Vision for New Millenium

8/2/2019 Vision for New Millenium

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INDIAN GRANITE INDUSTRY

A VISION FOR THE NEW MILLENIUM PART II

BY

MR. BHADRAVATHI DEVARAJ

DIRECTOR

STONE TECH INTERNATIONAL SYSTEMS & SERVICES

BANGALORE

C-DOS Global Stone Technology Forum December 2009

Thanks to India, today China is number one in export of finished granite

products to the world market. 53% of its rough block requirement is supplied

by India in 2008 and the trend continues. Although India has all the required

processing capacity, trained manpower and resources to convert these rough

blocks into finished products and export to the global markets including

China We have not done this. To quantify, roughly 1.3 million tons of

granite blocks are exported from India annually, with approx value of

Rs.13000 million. This quantity when processed in China and exported

generates a value of around Rs.26000 million for them.

The case is similar in the Steel industry. China is number one with 50

million tons production of finished steel products per month, while India is a

major supplier of iron-ore. If this iron-ore could have been converted into

finished steel products in India, with all the facilities available, perhaps here

also we could have taken their place & exported added value finished

products to them.

By default, we have missed a great opportunity to be number one in the

granite industry. However I am optimistic that even today it is not too late to

achieve our vision to become the global leader.

In my article Indian Granite Industry A Vision For The New Millennium

published in the Feb 2007 edition of Stone Edge Magazine, I had focused on

the innovative technologies in quarrying and processing we should adopt to

achieve leadership status. In this article, I am reiterating the significance of

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bringing about these innovative changes including framing relevant policy

without looking for precedents.

Globalization concept

The emphasis should be on achieving the real benefits of globalization for

India, by subscribing to the guideline that raw materials should be utilized to

the maximum extent using local resources and supply only value-added

products for export instead of exporting raw materials, whether it is granite

rough blocks, iron ore or cotton.

Proactive measures by Government

Today the government is acting when the pressure from the industrial sector

is powerful, like the textile industry. They are now implementing a ban on

cotton exports, and providing incentives, special interest rates, abolishing of

certain taxes, for the survival of the textile industry. (Exhibit 1)

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Domestic growth market

Standard Chartered Bank Global CEO Peter Sands, recently made a

statement that the economies in Asia needed to focus more on

strengthening domestic consumption to make the development process

sustainable rather than only thinking in terms of exporting the products to

the US, this is a challenge to China and India and most Asian economies.

This is applicable to our granite industry as well.

This is the right time for the government to consider duty-free imports of

innovative energy-saving machineries and give freedom to 100% Export

Oriented Units to sell their products in the domestic market, without any

restrictions. This bold step has to be taken by the government, considering

the global economic meltdown, followed by unprecedented recessionarytrends in the developed countries. It need not be over emphasized that

granite industry has to develop the domestic market, which fortunately is not

seriously affected by the recession.

From the global GDP growth figures, it is seen that only India and China are

having a GDP growth rate of 5.4% and 8.5% respectively, while all the

developed countries are showing a negative growth rate. (Exhibit 2)

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According to Mr. Sanjay Anand, MD of CEDAR, a global management

consultancy firm, in a recent assessment on real estate per capita, Indias

position was at the bottom with 2.3 sq.mt per capita, compared to 10.2

sq.mt/capita in Middle East, and 39 sq.mt per capita in the US. (Business

India, Oct 2009) We have a long way to go. There is a huge growth

opportunity for granite industry domestically.

Government subsidy to adopt cost-saving new technologies

Another relevant example is the steps taken by the government to provide a

total of Rs.52000 million to four public sector fertilizer plants to help them

convert existing expensive naphtha and fuel-oil based plants to gas based

plants for production of urea. The cost of production of urea using liquid

fuel is over Rs.20,000 per ton and sold in the market at a government fixed

price of Rs.4830 per ton, with the government reimbursing the difference to

the manufacturers.

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This amounts to a subsidy of Rs.1110000 million in the current fiscal. By

doing this government expects to save on the subsidy by 50%, as the

production cost using gas, will reduce to around Rs.10000 per ton.

Multiwire technology Power Savings

The same principle can be applied to the granite industry. By changing the

sawing technology in processing units from traditional gang saws to

diamond Multiwire saws, for each sq.mt of production, the savings in energy

will be around 8 kwh. At a cost of Rs.6/kwh, the saving is Rs.48/sq.mt. For a

production of 16 million sq.mt per annum, the energy savings alone will

amount to Rs.768 million. This amount can be given as financial incentives

to change from Gangsaw technology to Multiwire technology. (Exhibit 3)

Energy efficiency is much more necessary than production of energy to meet

future demands. This was the observation made by Mr. Rick Wade, SeniorAdvisor, US Dept of Commerce. He made further observation that

investments in energy efficiency were five times cheaper than investing

in energy production. This aspect has to be considered by our government

by giving incentives to the energy efficient Multiwire technology. This

technology should also be made eligible for getting carbon credits.

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Exhibit 3: Savings in power using Multiwire technology

Production: 16 million sq.mt

Gangsaw: 16 million sq.mt * 13 kwh/sq.mt = 208 million kwh

Wiresaw: 16 million sq.mt * 5 kwh/sq.mt = 80 million kwh

Power saved: 128 million kwh

Power cost: Rs.6 per kwh

Power saving: Rs.768 million

The units of power saved can be used for other high value products such asAutomobiles, Biotechnology, Agro-based industries, IT and Engineering

industries. This can generate more employment for skilled labor. The

money saved of Rs.768 million can be used for technology upgrades in the

granite industry.


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Multiwire technology Steel savings

Multiwire technology saves substantial quantity of steel, which is used in

Gangsaw cutting process as steel grits and steel blades. For production of 16

million sq.mt per annum of granite slabs, the steel consumption saved will

amount to 64000 tons, equivalent to Rs.3200 million. (Exhibit 4)

Multiwire technology Material savings & High productivity

The Multiwire technology has 10 times higher productivity and thereby the

process turnaround time is reduced, which in turn results in reduced

inventory holding costs. This technology is eco-friendly and generates less

waste materials. This in turn increases the yield of saleable products by 8%

or more. (Exhibit 5)

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Exhibit 4: Savings in steel using Multiwire technology


Steel blades & grits required: 4 kg/sq.mt

Gangsaw steel consumed: 64 million kg

Wiresaw steel consumed: 0 kg

Quantity of Steel saved: 64000 tons

Cost of steel blade/grits: Rs.50/kg

Steel savings value: Rs.3200 Million

The value of steel saved can be put to use for our infrastructure and

construction activities. Since the waste generated granite powder in

Multiwire is free from steel, it can be utilized for ceramic industry

whereas iron-contaminated granite powder cannot be readily used.


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Sawn Slab Clusters A new concept

The concept of sawn slab supply clusters located at quarry sites, is an

innovative approach and in no other country this concept is implemented as

on date. Here again, if we are looking for precedents we will be left behind

and will continue with the scoop & sell a shortsighted business policy.

When we have the resources and facilities in-house to produce value added

products, we must seriously think how we can stop or reduce export of

rough granite blocks and instead export sawn slabs.

The clusters of sawing facilities are to be established at the quarry site using

Multiwire technology. Minimum processing capacity of these clusters

should be of the order of 2 million sq.mt per annum. Eight clusters around

prominent quarry sites will generate 16 million sq.mt of sawn slabs.

(Exhibit 6 & 7)

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Exhibit 5: Savings in raw materials using Multiwire technology


Yield on Gangsaw: 1 cu.mt ~ 32 sq.mt

Yield on Multiwire: 1 cu.mt ~ 35 sq.mt

Raw materials for Gangsaw: 0.50 million cu.mtRaw materials for Multiwire: 0.45 million cu.mt

Material saved: 0.05 million cu.mt or 50,000 cu.mt

Average material value: Rs.35000/cu.mt

Total sq.mt saved: 1.75 million sq.mt

Average sale value: Rs.1500/sq.mt

Total material savings:Rs. 2625 million

The savings in raw material will contribute as finished products to a

value of Rs.2625 million. This savings can be ploughed back in

technology modernization.


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Multiwire technology Wealth from waste

All the wastage of block squaring will be left at the quarry site, which can be

used for producing value added cobblestones, pavers and chips for roadbuilding, by installing high volume splitting & crushing plants, which can

handle huge quantity of waste materials. (Exhibit 7a)

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Advantages of Sawn Slab Clusters

1. Transportation costs will be reduced to extent of 40% or more, since all

the wastage will be disposed close to the quarry sites.

2. The buyers will now have a choice to select the various grades of sawn

slabs, and load them in trucks or containers at site, for transportation to

their own facilities.

3. By procuring sawn slabs, the buyers will have the advantage of using

their own polishing and finishing facilities either local or abroad, to

maintain their individual quality standards and brand image.

4. Specialized activities of sawing only will minimize the investment per

sq.mt of product.

5. Flexible order quantities and Just-in-time deliveries will now be a

reality with the sawn slab clusters.6. For export, waiting time at the port for bulk shipment of blocks (e.g. 2-3

months) can be avoided, and sawn slabs can directly reach the destination

within a reasonable time in containers.

7. From the eight clusters, different colors of materials can be sourced in

required quantities.

Multiwire technology A novel approach with far reaching effect

It was Albert Einstein who said, If at first the idea is not absurd, then there

is no hope for it. Many Gangsaw manufacturers believed and predicted that

diamond Multiwire machines will not work, and will have many problems

and is an absurd invention. Indian granite industry found comfort in

believing this and hesitated to invest in Multiwire technology. Today almost

all Gangsaw manufacturers have retraced their statements and started

imitating and manufacturing Multiwire machines under their brand name.

Now, there are more than 10 manufacturers of Multiwire machines around

the world. This is good for the industry.

Multiwire technology presence in India

Although across the globe, there are more than 50 Multiwire machinesworking in the last 5 years, in India, there is only one Multiwire machine

working in Malur near Bangalore. Stone Tech set up this unit with the sole

purpose of propagating an innovative idea. It is bringing an awareness of the

technological advantages for the betterment of the Indian granite industry.

(Exhibit 8 & 9)

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Diamond wire technology is advancing very fast, and today the cost of

production for the consumable is at par with Gangsaw operations when

considering the 10% additional yield in finished products. While steel

continues a steep climb, the cost of synthetic diamond is progressively

coming down and eventually the cutting cost will become cheaper than

Gangsaw consumables.

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Hydraulic Drilling - Adoption at quarries

The other area of importance, which has not been paid much attention till

recently, is the high power hydraulic drilling operations using multi-drills in

quarries. The advantages of hydraulic drilling machines are:

a. Savings in diesel cost to an extent of 50%

b. Reduced dependence on hand drilling operators

c. Avoiding health hazards to quarry workers by providing inbuilt dust

collection systems in hydraulic drilling equipment

d. Faster speed of operation with five times increase from 0.3 mts/min to

1.5 mts/min.

e. Straight drilling operations result in well squared blocks

f. Squared blocks provide increased yield, reduced royalty payments &

reduction in transportation costs by around 20%

As an example, in the Chimakurthy area of Ongole, Andhra Pradesh where

Black Galaxy is quarried, many hydraulic drilling machines are in operation.

The productivity from the quarries in this region using two-drifter powerful

Girodrill 200 machines, has increased by 100%, and manpower reduced by

20 persons for every machine in work. More quarry owners in Karimnagar,

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Bellary, Ilkal, Vizag and Madurai are adopting the two-drifter Girodrill 200

machines. (Exhibit 10 & 11)

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Technology products development

In the spirit of globalization, it is time to assess the optimum cost at which

granite-processing machineries can be manufactured in India and exported toother countries. Today, the level of sophistication and technological

manufacturing facilities available in India is of international standards, and

these facilities are availed by multinational companies of USA & Europe for

outsourcing their products & sub assemblies, including assembling finished

products in Automobile engineering and Aerospace sectors.

It is surprising that even after 40 years of association with Italian companies,

both the countries have failed in their responsibilities in not having

established collaborative joint ventures in manufacturing granite processing

machineries and consumables in India, excluding diamond tools to someextent. This could have benefited both the countries.

On the other hand, China has the manufacturing facilities to meet its local

demands as well as export machineries to other countries as well. This is the

time for both Italy and India to seriously establish joint ventures taking

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advantage of Indian resource available along with Italian machinery and

consumable technologies to produce cost effective products for our industry.

Human Resource Development

It is high time that professional training be imparted at all levels of personnel

in the granite industry, whether it is quarry or manufacturing units. The level

of training and skills development provided in Engineering and Information

Technology industries is worth following, and applying to our industry if we

want to empower our workforce and make their caliber world-class. Unless

we pay attention to manpower training, bringing in high technology

machineries alone, will not give the desired effect. In the diploma and

degree level technical courses, granite processing should be included in the

curriculum.

Research and DevelopmentThe granite industry in general lacks in-house R&D facilities and attention

must be paid to this area to maintain sustainable growth and provide

challenging work environment.

Stone Tech International is extending full cooperation for the research

project jointly organized by C-DOS and ITALIAN TRADE COMMISSION

coordinated by professors from Maharana Pratap University of Udaipur.

They are evaluating the competitive advantages of Multiwire technology &

Hydraulic drilling machineries. (Exhibit 12)

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Conclusion

I would like to stress that Indian Granite Industry has a great future to be

number one in the world. Provided we take a passionate approach to sellvalue added products at a competitive price for the domestic as well as

export market. We have to make sincere efforts to be truly global in our

approach and assimilate the latest technologies, as well as follow best

management practices, keeping in mind that we have to face global

competition.

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