2020: The Year in Review for Hard Surfaces

K. Schipper and Emerson Schwartzkopf take a look back at the top news in hard surfaces this year, with follow-up reporting to bring everything up to date as 2020 winds down.

This edition of Radio Stone Update is underwritten by TISE LIVE, the industry online event offering attendees the opportunity to connect and preview floor covering, stone, and tile products while enjoying creative, immersive experiences. Go to tiselive.com for more information..

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.

Transcript

This edition of Radio Stone Update is underwritten by TISE LIVE, the industry online event offering attendees the opportunity to connect and preview floor covering, stone, and tile products while enjoying creative, immersive experiences. Go to tiselive.com for more information.

K. SCHIPPER: Hi, I’m K. Schipper.
 
EMERSON SCHWARTZKOPF: And I’m Emerson Schwartzkopf, and we’re both here this week to bring you a special 2020 year-end wrap-up from Radio Stone Update.

K.: When people think of 2020 and lung disease, the first thing that’s bound to come to mind in COVID-19. But, for those in the stone industry, 2020 shed plenty of light – and a little hope – on another scourge: silicosis.

First, the bad news. A Spanish study that appeared in July in CHEST, the official publication of the American College of Chest Physicians, shows that the conditions of stone workers continued to worsen over nine years after they had quit dry cutting of materials with crystalline silica.

Of the 106 men, with an average age of 36 and an average of 12 years on the job, seven entered the study with Progressive Massive Fibrosis or PMF, which can lead to lung failure and require a lung transplant. Follow-up exams showed that number had grown to 33.

The study, entitled Artificial Stone Silicosis Rapid Progression Following Exposure Cessation, came as Spain made significant steps to end dry cutting.
 
 Another country that’s taking a serious stand against silicosis is Australia, which established a National Dust Disease Taskforce that began meeting in August of last year. The goal of the taskforce is to develop a national approach to the prevention, early identification, control and management of occupational diseases in Australia.
 
 Parts of that country have seen an emerging trend of new cases of accelerated silicosis, particularly in the manufacture and installation of engineered stone countertops. The Australian government committed $5 million to support the taskforce, which established a National Dust Diseases Register, as well as new research.
 
 At the end of last year, a preliminary study estimated about 350 stone fabricators in Australia suffered from silicosis. Dr. Graeme Edwards, a member of the taskforce, initially estimated as many as one in three people who fabricated quartz countertops for at least three years had the disease, although he’s subsequently cut that to one in four. Responding to calls to ban the material, he says there are ways to handle it safely. The taskforce is scheduled to make a final report by mid-summer 2021.
 
 If there’s one bit of good news in all this, it’s that a pair of Australian doctors believe they may have found a cure for silicosis, at least if caught in the early stages. The procedure involves washing the lungs out with salt water, a treatment that has been used in some other lung diseases. While the patient is sedated and breathing through one lung, the other is flushed repeatedly. The doctors report the fluid starts out pretty dirty but gets cleaner as the process continues. The rinsing removes silica crystals from the lungs of the patients, and it only requires an overnight hospital stay.
 
EMERSON:  Unfair-trade investigations regarding quartz surfaces and ceramic tile wrapped up late mid-year with good news – of sorts – for India and Turkey, and bad news for China.
 
 In May, the U.S. International Trade Commission, or USITC, found that quartz-surface producers in India and Turkey exported products to the United States at below-market value and received manufacturing benefits from government subsidies to further lower final costs.
 
 The total tariffs – the add-on cost assessed to the products’ import values at U.S. ports-of-entry – were set at less than eight percent.
 
 The tariffs involved separate rates for several companies. Some Turkish companies received a 7.56% tariff, while major Indian producer Pokarna Engineered Stone ended up with a rate of less than 4 percent.
 
 Those tariffs ended up being much, much lower than the estimates made by U.S. quartz-surface manufacturer Cambria Company LLC when it petitioned the USITC in May 2019 claiming unfair-trade practices by the two countries. At that time, Cambria alleged dumping margins of 344.11% with products from India and 89.38% on Turkish quartz goods.
 
 The USITC cited China on the same unfair-trade grounds last year with quartz surfaces tariffs, on average, of more than 300%, which all but stopped exports of China’s quartz surfaces to the United States. Chinese production flooded other countries as a result and was acknowledged by Israeli manufacturer Caesarstone in affecting its sales in Australia and Canada.
 
 The tariff shock continued for Chinese goods in June, when the USITC finalized massive unfair-trade tariffs on ceramic tile, including porcelain. Those surfaces made or shipped from China now face a 562 and a half percent add-on to import values, effectively halting shipments to the United States.
 
 The USITC’s tariff order also specifically includes, by name, ceramic slabs and panels.
 
 The action came after an investigation spurred by a petition filed in 2019 by Coalition for Fair Trade in Ceramic Tile, a group of U.S. ceramic-tile producers including American Wonder Porcelain; Crossville Inc.; Dal-Tile Corp.; Del Conca USA Inc.; Florida Tile Inc.; Florim USA; Landmark Ceramics; and StonePeak Ceramics.
 
 Talk of tariffs of a different sort popped up at years end with a new target: Vietnam. The U.S. International Trade Representative’s office will hold a virtual public hearing next week concerning a blanket 301 tariff on all goods from Vietnam – including all hard surfaces – on allegations of currency manipulation by the country’s state bank.
 
 There is no timetable on a possible decision on a 301 tariff on Vietnam, and whether any action would continue under the incoming Biden administration next month. 301 tariffs were the major weapons used by the Trump administration to impose 25% duties on all Chinese goods, escalating the current U.S-China trade war.
 K.: The saying “The show must go on,” took a beating this year as the COVID-19 pandemic did a number on the scheduling of tradeshows worldwide. While show organizers touted the idea of virtual tradeshows and met with varying degrees of success, it isn’t quite the same as jetting off to Italy, China, or even Las Vegas. Still, there’s a lot of optimism that in-person shows will return in 2021.

One of the first shows to be delayed, then canceled for 2020 was the Xiamen International Stone Fair. Set for last March at a time when China was still in full battle mode against the coronavirus, the world’s largest hard-surfaces event was moved first to June, then October before organizers opted to try again this coming May. In the meantime, more than two thousand manufacturers from 57 countries and regions have participated in the Cloud Xiamen Stone Fair.

Other international shows also suffered. Marmomac 2020 canceled its late September in-person event, opting to host the online Marmomac Restart Digital instead. CERSAIE, the international tile trade event typically at the same time as Marmomac, initially rescheduled its Bologna-based event, until mid-November before throwing in the towel entirely. Both events anticipate being back with live shows in the fall of 2021.

Because of their late-in-the-year timing, there’s more optimism about the Italian shows than those scheduled for early 2021. Because of its February date, Brazil’s Vitoria Stone Show was among the few 2020 shows not impacted by COVID-19. Recently, organizers let potential attendees know that they weren’t confident they could be kept safe and rather than conduct a 2021 show, they will try again in 2022.

The same fate befell both the London-based Natural Stone Show and Hard Surfaces 2021, and the Nuremburg, Germany-based Stone+tec. Organizers of both shows recently announced cancelation of next year’s events, pinning their hopes on a massive vaccination program so they can return in 2022.

A U.S. show that also dodged the COVID bullet this year by dint of its January scheduling promises to be back at its usual spot in Las Vegas in 2021 – but not in January. The International Surface Event – TISE – will now be June 15-17 at the Mandalay Bay Convention Center. For those in the industry who can’t wait that long, organizers will also present TISE LIVE, an interactive event focused on the future of the floor covering, stone and tile surfaces industry on Jan. 26-28.

Also running a bit later next year will be Coverings 2021, with a move from mid-April to July 7-9 at the Orange County Convention Center in Orlando, Fla. Attendees are expected to find the show a bit more compact than in previous years, with expanded hours through three days.

EMERSON: The hard-surfaces industry began 2020 on a harsh note when Clio Holdings LLC, a multi-state operator of 17 fabrication companies, suddenly closed its doors on January 3 without giving a warning – or a final paycheck – to more than 1,100 employees. Less than two weeks later, on January 15, the company filed bankruptcy in Delaware, opting for a Chapter 7 liquidation instead of a Chapter 11 reorganization.
 
 Clio Holdings, founded in 2016, quickly became a large player in stone fabrication and installation by purchasing established companies such as Top Master of Kansas City, Kan., Solid Surfaces Inc. in Rochester, N.Y., US Marble in Remus, Mich., and Premier Surfaces Inc. in Alpharetta, Ga. US Marble retained its corporate ID, while all other companies adopted the Premier Surfaces brand.
 
 When all of Clio’s facilities closed on Jan. 3, company management only told its employees – via email – that – quote “The decision was made by the Board and Management after careful consideration of all options.” Unquote.
 
 When the company began filing bankruptcy documents, however, the reason became clear – Clio was seriously underwater financially. The company produced a 332-page-long list of creditors, and the largest two – a banking consortium and a private-equity lender – had first dibs with a combined debt of more than $31.5 million.
 
 Earlier this year, the bankruptcy court approved sales of parts of Clio to repay debtors, including
 
 • The Kansas City-based operations to KC Solid Surfaces in Riverside, Mo.i;
 
 • The Rochester and Buffalo assets to New York Surfaces of Rochester;
 
 • The U.S. Marble assets in Remus, Michigan and Johnson City, Tennessee, to Prock Operations of Saint James, Mo.;
 
 • And, the Georgia assets, including all tradenames, websites and domain names used by Premier Surfaces, to Surface Providers Inc. of Cumming, Ga.
 
 The sales, however, didn’t even come close to providing 10% of the total claims against Clio.
 
 A class-action suit seeking a priority claim to compensate former Clio employees, due to the sudden company closure, is still pending in bankruptcy court.
 
K.:  Polycor Inc. acquired North Carolina Granite Corporation in December.  The Mount Airy, N.C.-based company is known primarily for White Mount Airy Granite® from what is now considered the world’s largest open-faced quarry some 60 miles north of Charlotte. 

The site also includes one of the world’s largest curb-manufacturing facilities, along with the second-largest U.S. factory for the production of thin building-façade panels.

EMERSON: LG Hausys expanded its North American Viatera® quartz-surface operations early in 2020, with a new manufacturing line in Georgia, along with a new warehouse and showroom in Southern California.
 
 The new Viatera line is the third now in operation at LG Hausys’ manufacturing location in Adairsville, Ga. The new facility spans more than 111,000 ft² and increases Viatera production capacity by 50%. 
 
 Supporting the manufacturing expansion is the addition of a new 48,000 ft² warehouse and showroom in Placentia, Calif. The warehouse will serve as the primary distribution hub for Viatera and LG Hausys’ solid-surface product brand, HI-MACS.
 
K.: Caesarstone Ltd. will augment its quartz-surfaces production later this year with porcelain slabs after acquiring a majority stake of Indian producer Lioli Ceramica. The cash and debt-assumption deal, with a total value of 34 million dollars, was finalized in mid-October.

Lioli operates a fully automated, thirty million euro slab-production factory in Morbi, India, capable of producing more than 100,00 square feet of product daily. Caesarstone CEO called the deal a major step in becoming a multi-material player in the global countertop industry.

EMERSON: A jury convicted Radee Prince in November of killing three co-workers and injuring two others during a mass shooting three years ago at a Maryland fabrication shop.

Prince opened fire with a semiautomatic handgun as fellow workers at Advanced Granite Solutions in Edgewood gathered around him early in the workday of October 17, 2017. Three co-workers died and two survived. All five were shot in the head.

K.: Both Neolith and Dekton® now qualify as carbon-neutral products.

Neolith announced its green status for the sintered stone in June, noting that it recorded no net release of carbon dioxide into the atmosphere in 2019, recycles 90 percent of its waste, and receives all of its electricity from renewable energy sources.

Ultra-compact surface Dekton, produced by the Cosentino group, noted in late September that it reduced its greenhouse gas emissions and invested more than three million euros in manufacturing improvements and optimizations.

EMERSON: Scott McLendon stepped in as the new CEO of Pearlman Group, the leading U.S. developer and specialty distributor of supplies, tools and equipment for hard-surface fabricators in mid-May, succeeding outgoing CEO Dan Davidenko.

Pearlman, headquartered in Norcross, Ga., distributes products for hard-surface fabrication through its primary brands of GranQuartz, Regent, Granite City Tool and Pearl Abrasive.

K.: Nancy Busch became the new executive director of the International Surface Fabricators Association on Aug. 3, succeeding Amy Miller, who stepped down from the position earlier in the summer.

Busch worked for 14 years for Willis Supply, the Burlington, Ontario-based North American distributor of building materials, including Corian® Solid Surface and Corian® Quartz, Prior to her work with Willis, she was an independent kitchen & bath designer, earning an NKBA Associate Kitchen and Bath Designer certification.

EMERSON: Salem Distributing Company Inc. evolves into Salem Fabrication Technologies Group Inc., with the name change representing the company across all of the industries in which it offers machinery, tools, supplies, equipment and services.

A new division, Salem Fabrication Suppliers, will offer tooling, surfacing supplies and equipment solutions for the glass industry. The new division includes what was SALEM Stone before the restructuring.

K: I’m K. Schipper for Radio Stone Update and we’ll see you here again soon.