Professional Documents
Culture Documents
Industry
2
To the people who have worked
tediously through the ages to uphold
the principles of determination,
commitment and devotion for the
sake of humanity.
3
Group Members:
Saad Asghar (Group Leader)…………………………………………. MBA-S-09-010-009
Muhammad Asif……………………………………………………… MBA-S-09-003-009
4
Chapter No 1
PRODUCT HISTORY
1.1 Marble or calcareous stone
Marble is a crystalline, compact variety of metamorphosed limestone, consisting primarily of
calicle (CaCO3), dolomite (CaMg (CO3)6) or a combination of both minerals. Dimensional
stones such a marble has been highly popular since time immemorial, being used on facades and
interiors of houses and buildings.
Restricted choice of marble for external application is due to its porosity. They hardly sustain
color & shine due to rainfall & environmental pollution. Marble is preferred over granite for
special works that include sculpture, decorative items, fireplaces etc due to their comparative
softness.
Pure white marble is a metamorphic rock of very pure limestone. Marble is found extensively in
various countries like Belgium, France, Great Britain, Greece, India, Spain and Italy. From
classical times, pure white marble was considered as the best of its kind. In the beginning, only
white marble was considered worthy and colored marble was considered impure. However, this
belief was just short-lived because very soon, ancient civilizations appreciated colored marbles
too and used colored marbles in various monuments and sculptures even though pure white
marble is always regarded high. Freshly quarried marble is easy to sculpture and the stone
hardens as it ages.
The surface of marble is durable in a dry atmosphere and when protected from rain. Marble can
be successfully used for all low traffic in-house application like vanities and fireplaces or walls.
It is favorable stone for it’s beauty and design but it is softer than granite and less challenging for
breaking, acids and liquid absorption. Stone sealer/impregnators should be used to protect it's
surface.
5
1.2 Granite or siliceous stone
Because of its uniform texture & hardness, granite is preferred for external usage. It is more
durable as compared to marble & is economical in maintenance. Granite does not need re-
polishing once it is polished & fixed at desired place, while marble needs polishing every year or
at least once in two years.
The granular formation & compactness of granite make it non-porous & non absorbent hence is
more hygienic for the use of laboratories, kitchen, washrooms, and other water exposed areas.
Majority of cities located closer to sea, provide greater markets for granite as it can with stand
the weather effects better than marble.
Usage of granite in special work, mainly involved in making & fabrication of sculpture,
decoration items is lower as compare to marble. This is because granite is harder material to
work on due to its compaction & silica contents.
Granite is a widely occurring igneous rock. The texture of granite is generally medium to coarse
grains. Porphyritic texture is very common in granite rocks. Various colors of granite stones are
widely available and most of the times, granite is available as a massive rock. The beauty of
granite is attributed to the deposits like quartz, feldspar, and mica. Consistent granite has same
pattern throughout the stone. Variegated granite has various veins forming different patterns that
are not easy to match.
Minerals within granite typically appear as small flecks throughout the stone, once creating a
"salt and pepper" look. Other types have veining similar to marble. It is an extremely hard,
dense-grained, stone and comes in a wide variety of colors, and can be either rough, polished or
finished in a variety of different ways.
Not as porous as other cladding stones, granite is extremely durable, and highly resistant to
stains, weathering, and corrosion. It is not strongly affected by freezing , thawing, UV rays or
acids and is suitable for in-house and outdoor purposes. Because granite is formed by extreme
heat and pressure beneath the earths crust it is not affected by heat from a cook top or frying
pan. Even a lit flame placed under the granite will not have a melting effect and will not leave
any burned or scarred marks.
6
Chapter No 2
Its contribution in research & development & human resource development for mining &
processing is noteworthy. Simultaneously industry has enjoyed strong infrastructure support
couple with presence of highly developed markets within & around Italy. It is estimated that
Italian industry, which comprises many large mining & processing units, is very well diversified.
The number of frame saws in Italy in 1997 was 1530, which is 26.2 of the world total.
Throughout 1990s, Italy stone production remained stable wit an average compound growth of 3
% from 1994 to 1997. Italy has maintained its position of world leader in 1997 with its world
share in quarry production of 17.2% or 8.5 million tons. In the world exchange Italy has share of
31% with total quantitative exports/imports of 5.7 million tons in the same year.
7
• High degree of involvement in the HRD activities with in the country & abroad.
• Highly developed information on markets & vigilant eye over international trends in the
stone business.
• Promotion of Italian stone products & machinery in the international markets.
• Sufficient efforts in institutional development in the dimensional stone sector.
2.1.2Greece
The modern history of Greece stone industry dates back to the 1960’s when the public & private
building industry in the original markets boosted the exploitation of mineral reserve. Marble
deposits & marble processing units are located throughout the country. Today there are over
4,000 different sizes of marble companies including some mega projects, which employ 50 to 60
thousand workers in all. The country processing capacity is around 2.5 million tons with over
300 frame saws.
During 1995, production of marble was 2.55 million tons. Total exports of raw & processed
marble exceeded 318,000 tons, showing an increase of more than 12% over 1994. Among the
major stone importing countries from Greece were Saudi Arabia & other Middle East countries
contributing to 50% of Greece exports. Domestic consumption in 1995 was around 657,000 tons.
2.1.2Brazil
With the greatest reserves of granite in the world & substantial deposits of marble & other
dimension stones, Brazil is one of the main producer of dimensional stones, featuring third on
the list of raw granite exporting countries behind China & India.
In 1995, Brazil’s production of marble & granite was 1.95 million tons or 5% of the world’s
production. This is 6% more than the production in 1994. Brazil produces all types of stone
material, granite & other siliceous material have share of more than 7o% of the total.
Compared to 1994, Brazil’s international trade of dimension stone in 1995 rose by 16% for
granite & other siliceous material. Growth I the production of marble & other calcareous
material was 42%, from 12,000 tons to 17,000 tons in 1995 over the last year Brazilian black &
pearl blue granite is favorite in the world market. In 1995, granite exports accounted for 88% of
the total exports of the country. In 1997 Brazil produced 2 million tons of dimensional stone &
exported 0.85 million tons, that include 0.77 million tons of raw granite.
9
India 4000 50 41 210 2305 2070 1027
10
of
Water/Electricity
Chapter No 3
According to the industry estimates 1.37 million tons of marble & granite were produced in
1997. Out of which 6.176 tons were exported in the raw form, 3976 tons in the intermediary
product & 3335 tons in the finished form. Total worth of these exports In the monetary terms in
US $ 4.9 million. Domestic consumption remained at 1.37 millions tons or 97% of the total
volume. Current production has decreased by 5% compared to 1995-96 & 6.2% as compared to
1994-95. Among the major factors attributing to this decline are;
11
• Non existence of quality control process
• Poor raw material supply
• Lack of distribution channels including raw material & finish goods warehousing
• Incapability in supplying consistent product
3.2 Marble & Granite Leases & Reserves in the country
Little efforts were made in the past to identify & estimate Marble & Granite reserves in the
country. According to an estimate there are 160.2 million tons of Marble reserves in the country.
Share of NWFP in the above figure is 98.5% while that of Baluchistan is 1%. Proper survey in
the above figure can reveal more reserves. Granite reserves only at one place in Northern Areas
show a total of 414 million tons while other reserves of granite are spread all over the NWFP,
Baluchistan & Sind.
3.3 Production
While the official statistics reflects much less production of dimensional stone in the country
actual production estimates of the industry show a total production of 1,386,000 tons for 1997-
98. The production has shown a decrease of 5% over the production of the last year. In the
nineties the sector showed an average growth of 18% up to the mid of the decade where after in
1996 & 1997 the production started decreasing. Moreover, the heartening news is that now
Pakistan has a place on world mining map as an Australian based company sold shares, by initial
public offering, through Stock Exchange to raise nearly 15 million Australian dollars.
The response from the investors was enthusiastic and the number of shares changed hands
crossed 9 million or about 8 percent of the issued capital, some $3.6 million in value. The share
12
offer was heavily over subscribed. The 4000 subscribers, who acquired the scrip, included some
of the largest institutional investors in Australian, Europe and Canada.
The objective of the company was to explore, develop and mining of the copper and gold
resources at the Reko Diq Project in Pakistan. This is the first internationally listed mining
Exploration Company entirely focused on the vast and untapped natural resource potential of
Pakistan.
During the last 5 years production of marble was as follows:
Year Production (000MT)
1996-97 459.2
1997-98 344.8
1998-99 411.6
1999-00 578.7
2000-01 589.6
Technical advancement in the last seventy years had increased the world production and
consumption of dimensional stones to 49.5 million tons. Due to increase in world consumption
the granite and marble trade reached US$ 3.5 billion mark in 2002. Italy is the major player in
the global market and exported 38 percent of the dimensional stone's export, while its imports
were 18 percent of the international imports. Other major exporters include Spain, Turkey and
Portugal. Other major importers were USA, China, Germany and Hong Kong.
During the 9 months of 2002-03 export of marble and granite from Pakistan increased by 18.07
percent. However, in 2002 granite accounted for US$ 85 thousand in foreign exchange earnings,
which was approximately 0.01 percent of global granite exports. While the share was 0.03
percent in 1998, exports were US$ 208 thousand.
In Pakistan marble is processed in more than 1,600 units in the country including 685 small and
medium size units. These units have been defined in three categories according to their sizes,
small, medium and comparatively large, but not up to the international level.
Unfortunately the processing strength for granite in the country remains unsatisfactory. There
are only nine units, of which four are operational. All of these units have an average investment
of over Rs.20 million with gang saws, block cutters and polishing heads. Due to hardness of
granite, production capacity of granite processing units is low as compared to marble. Average
production of these units is 6,000 to 8,000 sq/ft per month per unit.
The primitive mining techniques existing in Pakistan do not allow extraction of standard blocks,
a major factors for the decline in Pakistan's marble industry are slowdown in the construction
industry, lack of quality production and an inconsistent and irregular supply of raw material. The
extraction in Pakistan comprised boring of holes in the bedrock, which were filled with
explosives to blast the block, which results not only in a high wastage (up to 73 percent), but
also in smaller stone size, which substantially reduces the price, which is directly proportional to
size. The extraction of marble in Pakistan was yet to be developed and value-addition to all
marble products can be done with the help of modern machinery from Italy. It is considered that
13
Pakistan is the right place for foreign investment, in mining as well as the training of manpower
involved in the marble sector and Italian businessmen can avail this opportunity.
Majority of the colors traded in the international market are available in the counter. Among all
these colors white color is universal demand. Following exhibit indicates the color of marble &
onyx in different parts of the country.
14
of light green, Green ith
Streaks of White &
yellow
White-Brown banded White with layers of light 6000 tons
gray
Total production 1386312 tons
15
• Literacy rate is better than other marble clusters leaving Karachi.
• Had 2 chambers of commerce in the vicinity.
• The head office of APMIA was located in the cluster that gives national leadership
3.6.2 WEAKNESSES
• In spite of being the largest cluster of Rawalpindi/Islamabad region industry lacks
stimulus towards value addition, and investment in high-end machinery and
Human Resource is minimal.
• Comparatively disadvantaged in case of raw material availability and
transportation costs if compared with units working in NWFP, Balochistan and
Karachi.
• Comparatively disadvantaged in case of export and local consumption if
compared with Karachi.
• Comparatively disadvantaged in case of investment portfolio and costing
structure if want to import squared block from abroad.
• There was a 100% demand-supply gap of skilled labor in the industry as far as
export quality processing is concerned.
• Due to lack of export culture, industry was dependent on local machinery and
quality of product is not given proper weightage. It is a fact that only one unit had
the facility of modern squaring and auto polishing for export purposes. This unit
was providing limited services for squaring to local units in the area.
• There was no waste management policy or strategy for this cluster. Small pieces
of stone were only used for marble powder and chips while there was no
dumping place or feasible utilization of marble slurry.
• Very low membership in chambers and association activities.
3.6.4 OPPORTUNITIES
• On average 38% of the marble excavated form the mines in any country is
exported in the same year which shows high potential for export. This figure is at
3% for Pakistan.
• Industry had been defined as zero-rated industry therefore had no import tariffs
and custom duty on import of machinery, specialized trucks and other tools.
• Pakistan had large reserves of several varieties of Marble.
• Raw material availability for handicraft manufacturing.
• Almost 10 model quarry projects were planned which will ensure square block
supplies to the cluster.
• 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.
3.6.3 THREATS
• Entrepreneurs may not be willing to invest in labor presently working with them
because of fear of job change and meager opportunity of improvement because
of fewer processes.
16
• Even if any importer was ready for a business transaction, cluster fails to finalize
the contract because of time delays due to irregular shape and irregular supply of
the marble stone.
• Investment on high quality machinery in final processes was not feasible due to
low quality mining and quarrying.
• China had already destroyed the granite processing opportunity with its low cost
bulk selling.
• Minimizing the trade barriers and tariffs, India may come as a big supplier of
finished and unfinished marble products.
• More investment in processing units near mining areas may create more
shortage of raw material.
• New regulations (load per axel) if implemented by road authorities may hinder
the supply of stone from the mines.
• Invasion of cheap ceramic tiles in the market
Chapter No 4
ANALYSIS OF BUSINESS
OPERATIONS
4.1 BUSINESS STATUS:
Almost all of enterprises were working as sole proprietorship however there were very
few examples in which units had advanced after starting of operations as sole to
partnerships.
4.2 FINANCE:
All of the businesses were being financed by equity. As far as operations were
concerned credit-cash ratio is 50% as far as sale is concerned. However for
procurement of raw material 90% was on the terms of cash when raw material was
received.
The entrepreneurs who were mostly matriculate or maximum bachelors in different
subjects normally maintain accounts. Although exporters were maintaining proper
accounts while few had also hired munshees.
As far as marinating business accounts in banks is concerned, transaction during
17
exports and/or procurement and sale to Karachi were done through banks.
18
weight etc.
19
References
Small and Medium Enterprise Development Authority
Government of Pakistan
www.smeda.org.pk
United Nation Industrial Development Organization
www.unido.org.pk
Global Star Granite & Marble Industry,
Industrial State, Abbottabad.
20
21