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K. SCHIPPER: Hi, I’m K. Schipper with the latest in hard surfaces industry news from Radio Stone Update
00:32
Caesarstone Ltd. continues its run of double-digit revenue increases, but company officials admit at least some of that is simply keeping up with inflation.
The surfaces manufacturer reported another record for this year’s second quarter, with $180.27 million in revenue. That exceeds the same period in 2021 by 10.3 percent. The numbers represent the sixth consecutive quarter of double-digit year-over-year growth, including nearly 20 percent in the U.S.
Yuval Dagim, Caesarstone CEO, says that comes even while the company also implemented successful pricing actions to help mitigate increasing costs of raw materials and shipping.
Dagim admits the double-digit growth is mostly dominated by price. He told a group of Wall Street analysts earlier this month, “Originally, we thought it’s going to be probably one-third growth by volume and two-thirds by prices. I think it’s becoming more dominant by prices rather than volume.”
Caesarstone implemented two price increases worldwide on its products in January and April. The company began implementing another increase last month.
The U.S. market provided the bulk of the company’s gains in this year’s second quarter, with $93 million in revenues, outperforming 2021 by 19.5 percent. Canada also provided its share of gains, where $25.3 million in sales represented a 15.6 percent increase. However, the company also reported a 4.4. percent revenue decline in Australia and a tepid performance in Europe.
Company officials attributed the strong second quarter performance in the U.S. to strong organic growth that included natural stone and other products from its Omicron distribution network. Canada’s figures were boosted by a strong performance in all channels, with sales at IKEA continuing to experience strong year-over-year growth.
Dagim didn’t address specific actions in North America, although he said the company is making progress in rolling out its CS Connect computer platform and he noted continued work on productivity at Caesarstone’s quartz surface facility in Richmond Hill, Ga., saying improved efficiencies there should result in shorter lead times and cost savings for the U.S. market.
03:05
The Stone Equipment and Supply Alliance – SESA – may only be in its second year, but already it’s signed up its 50th active member. SESA was formed to provide a common voice for the aligned companies in coordinating attendance and negotiating exhibition costs at industry trade shows.
SESA President Mike Schlough of Park Industries says having 50 members speaks to the value that companies see by joining SESA. The organization plans to host a Manufactured Surfaces Pavilion at TISE to make it the best place for fabricators to learn about today’s materials and their fabrication techniques, as well as seeing industry leading machinery and technology.
For more information on SESA, contact Jon Lancto of Big Fish Consulting at 843-860-4150, or at jlancto@icloud.com
04:07
Park Industries announces it will hold its second Digital Stoneworking Expo™ of 2022 next month. The event is scheduled for Sept. 13-14 at the Sheraton Greensboro at Four Seasons in Greensboro, N.C.
Attendees will tour the shop of Carolina Custom Surface, watch CNC machine demos, and hear from industry experts and guest fabricators. Education topics include “Digital Fabrication from Start to Finish,” “Determining Your ROI,” “Countertop Forecasts,” and “How to Cut Porcelain.”
This is Park’s 15th year hosting Digital Stoneworking Expos around the country. There is no charge to attend, but space is limited. For information or to register, go to www.parkindustries.com/dse
06:12
EMERSON SCHWARTZKOPF: This is Emerson Schwartzkopf. There’s inflation, a war with global implications, supply-chain issues – and U.S. hard-surface imports mark a new record level at $512 million in June.
That half-billion-dollar mark in June, however, overshadowed a wealth of underperformance, starting with a 7.9% month-to-month drop in quartz-slab volume from this May, with value down 5.7%. the usually hot marble sector also showed a bit of June swoon with a 2.4% drop in volume from the previous month.
Also, Malaysia’s quartz-slab exports drop by more than 80% in both value and volume from the same time last year. Looks like some complaints about transshipping may be getting results.
Tariff concerns could be driving down Asian quartz-slab shipments to the United States, but demand may be lessening. Volume declines in other sectors, such as marble and granite, could be signaling that the unlikely pandemic boom is finally over.
07:24
K. SCHIPPER: In news out of Atlanta, Construction Resources LLC – also known as CR – is now under the ownership of New York based investment group Mill Point Capital. International Designs Group – IDG – a portfolio company of Mill Point, announced the acquisition in mid-July. CR also includes Atlanta Kitchen and Natural Stoneworks. Terms of the transaction weren’t announced.
The acquisition will allow Construction Resources to expand into new markets with its current operations and by acquisition, and continue to focus on growth initiatives providing enhanced opportunities to CR employees across the United States through its legacy brands and locations. CR’s entire senior leadership team will continue with the company.
Mitch Hires, Construction Resources CEO, says, “As part of International Designs Group and Mill Point Capital, we plan to continue our mission of being a loyal partner to our customers and vendors, creating job opportunities and working with our 750 employees across 30-plus locations.”
Mill Point executives called the growth opportunities in front of the company exceptional.
The acquisition is the second investment-firm deal involving Construction Resources. In late 2015, New York-based Monomoy Capital Partners acquired the company, allowing for expansion and strengthening its footprint and product offering.
In 2019, CR acquired United Materials Inc, helping expand its product and geographic reach. That same year, the company also purchased Jacksonville, Fla-based stone wholesaler Any Old Stone to expand its UMI distribution network.
Construction Resources dates back to 1970, when it was formed by Fred Hires and some partners and offered cultured marble as its only product. In 1996 Hires’ sons, Mitch and Sonny Hires, bought out their father’s partners and expanded into kitchen countertops, opening Atlanta Kitchen. That, in turn, led the company to add other design and construction products and expand throughout the Southeast.
Mill Point’s IDG already made one major move in the hard-surface market earlier this year when it partnered with Farmingville, N.Y.-based Cancos Tile Corp. Cancos operates 12 designer showrooms in New York and New Jersey, as well as more than a half million square feet of warehouse space and a hard-surfaces fabrication plant and tile distribution network serving the southeastern U.S.
10:03
Pangaea Natural Stone is now the proud owner of one of the largest integrated solar roofs in India. The system is designed to offset CO2 emissions and was installed over 35,000 ft2 of the company’s new production facility in Bagru, Rajasthan.
Designed by New Delhi-based Ornate Solar, the InRoof Solar system generates 530 kWp and is powered by module-level power electronics in the form of microinverters from Enphase Energy of Fremont, Calif. The technology allows the system to produce more electricity even in dawn, dusk, and low-light conditions.
With the InRoof system, Pangaea saved almost 25,000 kg of CO2 that would have been emitted in the production of a steel roof, as well as powering the company’s 90,000 ft2 production facility.
In other news around the hard surfaces industry….
11:04
Orange, Calif.-based MS International Inc. – MSI – has been recognized as one of the 50 Best Companies to Sell for in 2022. The award is given out by Selling Power magazine and highlights 50 companies that lead the charge in true selling power.
Organizations were selected through extensive data across four key areas to determine the top 50. They include company overview; compensation and benefits; hiring, sales training and sales enablement; and diversity and inclusion. Since MSI’s founding in 1975, the organization has grown to more than $3 billion in annual revenues and more than 3,000 employees.
11:51
The Natural Stone Institute has provided natural stone and fabrication services for its 44th home with the Gary Sinise Foundation through its Restoring Independence Supporting Empowerment – or RISE – program. The program builds 100 percent mortgage-free and specially adapted smart homes for severely wounded veterans and first responders.
The latest recipient of a home is U.S. Army Chief Warrant Officer 3 Romulo “Romy” Camargo, who was wounded during a combat operation in Afghanistan in 2008 that left him paralyzed from the shoulders down and on a respirator. Despite the extent of his injuries, Camargo and his wife, Gaby, founded the Stay in Step Spinal Cord Injury Recovery Center, based in Tampa, Fla., in 2015. The center’s goal is to serve returning service members and veterans with spinal cord injuries and neurological disorders that cause paralysis.
Natural stone and fabrication for the Camargos’ home was provided by The Granite Place, Concept Elite Enterprises and Northern Stone Supply. Companies interested in getting involved with future RISE projects should email rise@naturalstoneinstitute.org.
13:09
And, Knoxville, Tenn.-based BB Industries has been chosen as a top place to work in 2022 by the “Knoxville News Sentinal.” BB Industries was also cited in 2021. The award is based on employee feedback gathered through an anonymous third-party survey administered by employee engagement technology partner Engage LLC.
Rick Stimac, BB Industries CEO/president, says, “This award helps us gel even more as an organization, and everyone who works here should be proud they contribute to such a special atmosphere.” And, Karen Hamilton, the company’s human resources manager says, “Our employees are the difference in making BB Industries successful. We know that, appreciate that, and do our best to show it.”
Remember, our online newsletter, Slab & Sheet, appears on alternate Wednesdays. For notes and a transcript of this podcast, go to www.radiostoneupdate.com. For Radio Stone Update, I’m K. Schipper and we’ll see you here again soon.
