The response is very good and encouraging. We have gotten inquiries from all over the world and we expect 20% more visitors as well as exhibitors for the next StoneMart.
Schwartzkopf: Sharma also noted that StoneMart’s exhibitor mix is evenly split between materials and machinery/tooling categories.
Sharma: Both are at 50 percent, but nothing much changed since last year
Schwartzkopf: It’s also an event that focuses on natural stone, according to Rakesh Gupta, vice chairman for the Centre for the Development of Stones, or CDOS.
Gupta: Mainly natural stone. This is a fair for the natural stone. Those who are participating are in natural stone.
Schwartzkopf: Stone vendors will be looking to increase their reach internationally, including an ever-strengthening regional market, Gupta notes.
Gupta: We know Vietnam is a very good market. Cambodia, a lot of Asian countries are developing at this stage. So the people are crazy for the Asian countries they are ready to buy the Indian granite and marble. The new market will be these Asian countries.
Schwartzkopf: Of course, there’s the big market in the United States. Gupta says it’s one where India still sees plenty of potential to gain on other international competitors.
Gupta: But now, the Indian market is a very developing. I also have quartz and granite factory and most of the material is going to US, also we are capturing market from Brazil and Italy. So after five or 10 years, we will have 50% more market share than Brazil & Italy.
Schwartzkopf: That’s a point that’s amplified by Mukul Rastogi, the chief executive officer of CDOS.
Rastogi: I would like to add something to it. Basically as you know India is endowed with all types of stones wheat like marble, granites, Sandstone and slate, phyllite, serpentine, etc etc. So, we present a number of varieties as well as finishes as well as material from India and that ithere are many new exotic materials which have come up in the last two three years’ time. So, those materials would definitely catch the attention of overseas buyers who are coming to StoneMart next year.
Schwartzkopf: International business – especially for fabricators looking to buy materials directly – can be a formidable task. But, there’s also help available from one of StoneMart’s co-sponsors, the Federation of Indian Chambers of Commerce and Industry, or FICCI. Manish Singhal, FICCI deputy executive director, explains.
Singhai: FICCI is an industry body and like some of the companies you are seeing here, there are many other companies who are not only our members; but, through partners like CDOS, we also reach out to the entire industry in India. So, if there are companies in U.S. or anywhere in the world interested in connecting with a particular type of suppliers for certain types of stone, we can reach out to that network much faster rather than buyers sitting overseas and trying to find that, you know, “Where do I go to find this particular type of stone?
You can see here on display, there are 34 companies at Verona, Indian companies at Verona. So they are displaying a lot of those varieties already. So the whole of the western market now will look at India for supplies.
Schwartzkopf: StoneMart offers the opportunity to explore the natural-stone market in India, Rastogi adds, and learn about new material and new sources.
Rastogi: I think that as I said, like, there are many new varieties which have come up. So the buyers or the fabricators in U.S. they are on the lookout for new materials, new varieties, new colors. So now we have many new varieties in granite as well as in quartzite also. So I think that is one of the area where the US buyers will find it very attractive as far as sourcing material from India is concerned.
Schwartzkopf: StoneMart also offers a real incentive to attend with its Hosted Buyer Program, which takes care of most on-site needs. An interested attendee will need to take care of the airfare to Jaipur and meals while there, and the program supplies:
Three hotel nights in Jaipur
Pickup and transfers to and from the airport and to the event site in Jaipur
Seven to eight fixed business-to-business meetings daily
Free WiFi and interpreter serices
And more
FICCI, an event co-sponsor, is coordinating the program. You can learn mare by contacting Ajit Samra by email at a-j-i-t-at-f-i-c-c-i-dot-com, or calling country code 91 and then 995-322-5379.
And if you plan to go – I’ll see you there.
12:28
K. Schipper: Moderno Porcelain Works held a grand opening for its newest location in Nashville in late October. The Nashville facility marks the 15th location in the United States for Moderno as part of a national expansion effort by the large-format porcelain-slab fabrication company.
Roberto Contreras, CEO of Moderno Porcelain Works, says the company’s vision is to establish a nationwide network of fabricators and installers exclusively dedicated to large-format porcelain and sintered stone materials. He believes the increasing demand for these materials has been held back by the absence of specialized fabrication and installation expertise, a gap Moderno expects to fill.
The new location includes a 2,335 ft2 showroom showcasing numerous applications of porcelain and sintered stone. A state-of-the-art fabrication area encompasses 15,281 ft2.
Along with the Nashville location, Moderno Porcelain Works has locations in Atlanta; Austin, Texas; Charlotte, N.C.; Dallas; Denver; Houston; Los Angeles; Minneapolis; Orlando, Fla.; Phoenix; San Diego; Sacramento, Calif.; Sunrise, Fla.; and Tampa, Fla. Moderno Porcelain Works will soon open additional locations in San Antonio, Texas; and Mobile, Ala.
In other industry news….
14:04
Franklin, N.J.-based Alpha Professional Tools® announces the hiring of Alexander Makin to represent the company in the southwestern U.S. Makin will service clients in Arizona, Colorado, New Mexico, southern Nevada, Texas and Utah.
Makin has more than 25 years in the industry, beginning as a stone fabricator in Louisiana. He later relocated to Colorado, where he supervised a large stone shop with more than 120 employees offering granite, marble, and quartz countertops to customers across the state. He can be reached at amakin@alpha-tools.com
14:48
And, Antolini Luigi has recently inaugurated a photovoltaic solar-panel system on its headquarters building near Verona, Italy. The system, developed by Alperia, covers a total area of 17,525 yds2, and will output almost 3.4 million kWh per year. The system should produce enough electricity to cover most of the company’s energy needs.
Company CEO Alberto Antolini calls the system just the beginning of the operation’s sustainable effort. The system is expected to avoid the release of 1,261 tons of CO2 into the atmosphere per year, or the equivalent of what could be absorbed by more than 2,000 trees.
Remember, the November-December issue of Stone Update Magazine will be available next week at www.stonemag.com. For a transcript of this broadcast, go to www.radiostoneupdate.com. For Radio Stone Update, I’m K. Schipper, and we’ll see you here again soon.