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00:22

K. SCHIPPER: Hi, I’m K. Schipper for Radio Stone Update. Joining me today will be Emerson Schwartzkopf, publisher and editor of Stone Update, as we take a look back at the top stories in news of the hard surfaces industry for 2024.

As with last year, the big story in the industry in 2024 is silicosis. Stories ranged from a jury in Los Angeles awarding more than $52 million in damages to a former fabrication worker, to an increase in enforcement in this country, to Australia’s ban on engineered stone use.

However, there were plenty of other stories to keep us busy here in the Radio Stone Update newsroom. They include tariffs, with more emphasis on tile imports in 2024 than on engineered stone.

Many companies made commitments to invest in their operations this year. And, industry trade shows are thriving, with a couple new events arriving on the scene, including an expo designed for Latin American fabricators in the U.S.

01:34

When a jury in a high-profile case in Los Angeles awarded 34-year-old fabricator Gustavo Reyes- Gonzalez, $52 million in a trial involving two surface manufacturers, Caesarstone Ltd., and Cambria Company LLC, as well as Color Marble Inc. a Diamond Bar Calif.-based distributor, back in August, jaws dropped.

The decision sided with Reyes-Gonzalez, who was diagnosed with silicosis-related illnesses before undergoing a double lung transplant. The civil lawsuit centered on the use of quartz surfaces. The case was originally filed in September 2022 with more than 130 defendants. A lawyer for Reyes- Gonzalez said that other companies in the suit made confidential settlements before the trial.

Because of that, the three defendants wouldn’t bear anywhere near the total amount of the award. The jury’s damages were based on more than $8 million for Reyes-Gonzalez’s economic loss and more than $44 million for past/future non-economic loss. It’s expected he will need another lung transplant in the near future.

Following the end of that case the defendants moved to appeal the jury’s decision. Although Reyes- Gonzalez’s attorney warned that they were merely delaying the inevitable, distributor Color Marble was ordered dropped from the case in early October, negating a possible $1.3 million award.

Specifically, the Los Angeles County court judge noted a lack of evidence that Color Marble actually provided materials harmful to Reyes-Gonzalez.

Another of the defendants hasn’t been quite so fortunate. At the end of the year, Caesarstone reported now facing 79 suits involving silicosis claims against the company’s products.

03:30

In the meantime, the state of California battles over how to regulate workplace safety standards involving engineered stone and other surface materials with crystalline silica. Changes introduced in late 2023 have undergone some modifications. A new rule proposed last month states that fired ceramic porcelain tiles and panels are not artificial stone.

The changes also exempt what are defined as tasks other than fabrication of countertops, backsplashes, walls, flooring, waterfall countertop edges and other products from slabs and panels if exposure is kept below certain levels. The proposed change would offer exceptions to using respirators in regulated areas as long as exposures are less than 5 minutes in an 8-hour time period and silica levels remain under certain levels.

And legislative efforts to regulate the fabrication and handling of hard surfaces materials died in the California legislature in July, but are being revived for the 2025 session. Luz Rivas, a Democrat assembly member, sponsored the “Silicosis Prevention Act” that would have provided for licensing fabrication shops, controlling sales of slabs, silicosis safety training and the banning of dry cutting of manufactured stone.

The bill passed the assembly unanimously, but Rivas withdrew her bill after state regulators said they weren’t anxious to set up a method to enforce those regulations.

With the start of the 2025 legislative session this month, state Sen. Caroline Menjivar has introduced the Silicosis Training, Outreach and Prevention, or STOP Act. The bill adopts a training program on the best practices related to fabrication activities, would develop a certification process for fabrication shops, begin issuing three-year certificates to fabrication shops. and create and maintain a public database and tracking system showing which shops are in compliance with Cal OSHA safety standards.

06:16

For fabricators ,the most frightening aspect of the silicosis issue may be that initial medical examinations may fail to identify the deadly lung disease. A study recently presented to the Radiological Society of North America showed that, in a preliminary analysis of 21 workers, primary health-care clinicians recognized silicosis at the first examination in only four of those cases, while radiologists recognized it in seven of the 21 cases.

New silicosis cases demonstrate findings different from the historical disease and doctors may not be aware of that when they see these images, delaying treatment.

07:01

For fabrication shops who ignore safety requirements, the cost can be large. The Occupational Safety and Health Administration, OSHA, in August fined a Chicago-based company more than $1 million for failing to protect workers from silica dust. An inspection of Florenza Marble and Granite Corp. found workers exposed to levels of silica dust up to six times greater than permissible limits.

The inspection came after OSHA learned that a 31-year-old employee needed a double lung transplant after suffering accelerated silicosis. Inspectors later learned that the employee’s 59- year-old father, who also works in the shop, is also awaiting a silicosis-related lung transplant.

OSHA isn’t the only agency lowering the boom on crystalline silica. State safety inspectors in Burlington, Wash., cited a fabricator there for numerous violations, resulting in an almost $330,000 fine. And California’s Division of Occupational Safety and Health, Cal/OSHA, earlier this year cited nine fabrication shops in the Sun Valley area of Greater Los Angeles. The safety violations earned the nine companies more than $168,000 in fines for violations involving dust suppression and failure to use full-face tight-fitting power air-purifying respirators.

08:26

Of course, silicosis isn’t strictly a problem in the United States. After voting last year to ban engineered stone fabrication in Australia effective July 1st, that country’s Work, Health and Safety ministers met in late March to iron out procedures on the ban. At that time, they agreed that some fabrication of engineered stone could take place after that date, but only under strict guidelines. The exemption applied only to projects with a contract agreed to before December 31, 2023, and fabrication methods were to be strictly controlled.

The United Kingdom’s health and safety workplace watchdog is also drafting new rules to protect fabricators amid rising numbers of stone workers suffering from silicosis. At least 11 cases have been reported since 2023, the majority being immigrants operating in poor working conditions.

One has died and two others have been referred for lung transplants. The Health and Safety Executive has been meeting with the Worktop Fabricators Federation — the WFF — to discuss new draft safety guidelines and review the use of engineered stone to consider what additional actions may be necessary.

At least one manufacturer of engineered stone in the United Kingdom is taking a direct approach to the issue. Technistone has announced that its new philosophy is “go wet or go without.” Peter Davies, the UK managing director of Technistone, has released a statement announcing the company will not supply materials to stonemasons who do not cut the company’s slabs using underwater cutting techniques.

10:03

EMERSON SCHWARTZKOPF: This is Emerson Schwartzkopf. Beginning in January, there’ll be increased attention on overall U.S. tariffs of imported goods. But, there’s already been plenty of action this year with rates on hard-surfaces coming through U.S. ports of entry

A big dispute on unfair-trade tariffs on quartz surfaces from India stretches back almost two-and-a-half years. In May 2022, the federal Commerce Department proposed raising the 3.19 percent tariff to more than 150 percent, because one of the two companies providing production and cost information — missed an extended deadline, by hours, to submit all documents.

The Commerce Department instead set the rate based on estimates provided in the original 2019 complaint by Cambria Company LLC — estimates that Commerce’s own investigation at that time didn’t support.

A lengthy review of the review ensued, with the Commerce Department rolling the tariff back to 3.19 percent for most companies in January 2023. The dispute inevitably ended up in court.

A judge at the federal Court of International Trade essentially threw out the entire tariff review and sent the issue back to the Commerce Department and other involved parties to sort it out. Commerce proceeded to do a new review including Pokarna Engineered Stone, which was included in the initial results, but substituted major Indian quartz producer Marudhar Rocks for Antique Group in the process.

On November 5, the Commerce Department issued its final review — and found that neither Pokarna nor Marudhar shipped goods below market value, setting the anti-dumping tariff at … zero percent … for those two companies and 44 other quartz-surface producers and exporters from India. Any company not on that list will have a rate of only 1 point zero two percent.

12:15

Ceramic tile from India — including porcelain slab — came under federal scrutiny in April. The Coalition for Fair Trade in Ceramic Tile — nine producers of tile in the United States — filed a petition about India-produced product with the U.S. International Trade Commission, citing unfair subsidies and dumping tile below market value.

The petition claimed that the economic damage by these goods could result in tariffs of between 408 percent and 828 percent. In May, the trade commission found those imports produced “material harm” to U.S. producers and instructed the Commerce Department to determine possible tariff rates.

As with the quartz-tariff review, the Commerce Department selected two Indian companies — Antiqa Minerals and WinTel Ceramics —  to provide business documentation. And, in the second half of this year, the Coalition for Fair Trade requested (and received) time extensions for the review.

In late November, Commerce released its preliminary results — and, in an almost exact result of what happened with quartz, it found the two reporting tile companies weren’t sending product to the U.S. market at below market cost. So, the average margin rate between the companies – and the suggested anti-dumping tariffs for all India ceramic tile  – would be zero percent.

Also in late November, two Tennessee members of the U.S. House of Representatives — John Rose and Tim Burchett — wrote Commerce Secretary Gina Raimondo asking for a reassessment of the department’s earlier review of countervailing, or anti-subsidy tariff rates.

The Commerce Department investigation showed only a small subsidy of 3.05 percent for Antiqua and 3.15 percent for WinTel – meaning that the general tariff for all other India tile producers and exporters would be the average between the two at 3.08 percent.

Commerce will send final determinations early next year to the U.S. International Trade Commission, which will then make a final decision on both the anti-dumping and counterveiling tariffs.

14:40

2024 saw one other bit of tariff business. In December, a Commerce Department review of unfair-trade duties imposed in 2019 on quartz surfaces from China found no reason to change the high tariffs now in place.

Back to you, K.

14:59

SCHIPPER: A number of well-known names in the industry announced transactions involving acquisitions and investments that bode well for future success.

 * Biesse S.P.A. announced it would acquire the worldwide assets of the GMM Group in a €72 million cash and debt assumption deal. The deal includes fabrication manufacturers GMM S.P.A., Bavelloni S.P.A. and Techni Waterjet Ltd.

 * Caesarstone announced it would close its Richmond Hill, Ga., quartz surfaces plant in January. The closure came as the company moved to outsource more of its production.

 * One Equity Partners, a New York-based middle-market private equity firm, obtained what it describes as a “significant minority interest” in Gruppo Siti B & T, a manufacturer of turnkey plants, machinery and aftermarket products and services for ceramic tile, stone and quartz slabs.

 * Perrysburg, Ohio-based Cutting Edge Countertops acquired the L.E. Smith Company, a leading laminate fabricator based in Bryan, Ohio. The acquisition of the 74-year-old company became official July 1st.

 * Marudhar Rocks International Private Limited secured an investment of approximately $18.2 million from Bharat Value Fund – BVF. The investment was made through a private placement with BVF acquiring a 6.5% stake in Marudhar, valuing the company at approximately $278 million.

 * Stone distributor/manufacturer Marble Systems Inc. will invest $9.7 million to expand its operations in Fairfax, Va. The expansion will include the establishment of a new warehouse and distribution center, as well as expanding manufacturing facilities.

 * Cosentino will invest €90 million in a new plant designed to increase sustainability through reuse of industrial waste at its manufacturing campus in Spain. The project facility will consume more than 100,000 tons per year of industrial sludge from Cosentino production and, with other materials, produce more than 240,000 tons annually of raw materials.

 * Polycor is investing $15 million in advanced manufacturing facilities at two of its sites in Canada and the United States. The move will consolidate manufacturing and add production lines to increase volume, improve efficiency and enhance quality.

 *And, Pokarna Engineered Stone Limited — PESL — will expand its manufacturing facility in Mekaguda, India. The company will invest approximately $52 million to set up a third Bretonstone production line from Breton S.P.A. The new line will be operational by March 2026 and will add 8.7 million square feet of production capacity for Quantra surfaces.

17:49

Of course, good products don’t sell themselves. Fortunately, the industry had 12 months of strong trade shows this year to display the best in equipment, materials and peripherals. And four years after the bleak days of COVID-19, It’s hard to remember the days of empty aisles and masked attendees.

Nearly 25,000 industry professionals from all business sectors of the hard surfaces industry and beyond attended Coverings 2024, which was held at the Georgia World Congress Center in April. One of the significant takeaways for Taffy Event Strategies, the show’s management company, was the number of what it called young professionals, people 40 and under, attending the show.

The Kitchen and Bath Industry Show, KBIS, held the most successful show in its sixty-year history in February at the Las Vegas Convention Center. Held as part of Design and Construction Week, the co-location of KBIS and the National Association of Home Builders International Builders Show drew 117,000 visitors, of whom 41,500 were registered to KBIS. The show also saw 670 exhibitors, an increase of 30% from 2023.

The world’s largest stone event, the China Xiamen International Stone Fair, is expected to bring more than 150,000 attendees to this Chinese coastal city next March to celebrate its 25th anniversary equaling 2024 attendance. More than 2000 companies will exhibit at the Xiamen International Conference and Exhibition Center and at least 18 countries in Asia, Europe, the Middle East and North America are expected to be represented.

In mid-December, the first stone show for Southeast Asia premiered at the Saigon Exhibition and Convention Center in Ho Chi Minh City. Asean Stone 2024 featured machinery, tools, chemicals and materials including granite, quartz, marble slabs, mosaic and natural stone, as well as stone processing and cutting devices, quarrying machines and polishing equipment.

The Marmomac trade show in Verona, Italy, in late September, drew more than 58,000 attendees in its 58th edition. Two-thirds of the trade show’s attendance came from outside Italy, with 140 countries represented. The event also drew almost 1500 exhibiting companies from 55 countries.

As part of Marmomac, Veronafiere presents its annual Masters of Stone honors, and it was more than a bit surprising this year that the four chosen were all women. The award, which dates back more than 700 years when the Ancient Free Guild of the Art of Stone was born in Italy, honored the successful entrepreneurs involved in promoting and enhancing the economy and culture related to the stone sector with their businesses.

During the same week as Marmomac and a short train ride away in Bologna, Italy, the 41st annual Cersaie international trade event brought more than 95,000 people to revel in all things tile. Although that number declined slightly from last year, show organizer Confindustria Ceramica said exhibitors were particularly impressed by the quality of the show’s attendees, which included distributors, architects and real estate operators. The show was hampered by strikes by Bologna airport workers and taxi drivers during the first two days of the event.

And, Brazil’s largest natural stone event will be moving to a new city and a much larger stage this coming year. The Vitoria Stone Fair will move to Sao Paulo, Brazil’s largest city, and become Marmomac Brazil in February. The announcement was made by Veronafiere, the producer of the Vitoria event. The new name of the event was chosen to underline the strong international identity of the fair and its increasingly close connection with Marmomac.

21:39

One other important event to take place at Marmomac was a meeting of the Natural Stone Strategic Alliance — the NSSA. Representatives from 12 associations agreed to participate in the global effort to publish region-specific environmental product declarations — or EPDs — on natural stone. The move is an effort to recognize natural stone worldwide as a sustainable building product.

The Natural Stone EPDs will seek to advance natural stone as a low-carbon building material and strengthen the industry’s position within the building sector, particularly as global efforts to reduce greenhouse gas emissions intensify to combat climate change. A total of 10 countries, Brazil, Portugal, the United Kingdom, Finland, Italy, Turkey, Greece, Germany, Spain and the United States committed to participating in the global EPD collaboration initiative. The US effort is being led by the Natural Stone Institute.

22:39

Organizers gave birth to a new event for the United States stone industry when the first Latin American Fabricator Expo was held outside Dallas in early November. Presentations were given in Spanish, with topics covering such areas as growing a business and digital marketing. The event also included an exhibition. The goal of organizers is to give Latin American fabricators a voice in the industry.

23:06

After honoring projects, fabricators, educators and industry pioneers, the Natural Stone Institute announced in March a new industry prize for quarriers. In October, Frank Hermans of Coldspring was named the inaugural recipient of the Thor Lundh Quarrier Award. Hermans, the Millbank #3 supervisor for Coldspring, has displayed exemplary leadership and an extraordinary work ethic during his more than 54 years in the industry.

The award is named for Thor Lundh, founder of Norway-based Lundh A-S, who is recognized as being instrumental in transitioning quarry operations from manual to industrial production. Today, the company is the largest quarrier in northern Europe and is developing a global brand.

23:53

Finally, we bid farewell to Patrick Perus who announced his retirement as CEO of Quebec City based Polycor Group in early January. Perus became president of Polycor in 2003, as it acquired Georgia Marble Company from French multinational mining company Imerys. Under his leadership, Polycor acquired several natural stone properties, including Indiana Limestone Company, Rock of Ages, Swenson Granite and Rocamat.

That expansion allowed the company to place natural stone at the forefront of the building industry. When Perus assumed the role of CEO in 2012, Polycor’s annual revenue hovered around $30 million US. Today, the company stands close to $300 million in revenue. Polycor operates more than 80 quarries and 24 manufacturing plants and employs approximately 1500 people. Replacing Perus as CEO and executive chairman is Brian McManus, a Polycor board member since 2022.

24:56

For a transcript of this podcast, go to our website at www.radiostoneupdate.com. For Radio Stone Update, I’m K. Schipper, joining Emerson Schwartzkopf in wishing you a happy holiday season. And, we’ll see you here again in 2025.