ANALYSIS OF ANALYSIS OF PAKISTAN PAKISTAN

INDUSTRIESINDUSTRIES

MARBLE AND GRANITEMARBLE AND GRANITEINDUSTRYINDUSTRY

Prepared by:Prepared by:SEHRISH KAPADIASEHRISH KAPADIAAYESHA JAWAIDAYESHA JAWAID

BEENISH MUDABIRBEENISH MUDABIRALKARIM VAYANIALKARIM VAYANI

AGENDAAGENDAINTRODUCTIONINTRODUCTIONHISTORYHISTORYIMPORTANCE & USESIMPORTANCE & USESWORLD SCENARIOWORLD SCENARIOPAKISTAN SCENARIOPAKISTAN SCENARIOIMPORTS AND EXPORTSIMPORTS AND EXPORTSPROBLEMSPROBLEMSGOVT. POLICIES AND STEPSGOVT. POLICIES AND STEPSFUTURE PROJECTIONSFUTURE PROJECTIONSCONCLUSIONCONCLUSIONRECOMMENDATIONSRECOMMENDATIONS

INTRODUCTIONINTRODUCTION

Marble is a crystalline, compact variety Marble is a crystalline, compact variety of metamorphosed limestone, consisting of metamorphosed limestone, consisting primarily of calcile (CaCO3), dolomite (CaMg primarily of calcile (CaCO3), dolomite (CaMg (CO3)6) or a combination of both minerals.(CO3)6) or a combination of both minerals.

Granite is igneous rock of visible Granite is igneous rock of visible crystalline and formation and texture. It is crystalline and formation and texture. It is composed of feldspar (Usually potash composed of feldspar (Usually potash feldspar and oligoclase) and quartz with a feldspar and oligoclase) and quartz with a small amount of mica (biotite and muss small amount of mica (biotite and muss covite) and monor accessory minerals. covite) and monor accessory minerals.

MARBLE IMAGES MARBLE IMAGES

HISTORYHISTORY

Marble and Granite has been mined and cut Marble and Granite has been mined and cut for centuries.for centuries.

Mass production was introduced in the 20Mass production was introduced in the 20thth century.century.

In 1960’s, mines development was initiated In 1960’s, mines development was initiated in Europe.in Europe.

The stone industry registered an annual The stone industry registered an annual growth rate of 13.3% since late 70’s.growth rate of 13.3% since late 70’s.

WORLD’S TOTAL PRODUCTION SINCE 1970’sWORLD’S TOTAL PRODUCTION SINCE 1970’s

YEARYEAR MARBLE MARBLE 000 TONS000 TONS

GRANITE GRANITE 000 TONS000 TONS

19761976

19861986

19961996

19971997

20022002

1360013600

1313013130

2645026450

2765027650

50 MILLION50 MILLION

34003400

73857385

1762517625

1935019350

N.AN.A

HISTORYHISTORY (cont:)(cont:)

In Pakistan, this industry started to develop in the In Pakistan, this industry started to develop in the last 60’s without any quality consideration.last 60’s without any quality consideration.

At that time, most of processing equipment was At that time, most of processing equipment was locally made at Gujranwala and Lahore.locally made at Gujranwala and Lahore.

In mid 70’s, few plants were imported from Italy, In mid 70’s, few plants were imported from Italy, but were 2but were 2ndnd generation plants and had no quality generation plants and had no quality consideration.consideration.

During late 70’s, few large projects and wealthy During late 70’s, few large projects and wealthy private housing clients brought imported granite private housing clients brought imported granite tiles and introduced quality in Pakistan.tiles and introduced quality in Pakistan.

In last decade, very few units were established in In last decade, very few units were established in accordance with international standards.accordance with international standards.

World scenarioWorld scenario

Dimensional stone are produced in more Dimensional stone are produced in more than 42 countries of the world while 12 of than 42 countries of the world while 12 of these producers are dominant in the these producers are dominant in the international market i.e. European countries international market i.e. European countries and 3 from Asia and Africa. and 3 from Asia and Africa. A major part of production is consumed A major part of production is consumed locally by the producing countries.locally by the producing countries.Today, World’s total production is Today, World’s total production is approximately 65 million tons and approximately 65 million tons and consumption is estimated $40 Billion per consumption is estimated $40 Billion per year.year.Italy is the world leader in marble, granite Italy is the world leader in marble, granite and other stone sector. It is leading with and other stone sector. It is leading with 17% of the total worlds production.17% of the total worlds production.

World scenario World scenario (Cont:)(Cont:)

Almost 50% of the world’s marble output is Almost 50% of the world’s marble output is consumed in the Middle East , Far East and consumed in the Middle East , Far East and European countries ; therefore, there is a European countries ; therefore, there is a great demand for marble in these regions.great demand for marble in these regions.The international marble & granite trade is The international marble & granite trade is marked $3.5 billion or 1.987 million tons in marked $3.5 billion or 1.987 million tons in 2002-03 (Pakistan’s share was only 0.047 2002-03 (Pakistan’s share was only 0.047 million tons i.e.2%).million tons i.e.2%).India has been the main exporter of marble India has been the main exporter of marble granite for the five years. It capture 15.2% of granite for the five years. It capture 15.2% of the world’s total export.the world’s total export.Italy has been the largest importer of Italy has been the largest importer of marble and granite for the five years. It marble and granite for the five years. It accounted for 39.4% of the total imports.accounted for 39.4% of the total imports.

WORLD’S MAJOR EXPORTERS & WORLD’S MAJOR EXPORTERS & IMPORTERSIMPORTERS

COUNTRIESCOUNTRIES 20002000 20012001 20022002 % Share % Share 20022002

ITALYITALY 350.4350.466

344.4344.488

323.5323.599

39.439.4

CHINACHINA 100.4100.499

112.4112.477

155.8155.822

19.019.0

SPAINSPAIN 100.1100.111

97.6097.60 102.8102.855

12.512.5

JAPANJAPAN 83.0483.04 81.1381.13 92.3892.38 11.311.3

MAJOR EXPORTERSVALUE IN $ MILLION

COUNTRIESCOUNTRIES 20002000 20012001 20022002 % Share % Share 20022002

INDIAINDIA 102.6102.666

99.5899.58 106.5106.555

15.215.2

NORWAYNORWAY 77.0277.02 80.8880.88 86.5486.54 12.412.4

ITALYITALY 59.2159.21 60.9860.98 63.4263.42 9.19.1

CHINACHINA 54.0454.04 52.4252.42 51.3751.37 7.37.3MAJOR IMPORTERSVALUE IN $ MILLION

PAKISTAN SCENARIOPAKISTAN SCENARIOPakistan’s marble and granite sector is Pakistan’s marble and granite sector is in its nascent stage of development.in its nascent stage of development.The country is currently mining 40 types The country is currently mining 40 types of natural color marble and also dying of natural color marble and also dying the marble in various colors.the marble in various colors. Marble, combined with granite is Marble, combined with granite is included in the list of sixth largest included in the list of sixth largest minerals extracted among coal, chromite, minerals extracted among coal, chromite, rock salt, limestone, china clay, dolomite, rock salt, limestone, china clay, dolomite, fire clay, gypsum, silica and etc.fire clay, gypsum, silica and etc.Since 1990 mining and quarrying has Since 1990 mining and quarrying has consistently contributed 0.5% to the consistently contributed 0.5% to the gross domestic product.gross domestic product.It is providing job opportunity to more It is providing job opportunity to more than 40000 people.than 40000 people.

PAKISTAN SCENARIOPAKISTAN SCENARIO

According to estimates, there are 160 million According to estimates, there are 160 million tons of marble and more than 414 million tons of tons of marble and more than 414 million tons of granite reserves in the country.granite reserves in the country.158 million tons of marble reserves are found in 158 million tons of marble reserves are found in NWFP. NWFP. The process of extraction of marble and granite The process of extraction of marble and granite is very out dated and obsolete. We still use is very out dated and obsolete. We still use explosives to blast the blocks resulting not only explosives to blast the blocks resulting not only in a high wastage (up to 73%), but also smaller in a high wastage (up to 73%), but also smaller stone size.stone size.There are 1600 units and 9 units for the There are 1600 units and 9 units for the processing of marble and granite, respectively.processing of marble and granite, respectively.There are only 25 to 30 units which have There are only 25 to 30 units which have appropriate machineryappropriate machineryMajority of units operated manually, which Majority of units operated manually, which causes high rate of wastage.causes high rate of wastage.

PAKISTAN SCENARIOPAKISTAN SCENARIO

Pakistan get only 1% share in world Pakistan get only 1% share in world total production.total production.

PRODUCTIOPRODUCTIONN

TONSTONS

1998-991998-99

1999-20001999-2000

2000-012000-01

2001-022001-02

2002-032002-03

2003-042003-04

2004-052004-05

412000412000

521000521000

542000542000

685000685000

11420001142000

3.3 3.3 MILLIONMILLION

5 MILLION5 MILLION

REGIONAL REGIONAL CONTRIBUTIONCONTRIBUTION

BALOCHISTAN:BALOCHISTAN:It has nearly 60 operational It has nearly 60 operational

mines. Total known reserves of marble are mines. Total known reserves of marble are around 2 million tons .i.e. 1.5% of total around 2 million tons .i.e. 1.5% of total reserves. It has only 60 small size units.reserves. It has only 60 small size units.

SINDH:SINDH: There are 15 operational mines. The There are 15 operational mines. The

estimated reserves are 1.5 million tons of estimated reserves are 1.5 million tons of marble & 1 million tons of granite. It has one marble & 1 million tons of granite. It has one large, 180 medium & over 600 small units large, 180 medium & over 600 small units working.working.

PUNJAB:PUNJAB: It has no contribution to this It has no contribution to this

sector, but more than 250 medium and sector, but more than 250 medium and small units are working.small units are working.

N.W.F.P:N.W.F.P:

There are158 million tons of There are158 million tons of marble reserves found in NWFP i.e.97% of marble reserves found in NWFP i.e.97% of total reservers.total reservers.

REGIONAL CONTRIBUTIONREGIONAL CONTRIBUTION (cont:)(cont:)

EXPORT EXPORT

Pakistani marble is being export to Pakistani marble is being export to more than 60 countries. more than 60 countries.

The 40 per cent export of the marble The 40 per cent export of the marble was in the shape of handicraft while, the was in the shape of handicraft while, the rest of 60 per cent in slabs and bricks rest of 60 per cent in slabs and bricks form.form.

The Exports amounted to approximately The Exports amounted to approximately $21 million in the fiscal year 2005-06, $21 million in the fiscal year 2005-06, showing an increase of 28% than 2004-showing an increase of 28% than 2004-2005 ( approx. $16.4 million).2005 ( approx. $16.4 million).

EXPORTEXPORT

COUNTRIECOUNTRIESS

2001-2001-0202

2000-2000-0101

BangladeshBangladesh 967967 10001000

ChinaChina 501501 415415

Hong KongHong Kong 386386 9393

ItalyItaly 670670 593593

Saudi ArabiaSaudi Arabia 196196 235235

USAUSA 17121712 23842384

Value in 000$

Major countries include Bangladesh, Major countries include Bangladesh, China, Hong Kong, Saudi Arabia, USA, China, Hong Kong, Saudi Arabia, USA, Italy, etc. Italy, etc.

IMPORTIMPORT

Pakistan only import the machine for Pakistan only import the machine for the process of mining, polishing and the process of mining, polishing and cutting etc.cutting etc.

Values Values in US $in US $

   19981998 19991999 20002000 20012001 20022002TotalTotal 26382638 28452845 33263326 30933093 29442944

%% 100100 100100 100100 100100 100100

ItaliaItaliann

SharShare e 438438 452.4452.4 66016601 606.7606.7 479.5479.5

%% 16.616.6 15.915.9 19.819.8 19.619.6 16.316.3

IMPORTANCE & USESIMPORTANCE & USES

It contributed in the GDP at a percent of It contributed in the GDP at a percent of 0.5% (2004-05).0.5% (2004-05).

It’s demand increases with investment in It’s demand increases with investment in construction sector.construction sector.

It is used in buildings, masjids, and homes.It is used in buildings, masjids, and homes.

It is also used in statues and monuments.It is also used in statues and monuments.

It create large number of jobs.It create large number of jobs.

It’s forward and backward linkages also It’s forward and backward linkages also provide jobs to many people, i.e. Non-provide jobs to many people, i.e. Non-Skilled; Semi-Skilled & Skilled LabSkilled; Semi-Skilled & Skilled Lab

PROBLEMSPROBLEMS1.1. Lack of proper machinery to produce quality Lack of proper machinery to produce quality

production.production.

2.2. Lack of awareness and facilitation in Lack of awareness and facilitation in selecting appropriate tools for different selecting appropriate tools for different tools.tools.

3.3. Untrained workers.Untrained workers.

4.4. Non existence of quality control prices.Non existence of quality control prices.

5.5. Poor raw material supply.Poor raw material supply.

6.6. Lack of distribution channels including raw Lack of distribution channels including raw material and finished goods warehousing.material and finished goods warehousing.

7.7. Incapability in supplying consistent product.Incapability in supplying consistent product.

8.8. Ineffective marketing strategy.Ineffective marketing strategy.

SWOT Analysis:SWOT Analysis:STRENGTHSSTRENGTHS

history & experiencehistory & experienceDiagnostic Study on Diagnostic Study on Marble Processing Marble Processing Cluster, Cluster, Rawalpindi/IslamabadRawalpindi/IslamabadSMEDA_UNIDO SMEDA_UNIDO Cluster Development Cluster Development Program 20Program 20Located in and Located in and around capital city of around capital city of Pakistan (relationship Pakistan (relationship with government and with government and foreign consulates) foreign consulates)

WEAKNESES:WEAKNESES:

In spite of being the In spite of being the largest cluster of largest cluster of Rawalpindi/Islamabad Rawalpindi/Islamabad region industry lacksregion industry lacksstimulus towards value stimulus towards value addition, and addition, and investment in high-investment in high-end machinery andend machinery andHuman Resource is Human Resource is minimal.minimal.disadvantaged in case disadvantaged in case of raw material of raw material availability availability transportation coststransportation costs

Cont…Cont…

Islamabad has lots of Islamabad has lots of planned construction planned construction area so local market area so local market is available.is available.Have 2 chambers of Have 2 chambers of commerce in the commerce in the vicinity.vicinity.The head office of The head office of APMIA is located in APMIA is located in the cluster that gives the cluster that gives national leadership national leadership to the cluster.to the cluster.

Comparatively Comparatively disadvantaged in case disadvantaged in case of investment portfolio of investment portfolio and costing structure if and costing structure if want to import squared want to import squared block from abroad.block from abroad. There is a 100% There is a 100% demand-supply gap of demand-supply gap of skilled labor in the skilled labor in the industryindustryThere is no waste There is no waste management policy or management policy or strategy or feasible strategy or feasible utilization of marble utilization of marble slurry.slurry.

SWOT Analysis:SWOT Analysis:

OPPORTUNITIES:OPPORTUNITIES:

no import tariffsPakistan has large reserves of several varieties of Marble.Raw material availability for handicraft manufacturing. Almost 10 model quarry projects are planned which will ensure square block supplies to the cluster.

THREATS:THREATS:

Entrepreneurs may Entrepreneurs may not be willing to not be willing to invest in labor invest in labor presently working presently working with themwith them

cluster fails to finalize cluster fails to finalize the contract because the contract because of time delays due to of time delays due to irregular shape and irregular shape and irregular supply of irregular supply of the marble stone.the marble stone.

Cont…Cont…

Mines from Mianwali may start operating which is near to this cluster. Policy climate in NWFP and FATA is getting better which will also ensure better supply of raw material

Investment on high Investment on high quality machinery quality machinery in final processes is in final processes is not feasible due to not feasible due to low quality mining low quality mining and quarrying.and quarrying.China has already China has already destroyed the destroyed the granite processing granite processing opportunity with opportunity with its low cost bulk its low cost bulk selling.selling.

GOVT. POLICIES & STEPSGOVT. POLICIES & STEPS

The federal govt. is inviting the investors, The federal govt. is inviting the investors, both local and foreign, to invest in marble both local and foreign, to invest in marble & granite sector.& granite sector.

The Government also directed the The Government also directed the Industrial Development Bank of Pakistan Industrial Development Bank of Pakistan (IDBP) to setup a marble processing plant (IDBP) to setup a marble processing plant in Quetta for which the provincial in Quetta for which the provincial Government would provide land. The Government would provide land. The SMEDA was also directed to provide SMEDA was also directed to provide guidance and cooperation to the guidance and cooperation to the industrialists for establishing marble & industrialists for establishing marble & granite processing plants in the province. granite processing plants in the province.

GOVT. POLICIES & STEPSGOVT. POLICIES & STEPS (cont)..(cont)..

The Prime Minister of Pakistan The Prime Minister of Pakistan announced that an international announced that an international standard Marble Training Institute standard Marble Training Institute would be setup in industrial Unit phase would be setup in industrial Unit phase 1 , to promote skilled labor force which 1 , to promote skilled labor force which would ultimately contribute to the would ultimately contribute to the growth of this industry and promote its growth of this industry and promote its exports. He urged the private sector to exports. He urged the private sector to come forward to exploit huge wealth of come forward to exploit huge wealth of untapped mineral.untapped mineral.

GOVT. POLICIES & STEPSGOVT. POLICIES & STEPS (cont)..(cont)..

In 2006 President of Pakistan inaugurated In 2006 President of Pakistan inaugurated the “marble city” at Gaddani and assured the “marble city” at Gaddani and assured the manufacturers that mining would be the manufacturers that mining would be undertaken latest technology to avoid undertaken latest technology to avoid wastages. About 300 units would be setup wastages. About 300 units would be setup for the marble city on some 600 acres and for the marble city on some 600 acres and investments from the citizens of Pakistan investments from the citizens of Pakistan from USA, JAPAN, SPAIN and UAE. He also from USA, JAPAN, SPAIN and UAE. He also assured other measures to help marble assured other measures to help marble industry as they have failed to utilize boom industry as they have failed to utilize boom in marble industry.in marble industry.

FUTURE PROJECTIONSFUTURE PROJECTIONS

It is forecasted that the production It is forecasted that the production increases with a compounded annual increases with a compounded annual growth rate of about 8% per annum.growth rate of about 8% per annum.

YEARYEAR PRODUCTIOPRODUCTION 000TONSN 000TONS

20102010 138750138750

20152015 206240206240

20202020 306500306500

20252025 455000455000

FUTURE PROJECTIONSFUTURE PROJECTIONS

In Pakistan, this sector has a long-In Pakistan, this sector has a long-term potential, which is ensured by term potential, which is ensured by large local reserves, and a growing large local reserves, and a growing global market.global market.The export estimate that the The export estimate that the country’s export of marble, which is country’s export of marble, which is presently $7 million, can be increased presently $7 million, can be increased to $40 million within 3 years.to $40 million within 3 years.Provided wastage is reduced and Provided wastage is reduced and reserves should be exploited and reserves should be exploited and market properlymarket properly

Conclusion Conclusion This sector needs to be organized on modern This sector needs to be organized on modern lines. The induction of modern technology in this lines. The induction of modern technology in this sector will increase efficiency of processing units. sector will increase efficiency of processing units. Improving the standard can only increase the Improving the standard can only increase the demand of Pakistani products in international demand of Pakistani products in international market. market. This sector has great potential to contribute to the This sector has great potential to contribute to the national economic growth and for the generation national economic growth and for the generation of employment mostly in the rural areas.of employment mostly in the rural areas.This sector also needs to be organized This sector also needs to be organized scientifically with a consistent follow-up by the scientifically with a consistent follow-up by the ministry of industries and production to achieve ministry of industries and production to achieve the export target of $500 million. the export target of $500 million. If the sector is scientifically treated, it can If the sector is scientifically treated, it can generate more employment to 10000 to 50000 generate more employment to 10000 to 50000 people.people.

RECOMMENDATIONSRECOMMENDATIONS

Government should make a policy.Government should make a policy.

They provide licenses to the firms, They provide licenses to the firms, discovering marble reserves in discovering marble reserves in previously un explored area.previously un explored area.

Private sector should be motivated by Private sector should be motivated by giving incentives, security, etc for giving incentives, security, etc for making investments.making investments.

Technology should be upgraded.Technology should be upgraded.

This sector needs better marketing This sector needs better marketing campaign.campaign.