Vision for New Millenium
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Transcript of 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
Production: 16 million sq.mt
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
Production: 16 million sq.mt
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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