Market Report - Ornamental Rocks - EN

THE US MARKET FOR ORNAMENTAL
ROCKS AND OPPORTUNITIES

FOR PORTUGUESE SMES:
COMPETITION AND DEMAND
VOLUME ONE: REPORT
Produced by Marq Consulting Group and CH Academy
Commissioned by the Associação Empresarial de Portugal (AEP) Chamber of Commerce and Industry of Porto
Funded by the European Union (EU), Fundo Europeu de Desenvolvimento Regional (FEDER) / European Regional
Development Fund (ERDF)
Lead authors: Dr Laura J White and Jacob Ford, Marq Consulting Group
Editors: Julie Peterson, Marq Consulting Group, and Carlos Lacerda, CH Academy
September 2016
2 • USA NEXT CHALLENGE
Table of Contents
Executive Summary 7
Acronyms 9
Lists of Figures 11
List of Tables 13
Section 1: Introduction 15
1.1 Report Parties 15
1.2 Report Focus 15
1.3 Report Methods 18
1.4 Report Subsectors and Product Categories 19
1.5 Conclusion 20
Section 2: Internal (US) Competition 21
2.1 Introduction 21
2.2 Top US Producers 21
2.3 US Ornamental Rock Market Competition 24
2.3a Building Stone Sector 24
2.3b Stone Mosaic Tiles 28
2.3c Marble Slabs 31
2.3d Granite Slabs 35
2.3e Stone Slabs 41
2.4 Conclusion 45
Section 3: External Competition 51
3.1 Introduction 51
3.2 Top Sector Competitors 51
THE US MARKET FOR ORNAMENTAL ROCKS

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AND OPPORTUNITIES FOR PORTUGUESE SMES
3.3 Global Competitors 53
3.3e Stone Slabs 56
3.4 European Competitors 57
3.4e Stone Slabs 60
3.5 Conclusion 61
Section 4: Legal Regulations and Compliance 65
4.1 Introduction 65
4.2 Packaging and Labelling 65
4.3 Tariffs 68
4.4 Distribution Structure and Channels 69
4.5 Conclusion 73
Section 5: An Insider’s Perspective 75
5.1 Introduction 75
5.2 US Ornamental Rocks Demand 75
5.2a Stone Mosaic Tiles 76
5.2bMarble Slabs 78
5.2c Granite Slabs 81
5.2d Stone Slabs 85
5.2e Worked Building Stone 88
5.3 Trends Affecting US Supply and Demand 95
5.3a US Construction and Building Recovery 83
5.3b Luxury on a Budget/DIY 100
5.4 Understanding How the Competition
Responds to Trends 102
5.5 Conclusion 105

Section 6: Conclusion 107
6.1 Introduction 107
6.2 Portuguese SMEs’ Strengths and Challenges 110
6.2a Challenges 110
6.2b Strengths 117
References 127

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Executive
Summary
This report was conducted by Marq Consulting Group and
CH Academy for the Next Challenge USA project that was
commissioned by the Associação Empresarial de Portugal (AEP)
Chamber of Commerce and Industry of Porto. It was financially
supported by European Union (EU) through the Fundo Europeu
de Desenvolvimento regional (FEDER) or, in English, the European
Regional Development Fund (ERDF) as part of the Compete
2020 project. It contains two volumes. This volume (Volume One)
contains the report content, and Volume Two includes all necessary
appendices. The projects and report aim to improve and assess
export development and growth opportunities for Portuguese small
and medium-sized enterprises (SMEs) through trade facilitation
with the United States (US).
Section 1 introduces the report, report parties, and the report

focus by providing an overview of global and Portuguese trade.
This section highlights current Portuguese trade competitiveness –
ranked 38th out of 190+ countries by the World Economic Forum for
2015 to 2016 – and how “ornamental rocks” industry exports support
Portuguese growth, gross domestic product (GDP), and economic
recovery. Using a multi-factor analysis, the report examines how US
market access and growth can facilitate development and growth
in the building stone subsector and four related product categories:
stone mosaic tiles and marble, granite, and stone slabs
Section 2 assesses US import competition, top exporting countries,

and import volume. This section goes on to predict intermediate
growth in the US market. Opportunities for export development
and growth are mostly positive – although the “granite slabs”
product category for US imports is in decline. The strongest markets
for SMEs are in stone mosaic tiles, marble slabs, and stone slabs –
three of the four product categories. Portugal has performed best in
the US with stone slabs – holding 2.1% of the market, equivalent to
Spain’s exports to the US market. The “stone slabs” product category
is also the only US product category market where Portugal holds
more 0.5% of the market in the last year. Competitiveness in some
US markets, such as marble slabs, has declined in recent years, and

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the analysis provides a range of export strategy the analysis highlights the states with higher
recommendations for SMEs market access to volumes of domestic production – perhaps
improve competitiveness. which SMEs should avoid in identifying their
target market. Additionally, the section examines
Section 3 builds on the competition analysis of four other product categories from the building
the internal (US) market by examining global stone subsector that may provide SMEs with
and European competitors and Portugal’s opportunities for export development. These
performance in these markets. The section four “worked” building stone product categories
sees global and European competitiveness and – meaning they have been cut and finished, as
export development as two processes that shape opposed to slabs – have higher US demand,
a dynamic environment for SMEs assessing and Portugal also is a stronger US competitor
opportunities in the US market. China, India, and in these product categories. As such, SMEs
Turkey are both US and global export leaders may face additional competition in accessing
in building stone products. Italy and Spain are the US market from established Portuguese
also top global and European exporters. Greece, producers. However, SMEs will find opportunities
Portugal, and Germany rank third through fifth in for developing sustainable strategies in the US
the European building materials market. Portugal market by securing appropriate market data to
outcompetes global trade leaders like the US guide how to address US demand and follow
and Germany in the building stone market and trends that affect US import demand. The report
is a top European competitor in stone mosaic also helps SMEs gain a competitive edge by
tiles and marble and stone slabs. Portugal is profiling varied US building stone companies,
more competitive on the global building stone trade associations, trade shows, and publications.
subsector market compared to the US market,
and the section focuses on transitioning Portugal’s Section 6 concludes this report with a product-
global success to the US market. by-product summary of the competition,
supply / demand, and opportunity assessments.
Legal regulations and compliance are the The report finds excellent opportunities for
subjects of Section 4. This section includes Portuguese SMEs in all product categories
critical resources that will help SMEs avoid assessed in the report – even granite slabs,
costly mistakes, such as failure to comply with which in 2015 began to rebound to pre-2008
packaging and labeling requirements. Fortunately global crisis import levels. The US ornamental
the ornamental rocks classification regulations rocks market is vastly open to foreign products,
are not highly restrictive, which should simplify particularly those that are competitive in terms
export readiness; additionally, tariffs are fairly of price and customer and product servicing. It
straightforward and low on building materials. is essential for SMEs to understand in developing
Where SMEs will likely encounter the most sustainable relationships with US partners that
significant challenge is finding their way into the they must improve not only Portuguese business
import and distribution network, and Section competitiveness but also offer benefits for US
4.4 profiles the most critical resource for SMEs suppliers. The report concludes by discussing
— Distribution Structure and Channels. This SMEs’ challenges and strengths in the US market
section details the various points of market and operationalizing a model for sustainable
entry for SMEs looking to establish exports for export development.
the US market and comments on how recent
distribution developments, such as dropshipping,
have changed the US distribution network. The
section also provides an overview of relevant
US legislation that SMEs should be aware of in
developing exports for the US market.
Section 5 fosters an “insider’s perspective” of how

to compete effectively within the US ornamental
rocks market. Supply and demand analyses are
conducted for each product category, and the
section details SMEs’ advantages and challenges
in particular markets, such as granite and
stone slabs. In recommending target markets,

Acronyms
ACE Automated Commercial Environment
AEP Associação Empresarial de Portugal
B Billion
BIT Bilateral Investment Treaty
DC District of Columbia
DIY Do-It-Yourself
EU European Union
FDI Foreign Direct Investment
FTA Free Trade Agreement
GDP Gross Domestic Product
HS Harmonized (Tariff) System
IMF International Monetary Fund
K Thousand
M Million
NAFTA North American Free Trade Agreement
NAICS North American Industry Classification System
NES National Evaluation Service
OEC Observatory for Economic Complexity
SME Small to Medium-Sized Enterprise
TPP Trans-Pacific Partnership
TTIP Transatlantic Trade and Investment Partnership
UAE United Arab Emirates
UK United Kingdom
US United States
USGS United States Geological Survey
WTO World Trade Organization

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List of Figures
Figure 1.1 Portuguese Net Contributions to Real Volume One: 9
GDP Growth in Percentage Points
Figure 2.1 Top Ten Countries Exporting Building Volume One: 10
Stone to the US (2014)
Figure 2.2 US Building Stone Imports Market Volume One: 16
Value (Millions) By Country (2014)
Figure 2.3 Top Ten US Building Stone Producers Volume One: 17
(2013)
Figure 2.4 Top Ten US Building Stone Producers Volume Two: 1
(2012)
Figure 2.5 Top Ten US Building Stone Producers Volume Two: 1
(2011)
Figure 2.6 Top Ten Countries Exporting Stone Volume Two: 1
Mosaic Tiles to the US (2014)
Figure 2.7 US Stone Mosaic Tiles Market Value Volume One: 18
(Millions) By Country (2014)
Figure 2.8 Top Ten US Stone Mosaic Tiles Volume One: 19
Producers (2013)
Figure 2.9 Top Ten US Stone Mosaic Tiles Volume One: 2
Producers (2012)
Figure 2.10 Top Ten US Stone Mosaic Tiles Volume Two: 2
Producers (2011)
Figure 2.11 Top Ten Countries Exporting Marble Volume Two: 3
Slabs to the US (2014)
Figure 2.12 US Marble Slabs Imports Market Value
Figure 2.13 Top Ten US Marble Slabs Producers
(2013) Volume One: 20
Figure 2.14 Top Ten US Marble Slabs Producers Volume Two: 3

(2012)
Figure 2.15 Top Ten US Marble Slabs Producers Volume Two: 4
(2011)
Figure 2.16 Top Ten Countries Exporting Granite Volume One: 24

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Figure 2.17 US Granite Slabs Imports Market Value Volume Two: 5
Figure 2.18 Top Ten US Granite Slabs Producers Volume Two: 5
(2013)
Figure 2.19 Top Ten US Granite Slabs Producers Volume Two: 6

(2012)
Figure 2.20 Top Ten US Granite Slabs Producers Volume One: 26
(2011)
Figure 2.21 Top Ten Countries Exporting Stone Volume One: 27
Figure 2.22 US Stone Slabs Imports Market Value Volume Two: 6
Figure 2.23 Top Ten US Stone Slabs Producers Volume Two: 7
(2013)
Figure 2.24 Top Ten US Stone Slabs Producers Volume Two: 7
(2012)
Figure 2.25 Top Ten US Stone Slabs Producers Volume One: 29
(2011)
Figure 5.1 – Stone Mosaic Tiles US Import Volume One: 29
Demand (2011-2015, Millions)
Figure 5.2 – Marble Slabs US Import Demand Volume Two: 8
(2011-2015, Millions)
Figure 5.3 – Granite Slabs US Import Demand Volume Two: 8
(2011-2015, Millions)
Figure 5.4 – Stone Slabs US Import Demand (2011- Volume Two: 8
2015, Millions)

List of Tables
Table 2.1 - Portugal’s US Imported House Linens Volume One: 21
Market Competitors
Table 2.2 - Inconsistencies Among Top Ten US Volume One: 27

Iron Housewares countries (and Portugal) (2011-
2014)
Table 2.3 - Inconsistencies Among Portugal and Volume One: 28

Comparable US Iron Housewares Exporting
Countries (2011-2014)
Table 2.4 - Portugal’s Most Similar and Target Volume One: 31

Competitors in the US Imported Knives Market
(2011-2014)
Table 5.1 - Select Bedspreads Product Volume One: 65

Categories US Import Demand Levels (2011-
2014)
Table 5.2 - Select Bedspreads Product Volume One: 67

2014)
Table 5.3 - Non-printed and Printed Cotton Bed Volume One: 69

Linens Comparison
Table 5.4 - Window Dressings Subsector and Volume One: 73

Product Categories US Import Demand Levels
(2011-2014)
Table 5.5 - Iron Housewares Subsector and Volume One: 76

Product Categories US Import Demand Levels
(2011 2014)
Table 5.6 - Aluminum and Copper Housewares Volume One: 78

US Import Demand Levels (2011-2014)

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Table 5.7 - Knives Subsector and Product Volume One: 79
2014)
Table 5.8 - Porcelain Tableware US Import Volume One: 81

Demand Levels (2011-2014)
Table 5.9 - Ceramic Tableware US Import Volume One: 82

Demand Levels (2011-2014)

Section 1:
Introduction
In 2015, countries around the world continued to recover from
the on-going global crises. Trade flows reflected this crisis with
significant declines. Forecasts for global trade growth in 2016
remain modest at approximately 2%; political instability, currency
fluctuations, and restricted business and personal lending
continue to affect growth (WTO 2016; Banco de Portugal 2016).
There is reason, however, to be optimistic about trade in the short-
term; trade flows are predicted to considerably improve across
2017 to 2018 at a growth rate of 3.5 to 3.8% (WTO 2016; Banco de
Portugal 2016). This report is similarly optimistic about Portugal’s
ability to utilize global trade growth through short and long-term,
sustainable export development strategies in the US market.
1.1 Report Parties
As one of five market reports in the Next Challenge USA project,

this report offers guidance on how Portugal can enhance the
ornamental rocks exports to the US market. Next Challenge USA
was commissioned by the Associação Empresarial de Portugal
(AEP) Chamber of Commerce and Industry of Porto and is
supported by European Union (EU) through the Fundo Europeu
de Desenvolvimento Regional (FEDER) or, in English, the European
Regional Development Fund (ERDF). Part of the wider Compete
2020 project, Next Challenge USA works to improve market access
for over 150 Portuguese small and medium-sized enterprises
(SMEs) through trade facilitation with the United States (US). Next
Challenge USA supports SMEs’ role in fostering sustainable market
development and is orchestrated through a series of reports,
workshops, and seminars, hosted by the Portuguese consulting
group, CH Academy, and their American contracting partner, Marq
Consulting Group.
1.2 Report Focus
This report reflects on general and specific issues that shape

sustainable export development strategies through increased
US market access and growth. The analysis takes into account
the historical origins of Portugal’s export economy, dating back
to Portugal’s 15th century leadership in early mercantilist trade.
Portuguese exports across sectors have remained strong, but the
2008 global financial crisis has had deep effects on Portuguese
trade from which SMEs are still recovering. Specifically, the crisis
and underlying governance factors contributed to Portugal’s
need for financial assistance from the EU and International
Monetary Fund (IMF). After instituting reform with great success:
“the Portuguese economy has made significant progresses in the
correction of a number of macroeconomic imbalances, having
implemented measures of a structural character in several areas”

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(AICEP 2016: 4). The report addresses these examples of general and
specifically Portuguese trade-related triumphs and challenges.
Painting a general economic landscape of Portugal’s current

trade profile, the latest projections from Banco de Portugal (BdP)
indicated growth in gross domestic product (GDP) between 1.5 and
1.7% for 2016. Growth figures were based on increased demand
and continued exports in Portuguese goods and services and
tourism promotion (Banco de Portugal 2016; see Figure 1.1 below).
There is, naturally, a strong link between Portugal’s continued
economic progress and expanding its export market. According
to the BdP (2016), export volume in GDP terms should continue to
recover across the coming years, and the World Bank (2016) expects
Portuguese GDP will rise to pre-2008 crisis levels (Figure 1.1). Five-
year trends show steady progress since GDP declined considerably
from $244.9 Billion (B) in 2011 to $216.4B in 2012 (World Bank 2016).
Figure 1.1 – Portuguese Net Contributions to Real GDP Growth

in Percentage Points (Banco de Portugal 2016)
Source: Statistics Portugal and Banco Portugal.

Note: (p) - projected.
Next Challenge USA’s goal is to improve Portuguese export

competition, particularly through the growth of SMEs, and this
report looks deeply at US, global, European, and Portuguese
competition. The World Economic Forum’s Competitive Index
ranked Portugal as the 38th (out of 190+) most competitive nation for
2015 to 2016; from 2014 to 2015, it was ranked 36th. Portugal’s most
similar export competitors, across a five-year trend analysis, are the
Czech Republic, Greece, Poland, and the UK.1 Portugal consistently
1 The report was written before “Brexit” was negotiated, and the inclusion of the UK among
Portugal’s most similar competitors is subject to these changes.

outcompetes Croatia, Finland, Ireland, and Belgium-Luxemburg; it
occasionally outcompetes the Netherlands, Malta, and Sweden and
is consistently outcompeted by Bulgaria, Estonia, Latvia, Lithuania,
and Slovakia in global trade (WTO 2015).2 However, Portugal’s
position within the World Economic Forum’s Competitive Index
reveals inconsistencies, and this report specifically targets how
inconsistent competitiveness has contributed to Portugal’s overall
competitiveness decline.
Portugal’s position within the top 50 most competitive export

nations has been fairly consistent and reflects the fluctuations in
GDP and post-2008 recovery factors presented above. These factors
have affected Portugal’s export industry. Portuguese ornamental
rocks exports are tracked and calculated under the overall stone
and glass sector. Portuguese stone and ceramics are widely known,
the world over, and have supported Portuguese trade for well over
a century, competitive in quality, availability, and cost. AICEP (2013)
highlights the variety of Portuguese ornamental rocks ranging from
»» limestone – from cream to reddish

»» marble – predominantly white but also cream and pink, light and
dark grey with large crystals, and green
»» several varieties of granite
»» slate with specific geological characteristics.
Looking at a sample of Portuguese ornamental rocks exports, there

has been an average annual decline of 1% since before the 2008
financial crisis. Global ornamental rocks exports from Portugal
performed better than Portuguese ornamental rocks exports to
the US, which decreased by an average annual rate of almost 7.4%.
AICEP (2013) reported that only 4% of Portuguese ornamental rocks
exports are to the US – the largest single-nation export destination.
Total [US] imports of dimension stone3 increased in value to about

$2.37 billion compared with $2.23 billion in 2014… Dimension
stone for construction and refurbishment was used in commercial
and residential markets; in 2015, refurbishment and remodeling
activity of existing homes remained steady compared with those
of 2014. These factors contributed to a steady rise in dimension
stone imports… Apparent consumption, by value, was estimated
to be $2.76 billion in 2015 – a 5% increase from that of 2014 (USGS
2016: 159).
Targeted, sustainable ornamental rocks export strategies for the

US market can boost economic recovery by continuing to stabilize
Portuguese export competitiveness and GDP. With current trade
2 “Consistently outcompetes” is measured by competition in all 4 or 5 years of the trend

analysis; “occasionally outcompetes” refers to competition within 2 or fewer years.
3 The United States Geological Survey (USGS 2016i) defines dimension stone similarly to how
Portugal defines ornamental stone, as: “Dimension stone can be defined as natural rock
material quarried for the purpose of obtaining blocks or slabs that meet specifications as to
size (width, length, and thickness) and shape.”

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growth forecasts, Portugal has opportunities for US exports to
return to pre-crisis levels, although competitors have capitalized
on Portuguese export decline to grow their US market. This report
focuses on how SMEs can restore ornamental rocks exports to pre-
2008 crisis levels through short and long-term sustainable export
development strategies.
1.3 Report Methods
This report presents a market analysis for Portuguese SMEs looking

to develop their export strategy for the US ornamental rocks market
by focusing on six unique factors that influence sustainable strategy
development, including:
»» Internal (US) competition

»» Export competition (global and European)
»» Legal regulations and compliance
»» An insider’s perspective of the US market
»» Portuguese strengths and challenges.
The analysis of these factors produces an assessment of Portuguese

ornamental rocks exports competitiveness in the US, the world’s
largest imported goods market outside of the European Union
(WTO 2015ii). The assessment relies on primary and secondary data
and qualitative and quantitative research methods, such as
»» one-on-one interviews with US companies

»» customized surveys
»» secondary research
»» case studies
»» comparative and statistical analysis
»» econometric forecasting and modeling and
»» data collected and cleaned from the United Nations’ Commodity
Trade Statistics Database (Comtrade) by the Observatory for
Economic Complexity (OEC) and report parties.
These methods were selected based on their appropriateness

and effectiveness in addressing the needs of the report. For
example, the analysis requires in-depth, regional, and state-
specific information from American ornamental rocks importers,
distributors, wholesalers, retailers, and trade associations. Interviews
are the most appropriate primary source for this data; whereas,
competition analysis is most appropriately conducted through
statistical and econometric analyses. After cross-checking sources of
statistical data — such as the World Trade Organization (WTO), IMF,
World Bank — the report uses Comtrade as its primary source.
The OEC, a project conducted by the Massachusetts Institute

of Technology’s Media Lab Macro Connections Group, provides
collection, cleaning, filtering, sorting, and organization of

Comtrade’s data and thus, is the predominant secondary data
source in the report. Except where explicitly cited, the data
referenced in the report is from OEC (2014). Global, regional, and
national trade data is compiled into large datasets, and time is
required to process and clean this data. For this reason, the report’s
most recent data, in most cases, is from 2014. Data from 2016 is
not yet available, and data from 2015, in some cases, is not yet
processed.4
An expansive discourse exists on varied methods for collecting

and analyzing data, the methods employed in the report are
consistently deemed the most appropriate across industries and
individuals. For example, the report uses interviews with US sector
executives to understand the challenges to Portuguese ornamental
rocks exporters. The method is designed to fit the nature of the
inquiry. Similarly, the report aims to minimize detail that does
not increase clarity, such as assessing Portugal’s top ten export
competitors rather than top 20.
1.4 Report Subsectors and Product Categories
The report assesses export development and growth opportunities

in the broad subsector and detailed product categories:
1. Building stone
2. Stone mosaic tiles
3. Marble slabs
4. Granite slabs
5. Stone slabs.
For the majority of this report, the “unit of analysis” is at the product
category – not subsector – level to provide SMEs with the most
comprehensive information and assessment of export opportunity.5
Where appropriate, the report analyzes the subsector; however,
the product categories provide highly detailed information on the
products that the US and Portugal trade and that are in demand.
For example, Sections 2 and 3 focus on the subsector of building
stone and the four product categories – stone mosaic tiles, marble
slabs, granite slabs, and stone stones). In Section 5, the report
analyzes US building stone demand, and this includes the building
stone subsector, the four product categories listed above, and other
product categories that are highly in-demand on the US import
market. The report examines these additional product categories to
compare and contrast competitiveness and opportunities for SMEs.
4 Comtrade has data from 2015, and it is utilized throughout the report where appropriate;
however, their data does not take into account exports that are refused by US Customs and
Border Protection. OEC’s data does.
5 The “level of analysis” featured in the report is as follows: industry (ornamental rocks), sector
(stone and glass), subsector (building stone), and product category (stone mosaic tiles and
marble, granite, and stone slabs).

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1.5 Conclusion
The report is structured by the five analytical factors presented in

Section 1.3. The first factor (Section 2: internal competition) provides
a detailed snapshot of the extensive competition SMEs face in the
US market. Section 3 examines Portugal’s global and European
competitors, focusing on each subsector to demonstrate how
access to the world’s largest single-nation import market could
potentially impact Portugal’s trade competitiveness. This section
also addresses how Portugal can outperform EU competitors like
the Czech Republic and Spain.
Following the complete competition analysis, Section 4 transitions

to legal regulations and compliance issues – essential information
for SMEs in all stages of export development. The fourth analytical
factor provides Portuguese SMEs an insider’s perspective of the
US market in Section 5, including the importance of trends that
are often discounted by European exporters whose markets rely
more on tradition. The section’s key theme is that exporters have
myriad options for entering the US market, and SMEs should be
prepared to adapt and revise existing export models specifically
for the US. Possessing market intelligence, understanding market
structure, and developing a smart, informed export strategy are
effective tools that support cost-effective strategies that deliver
returns on investments. Section 6 reviews the findings of the
previous sections’ competition and supply / demand analyses and
uses this information to take a sophisticated approach to cost-
benefit analyses by examining Portuguese SMEs’ strengths and
challenges in the US market. This section offers a comprehensive
understanding of the dynamics of the US ornamental rocks market,
along with general strategies and specific tools for increasing
Portuguese exports to the US.

Section 2:
Internal (US)
Competition
2.1 Introduction
The US, the largest single-country import destination for goods

and services, is a highly competitive market. Compete 2020, Next
Challenge USA, and the report all focus on competition because of
the dynamic nature of the US market. The American market has the
unique ability to easily replace one exporter’s products with another
if products do not conform to price and quality expectations. This
section profiles US building stone competitors.
A frequency analysis is used to determine the top overall competitors.

Then competitors within specific subsectors (stone mosaic tiles,
marble slabs, granite slabs, stone slabs) are analyzed. Because
competition is the focus, the analysis highlights countries that
Portugal has potential of outcompeting in the US market. Drawing
on these analyses, the section makes preliminary recommendations
for Portuguese SMEs in specific subsectors based on US import
competition. The section aims to provide a snapshot of competition
in the US ornamental rocks market that begins to form a picture of
competition and opportunities for Portuguese SMEs.
2.2 Top US Producers
This section presents the most competitive building stone countries

exporting to the US and addresses the general state of competition
in the US market. The following section reflects on the specific state
of US import competition in the four product categories selected
for assessment. This discussion features the top eight ornamental
rocks US exporting countries (listed below), Portugal’s ranking, and
Portugal’s most significant US competitors. Through a frequency
analysis of the product categories assessed in Section 2.3 from 2011 to
2014, the report finds that the top US building stone producers are:
»» China
»» Italy
»» Spain
»» France
»» Portugal
»» Turkey
»» India
»» Canada.

• 21
It is not surprising to see China and Italy at the top, as both
countries control large quantities of building stone deposits within
their borders. Both China and Italy have historically been highly
competitive in the exportation of granite and marble, particularly.
In the other product categories (stone mosaic tiles and stone slabs),
China is also highly competitive due to a large labor force and
low component costs, and a US trade association representative
explained China’s increasing competitiveness in depth.
When you start looking at China, you’re in a whole new

dimension. The Chinese companies are set up differently, and it’s
really their cost structures. Their labor cost is so cheap. Their real
estate is cheap. They tend to have huge expanses of shop area
with hundreds of employees. In the US, they make resin lines by
machine that will automatically apply resin. In China, they’ll mix
the resin and apply it by hand because it’s cheaper than buying
the equipment.6
Italy continues to be a strong competitor in marble and granite

slabs for similar reasons. Given their relative country size and large
workforce, it is also not surprising to see India, Canada, and Turkey
as top US building stone producers.
The commonalities between most of these exporters are high

production volume and low production costs – with limited
exception to France and Canada – including materials, labor,
industrial real estate, and maintenance. India and China have some
of the lowest production costs as lower-middle income countries,
and Turkey would follow as an upper-middle income country; Italy,
Canada, France, and Spain, like Portugal, are high-income countries
(World Bank 2016). Italy, and to lesser degrees France and Spain, is
well-known for their high-quality building stone products, and it’s
comparative and competitive advantages are similar to Portugal’s.
Canada’s competitiveness is likely due to its abundant natural
resources, including building stone quarries, geographic proximity
to the US, and inclusion in a comprehensive preferential trading
agreement, the North American Free Trade Agreement (NAFTA).
Several countries appear in the frequency analysis that have high

trade values within the US building stone market, and yet do not
appear in the top competitor list. Brazil is highly competitive as
a US building stone exporting country; however, the majority of
its production is focused in the worked granite product category
of building stone, which is outside the scope of this report for
reasons discussed in Section 2.3. Portuguese SMEs should be
aware that Brazil is a top building stone US competitor, but Brazil
is not a top competitor in the four specific subsectors (stone
mosaic tiles, marble slabs, granite slabs, stone slabs) that are the
focus of this report.
Additionally, Greece can be competitive in the US building stone

market, though they were not frequent top competitors. Greece
6 Interview 7, Appendix 3.

and Portugal share similar building stone quality and production
levels, but Greece failed to ensure export volumes were consistently
maintained over the four-year period in this analysis. Political,
economic, and structural instability are likely causes of Greece’s
inconsistent export volume. Conversely, France was a very consistent
competitor in each subsector over the past four years, though total
US market value was lower than other top exporting countries.
Competitiveness in the US building stone imports market

appears to be deeply linked to production costs and quality,
and from this, the report makes an early finding that price
competitiveness in the US market is likely a pivotal factor for
SMEs. A US building stone importer and distributor confirmed
that their materials buying process is: “absolutely based on price,
although it depends on how demand fluctuates. For example, if
marble is popular in a given year, we’ll look to whoever is selling
it cheapest.”7 However, a US trade association representative
advised SMEs should be careful in lowering prices to access
the US market. “It’s never smart to compete on price because
someone is going to beat you, especially with China in the
market.”8 Additionally, as US incomes continue to rise and
consumer demand for building stone increases, and as numerous
other countries offer their products as substitutes, the report
finds that consistent demand-based availability of building stone
products will be imperative for SMEs’ success in the US market.
Portugal is a global leader in building stone product; therefore,
consistent export volume and US market monitoring is well
within the capacity of SMEs.
This preliminary finding does not suggest that Portuguese SMEs

will have difficulty being competitive in the US market; rather
that geographic proximity and low production prices most affect
US market competitiveness. On the contrary, this is excellent for
Portuguese SMEs, as they are closer than other European and
Asian competitors and some Latin American producers. Portugal
is also able to leverage low import and labor costs to maintain and
enhance competitiveness. Additionally, Portugal produces both
standard and high-quality building materials, which allows it to
compete with competitors like India on the lower end of the price
bracket and Italy on the higher end. When asked what Portuguese
SMEs would need to do to get one US retailer’s business, she simply
replied: “present a high-quality product”.9
Within the entire building stone subsector, Portugal was a top

US exporting country three times (2011-2013). However, across the
four product categories Portugal typically was not a top ten US
exporting country. Within these product categories, Greece and
Spain were generally Portugal’s closest competitors. Greece was
more competitive in marble; it was a top US exporting country all
four years (2011-2014). A historically strong marble market within
Greece has propagated US import demand, though future stability

• 23
concerns could jeopardize competitiveness. Portugal possesses
similar quality marble compared to Greece, which will support
SMEs’ export development for the US market, and similar conditions
apply to Portugal’s similar market and product quality conditions
with Spanish marble and granite. Spain was a top US exporting
country in granite (2011-2014) and marble slabs (2011-2014).
This section has highlighted that countries with low production

costs that produce low-cost building stone products are most likely
to be top US competitors. Portuguese industry continues to benefit
from low taxation, production, labor, and import (shipping, tariffs,
etc) costs. The challenge for SMEs – beyond finding their target US
market – will be ensuring products remain competitive as high
prevalence of advanced education and advanced manufacturing
shapes the future of Portuguese competitiveness. Additionally,
as Portugal continues to recover from the 2008 global financial
crisis, measures to correct the excessive fiscal deficit – imposed
by both the European Commission and IMF – may impact SMEs
and Portugal’s export development and growth in the US market
(European Commission 2016).
2.3 US Ornamental Rocks Market Competition
After profiling the top US building stone exporting countries, this

section explores the countries dominating the US market at the
subsector (building stone) and product category level (stone mosaic
tiles, marble slabs, granite slabs, stone slabs) by examining five-year
trends. These product categories were selected for analysis following
an examination of Portuguese export volume, US import demand,
export and import competition, product value, and industry factors,
such as Portugal’s transition to advanced manufacturing.
The analysis of US competition begins by profiling the building

stone subsector competition in the US import market. This is
followed by stone mosaic tiles, marble slabs, granite slabs, and
stone slabs.10 This assessment of internal competition across the
building stone subsector and product categories provides a solid
foundation for the report’s recommendations for Portuguese SMEs’
export development and growth in the US market.
2.3a Building Stone Subsector

Out of almost 1200 global product subsectors, building stone
is the 279th most traded and 998th most complex product
(OEC 2014). This subsector includes mosaic tiles, artificial chips,
marble, travertine, alabaster, calcareous stone, and granite, both
worked (finished) and slabs (unfinished). The US is the top export
destination for this subsector, and the combined value of the next
four largest importing countries (Japan, Saudi Arabia, Germany, and
the United Arab Emirates, UAE) was less than the total US import
market value. Figure 2.1 shows top ten exporting countries’ US
10 All Harmonized Tariff System (HS) codes are featured in Appendix 2 in Volume Two of
this report.

market share for building stones imported in 2014. Of the $2.61B US
market, Figure 2.2 shows each of the top ten 2014 building stone
exporting countries’ market value when Portugal’s share was 0.7%.11
Figure 2.1 – Top Ten Countries Exporting Building Stone to the

US (2014
◼ Brazil
◼ China
◼ Italy
◼ Turkey
◼ India
◼ Canada
◼ Spain
◼ Mexico
◼ Greece
◼ Other Asia
◼ Portugal
Figure 2.2 – US Building Stone Imports Market Value (Millions)

By Country (2014)
◼ Brazil
◼ China
◼ Italy
◼ Turkey
◼ India
◼ Canada
◼ Spain
◼ Mexico
◼ Greece
◼ Other Asia
◼ Portugal
In 2013, the total US import market for building stones reached

$2.67B. Figure 2.312 shows the top ten US exporting countries’ market
share. Portugal possessed 0.6% or $16.9M of this market. The total
market decreased by 2%, falling to $2.61B from $2.67B. This market
loss was mostly absorbed by Other Asia13, China, and Brazil. Some
notable changes in this market between 2013 and 2014 were that
11 The terms market value and market share are used consistently in the report. Market value
is measured in currency, and share is a percent.
12 See Appendix 1 in Volume Two of this report for all Figures after 2014 across product
categories.
13 Other Asia is a conglomeration of free trade zones, “bunkers” and several Asian nations
where original export location cannot be determined at the country-level.

• 25
China and Brazil continued to occupy nearly half of the market, and
Greece increased its competitiveness to secure a position in the top
ten US exporting countries. Greece’s gain appears to be Portugal’s
loss, as it dropped from the list of top US competitors to the eleventh
largest US exporting country. However, Portugal continued to
increase its market presence despite the decline in competitiveness.
In 2012, the US building stones market value was valued at $2.21B.

Figure 2.4 reveals the top ten exporting countries’ US market
share. Portugal’s market value was $15.1M, corresponding to 0.7%
in market share. Over the year period, the total market increased
by $570M, peaking at $2.67B for all four years. Brazil, the top US
exporting country, further expanded its market value to $732M,
a 36% single-year increase. Other countries that expanded their
market from 2012 to 2013 included Italy, Turkey, Spain, and
Portugal; Canada was the only top exporting country that did not
enhance their market value in this year. Portugal increased its
competitiveness and market value by 11%.
In 2011, the total US building stone import value reached $2.01B.

Figure 2.5 shows the top ten exporting countries’ US market share;
Portugal’s market share was 0.8% – the highest of all four years –
and value was $15.7M. The US value for building stones increased by
10% to $2.2B. Some notable changes were that Italy’s market value
increased significantly, relative to its market share – 18% or $354M
– and Brazil, China, and Canada also significantly increased their
competitiveness. The top US exporting countries did not fluctuate
during this year; however, Portugal and Mexico declined in market
value, Portugal by $600K.
Building stone accounted for 0.12% of US imports in 2014 ($2.19

Trillion), and in this four-year period, the US building stone market
experienced fluctuations. The average annual growth rate was 1.7%,
which is slow; however, the singular decline from 2013 to 2014 is the
main explanatory factor in the low growth rate. Comtrade (2016)
suggests that the US building stone market grew by 4.2% between
2014 and 2015. The slight decline in 2013-2014 may be viewed as
an aberration from an otherwise healthy marketplace with fairly
consistent growth. The total market experienced three years of
impressive growth from 2011-2013, growing at highly impressive
rates of over 10% each year.
The overall growth of the building stone market facilitated the top
exporting countries’ ability to maintain their competitiveness. The
ranking of the top exporting countries was highly consistent, with the
top eight countries (Brazil, China, Italy, Turkey, India, Canada, Spain,
Mexico) remaining top competitors throughout all four years. The
only fluctuation to the top ten competitors was Greece’s ascension
in 2013 to 2014, coinciding with Portugal and Other Asia’s decline
in competitiveness. A top US importer and retailer interviewed
contributed that his supply confirmed these findings about the top
US building stone exporting countries’ competitiveness.
We import from China, Brazil, and India, primarily. The quality

from those places varies dramatically as expected. The business
owner owns quarries in Greece, and we buy a lot from Spain

though mostly tile not slab. I’m not aware of any Portuguese
products we hold, but I’m sure the owner has seen such stones.14
At the top of the competition, Brazil and Italy grew at a four-

year annual growth (non-compounded) rate of 10.4% and 11.6%,
respectively. China, the other member of the top three exporting
countries, expanded at only 6%. This may suggest that Brazil and
Italy have competitive advantage(s) over Chinese building stone
through increased export volume, pricing, and / or improved
client relationships. Inclusion in NAFTA and geographic proximity
appeared to benefit Canada and Mexico. However, Canada’s
average annual growth rate was not as significant at less than 3%,
and Mexico’s market value declined over four years by 2%.
Among European competitors, Italy and Spain controlled the

majority of the market share. Italy’s reputation for high quality
building stone most likely enhances its competitiveness in the
US market, and SMEs should consider developing comparable
advantages of Portuguese building stone or offering improved
pricing, availability, invoicing, etc to gain a foothold in the US
market. Greece significantly improved its competitiveness, over
43% from 2013 to 2014 or a four-year growth rate of 18.5%. Most
of Greece’s enhanced competitiveness was in marble slabs, the
subject of Section 2.3c. As Portuguese building stone compares
to the quality of Italian, Spanish, and Greek, pricing flexibility,
relationship building, and export readiness are factors that can
assist SMEs in gaining US market access.
Other top competitive countries experienced somewhat slow

but steady growth rates. Turkey grew at 4.2%, India at 2.2%, and
Portugal by 4%. Other Asia experienced a negative growth rate of
7.6%. Beyond the top ten, competition did fluctuate in this market.
As some countries continued to expand competition in the US
marketplace for building stone, others declined. For example,
Peru and Israel fell by over 6.7%. Indonesia, Egypt, and Switzerland
declined by 3.7%.
Peru, Other Asia, and Greece continue to be Portugal’s most

significant competitors in the US building stone market. Between
2011 and 2014, Portugal’s average competitor rank was 10th. Peru
and Greece both featured an average rank of 12th, despite Greece
recently outcompeting Portugal, and Other Asia’s average rank
was ninth, despite also being recently outcompeted by Greece. In
the scope of the other three Compete 2020, Next Challenge USA
studies completed by the report parties, Portugal was typically a top
US competitor at the subsector level once, which is on par with the
findings of this report. However, this report goes into further depth
by exploring US competitiveness at the product category level, and
considering Portugal’s excellent performance at the subsector level,
it will be interesting to see which product categories Portugal is a
top competitor in and the levels of US import demand (Section 5).

• 27
SMEs will be aware that in markets where Portugal is already
a top competitor there are advantages and disadvantages. An
advantage will be product, origin, and quality recognition, and
a disadvantage will be competing with producers that have
established their market in the US market. To balance these pros
and cons, SMEs must ensure they have a clear target market and
competitive advantage in the US. Competitive advantages can be
built on product quality, price, availability, and servicing, but their
ability to enter this market will be highly dependent on building
relationships in the US, which will require resource investment.
Portuguese SMEs should view the building stone market in the US as

an excellent opportunity for export development overall with overall
market growth and enhanced Portuguese competitiveness. As the
US recovery from the 2008 financial crisis continues to improve,
household incomes have also risen. As a result, US suppliers will
continue increase demand for imported building stone as part of
new building and remodeling projects – the subject of Section 5.3.
To gain a competitive advantage over other exporting countries,
Portuguese SMEs looking to enter the US building stone market
should look to establish strong relationships with US suppliers,
which could present some difficulty considering the proliferation of
Portuguese producers that have an established US market. Therefore,
fundamentals like price competitiveness and availability are likely
to be key for SMEs’ export development. As highlighted by a trade
association representative: “by what method can you get the end
product in place within lowest cost is always going to win.”15 The
remainder of Section 2.3 examines the product categories where
SMEs can be particularly competitive when building their US market.
2.3b Stone Mosaic Tiles

Out of almost 4600 global product categories, stone mosaic tiles are
the 3296th most traded and 3522nd most complex product (OEC
2014). The US is the top export destination for this product category.
Similar to the building stone subsector, the total market value
for the next top export destination countries – United Kingdom
(UK), Qatar, France, and Germany – combined was less in 2014
than the US, demonstrating the scope of opportunities for SMEs
in developing exports for the US. Figure 2.3 shows the top ten US
exporting countries’ market share for stone mosaic tiles imported
in 2014. Of the $74M US import market value, Figure 2.4 shows each
of the top ten 2014 stone mosaic tiles exporting countries’ market
value, compared to Portugal’s 0.28% market share.

Figure 2.6 – Top Ten Countries Exporting Stone Mosaic Tiles to
the US (2014)
◼ Canada
◼ China
◼ Turkey
◼ Japan
◼ Italy
◼ Mexico
◼ Indonesia
◼ Hong Kong
◼ Israel
◼ India
◼ Portugal
Figure 2.7 – US Stone Mosaic Tiles Imports Market Value

◼ Canada
◼ China
◼ Turkey
◼ Japan
◼ Italy
◼ Mexico
◼ Indonesia
◼ Hong Kong
◼ Israel
◼ India
◼ Portugal
In 2013, the US stone mosaic tiles market value reached $69.5M.

Figure 2.8 shows the top ten exporting countries’ US market
share. Portugal held a 0.22% market share, with a market
value $152,000(K). From 2013 to 2014, Portugal increased in
competitiveness, controlling 0.28% in market value ($207K). The
most notable change from 2013 to 2014 was the continued rise of
China’s market presence; its market share increased from 23% in
2013 to 28% in 2014, resulting in an addition of $5.5M in market
value. Pakistan experienced a deep contraction in competitiveness
as Israel and Japan rose in competitiveness, the latter gaining an
impressive $3M from 2013 to 2014.
In 2012, the total US market for stone mosaic tiles was $56.6M.
Figure 2.9 highlights the top ten US exporting countries market
share when Portugal had a market value of $88K and share of
0.16%. The total market during this year increased by 22% to $69.5M.
Portugal doubled its market value size during 2012, increasing from
$88K to $152K, and this significant increase in market value followed
a slight downturn in US stone mosaic tiles imports from 2011 to

• 29
2012. China and Canada were the main conduits of growth, gaining
$6.4M and $7.8M respectively, and Japan and Italy both experienced
decline in market share and value.
In 2011, the US import value of stone mosaic tiles reached $58.3M.

Figure 2.10 shows the top ten US stone mosaic tile exporting
countries. Portugal’s market share was 0.15% and value $86K. The
total market declined by 3%, reduced to $56.6M from 2011 to 2012.
Some notable changes from 2011 to 2012 were that China and
Canada suffered the majority of the market losses, though Spain’s
share also declined, removing it from the top ten competitors.
Several other countries improved their competitiveness, such
as Japan, Hong Kong, and Italy, which grew 7%. Portugal’s
competitiveness also increased, despite the market’s overall 3%
decline; its value increased 34% in a single year.
Overall, the stone mosaic tiles exhibited inconsistent growth and

occasional declines over the four-year period; however, the market
has experienced an average annual growth rate of 6.7%, which is
excellent. Canada, China, and Turkey are consistent top competitors,
and an exporting countries’ inclusion in NAFTA, such as Mexico’s,
appears to affect competition. Another finding highlights China
and Canada’s market dominance. In 2013, they occupied over 82%
of the total market; in 2015, their dominance was reduced to 74%
(Comtrade 2016). With Canada and China becoming less dominant
in this market, other top competitors, such as Turkey and Japan,
could look to increase their market shares and values.
Italy remained the largest European country exporting to the US

through these four years, but it lost 42% of its market value from
2011 to 2014, from $5.5M to $2.1M. Italy’s continued competitiveness
– despite this level of decline – suggests that other competitors are
not benefiting from Italy’s losses. This decline in Italian stone mosaic
tiles could signify a reduction in US consumer demand – perhaps a
result of increased competitiveness from exporting countries, such
as Turkey, materials substitution, or price volatility.
With Italy, the major competitor in this US market, becoming less

competitive, and there are enhanced opportunities for Portuguese
SMEs’ exporting stone mosaic tiles in the US market. Portugal
consistently remained the fourth largest European exporter to
the US of stone mosaic tiles, trailing Italy, Greece, and Spain.
Portugal’s performance in the US stone mosaic slabs market
has also seen consistent improvement; its 0.08% market share
increase from 2013 to 2014 resulted in a $55K market value increase.
The report encourages SMEs to identify and leverage their US
export improvement in this product category when developing
relationships with US suppliers.
Portuguese SMEs should also leverage the fact that this market is
becoming more diverse to promote their competitive advantages
to US suppliers. In some markets, increased diversity can contribute
to a decline in product quality. With an existing and increasing
reputation for product quality, SMEs should find that country of
origin recognition will support entry into the US stone mosaic
tiles market. For example, from 2011 to 2012, Portugal was ranked

17th in this market and declined to 19th in 2013; however, in 2014,
export volume and value increased, which elevated Portugal to
14th among all countries exporting stone mosaic tiles to the US. Its
most similar competitors are France – average rank for all four years
17th, same as Portugal – Greece (average rank 14th), and Germany
(average rank 20th). It will be important for Portugal to ensure that
the progress that it has made in this market is not eroded, and in
this regard, ensuring consistent export volume may be key.
Comtrade (2016) reveals that the US import market for stone

mosaic tiles continued its upward trajectory in 2015, increasing
by an astounding 25%. This level of growth is likely related to the
continued recovery and robustness of the US housing market
and / or further investments in infrastructure projects. As the
US continues to recover after the financial crisis at a somewhat
accelerated pace compared to Europe, there are positive signs for
Portuguese SMEs’ export development for 2017 and beyond in the
US stone mosaic tile market. Positive employment increments
and the revelation of a 5.2% increase in median household income
over 2015 further suggests that the market will continue to grow
(Proctor, Semega, and Kollar 2016). With increased employment
and income, US suppliers and consumers are likely to slowly return
to pre-2008 levels of home improvement investment projects – a
positive development for SMEs that can be export ready for 2017.
2.3c Marble Slabs

Out of almost 4900 global product categories, marble slabs are
the 1538th most traded and 4072nd most complex product (OEC
2014). This product category includes cut or sawn slabs of marble,
travertine, or alabaster. With imports exceeding $65M, the US is
eighth largest importer of marble slabs in the world as of 2014, and
it is unusual for the US not be to the top or second largest export
destination for global products. Section 5 will explore if US demand
for this particular product category is lower in comparison to other
building stone product categories. Figure 2.11 shows the top ten
2014 US exporting countries’ market share, and Figure 2.12 lists each
of the top ten exporting countries’ market value when Portugal
occupied 0.39%.
Figure 2.11 – Ten Countries Exporting Marble Slabs to the US

(2014)
◼ Italy
◼ Peru
◼ China
◼ Turkey
◼ Mexico
◼ Greece
◼ Spain
◼ Brazil
◼ India
◼ Egypt
◼ Portugal

• 31
Figure 2.12 – US Marble Slabs Imports Market Value (Millions)
By Country (2014)
◼ Italy
◼ Peru
◼ China
◼ Turkey
◼ Mexico
◼ Greece
◼ Spain
◼ Brazil
◼ India
◼ Egypt
◼ Portugal
In 2013, the US import market for marble slabs value reached

$73.1M. Figure 2.13 reflects the top ten US exporting countries’
market share. Portugal controlled 0.65% of the market, or $477K.
Between 2013 and 2014, Portugal’s US market declined by nearly
half to $255K. The total market value of US imports of marble
slabs declined by 11% during this period to $65M, which affected
the majority of the top competitors. Italy and Peru’s market
value declined by 14% and 30% respectively. Greece, Egypt, and
China’s market value also declined slightly, but there was little
to no alteration in market share composition. Few countries
increased their competitiveness during this time period with
Brazil, Turkey, Spain and India being the exceptions. Mexico’s
US exports decreased by 14%, which was the third year Mexico’s
competitiveness declined by double digit figures.
In 2012, the US import market for marble slabs value was valued at
$63.5M up 13% from the previous year. Figure 2.14 highlights the top
ten US exporting countries’ market share. Portugal controlled 0.6%
of the market share ($386K). US imports for marble slabs continued
its strong performance recorded in the previous year, expanding
by 15% from 2012 to 2013. Some notable changes from 2012 to
2013 were that Italy, Greece, and China continued to increase their
competitiveness, while Turkey, Mexico, Israel, and the Dominican
Republic declined – the latter two experiencing more significant
market decreases. Brazil continued its steady improvement in
competitiveness through 2011 and 2012, joining the top US marble
slabs exporting countries for the first time. A US marble importer
and distributor explained that: “Brazil offers high-end products, and
they are big producers of the hot ticket items now”.16
In 2011, US imports for marble slabs reached $56.4M. Figure

2.15 displays the top ten US exporting countries’ market share.
Portugal’s market share was 0.5%, and value was $301K. From 2011
to 2012, Portugal increased its market value by $85K. Other notable
changes involved Italy continuing to work towards a majority US

marble slabs exporting country, controlling 40% of the market;
Israel emerged as a top US marble slabs exporting country, rising
from the 13th to the 7th largest. Mexico and China’s market value
declined by over 20%, and another top ten exporting country, the
Dominican Republic, fell to the forty-first position. Peru – historically
the second largest US producer of marble slabs – experienced
a $200K market value increase, but its market share decreased
from 19% to 17%. From 2011 to 2012, there were significant
competitiveness changes in this US import market.
Overall, the market for marble slabs in the US has exhibited

inconsistent growth and occasional declines over the four-year
period. It appears that 2013 and 2010 (outside the four-year scope)
were peak years for the US marble slabs market. In 2010, this market
was valued at $70.2M and in 2013, $73.1M. In the in-between years
of 2011, 2012, and 2014, the market has attempted to return to peak
levels. From 2011 to 2014, the market grew at an average annual
growth rate of 3.8%, which continues to be positive and solid growth.
Italy and Peru were consistent top competitors, controlling a

maximum of 61% of the market in 2013. Mexico’s geographic
location and inclusion in NAFTA appears to have supported its high
level of competitiveness, although it experienced three consecutive
years of significant decline (-24% in 2011, -17% in 2012, and -14%
2013), Mexico has only dropped from third to fifth largest US
marble slabs exporting country. This suggests two key findings for
Portuguese SMEs.
First, NAFTA / geographic proximity to the US may be less important

than factors like pricing, availability, and quality reputation, as the
report parties learned from a US quarry, importer, and retailer.
“We go with quality and reputation and how long we’ve dealt with
that entity. We’re pretty loyal to our producers because we deal on
reputation of the producer.”17 Secondly, the US marble slabs import
market is open to new competitors. India and Brazil are examples
of new competitors that have used their competitive advantages to
growing their markets.
Among the top European competitors, Greece and Spain alternated

between second and third largest European exporting countries.
The consistent competitiveness between these two countries – as
well as Peru and Italy – suggests that success within the US marble
slabs market is predicated on not just reputation and availability
but also quality and variety. A US ornamental rocks import and
distributor that deals mostly in Italian marble explained that they
are: “less price oriented. For us, it’s definitely all about the quality
and the look… Greek marble has a lot of history, [but] on the whole,
they offer slightly less varieties.”18
Italian marble has become synonymous with luxury within the

US, or as Little (2014) says: “Italian design is the epitome of luxury”.
However, Italy suffered a 14% market value decline in 2014;

• 33
Comtrade (2016) suggests that from 2014 to 2015, not only did they
rebound entirely from this decline, they grew another 4% for a total
one-year market value improvement of 18%. Interestingly enough,
the volume of marble slabs Italy exported to the US declined by
65%, suggesting that Italy is moving deeply into the US luxury
marble market. This indicates that an effective market entry strategy
for Portuguese SMEs may be offering high-quality marble slabs at
the middle to lower end of the price bracket.
Historically, the most competitive top US exporting countries are

not occupying a majority of the US marble slabs market, or, if they
are – like Italy – they are doing so by establishing dominance in
high (and perhaps low – China) price brackets. This indicates that
competition is dynamic, and the product category represents
good opportunities for SMEs’ export development. If Peru’s average
annual rate of decline (5%) continues – and Comtrade (2016)
suggests Peru declined a further 20% in value and 27% in volume
(net weight) on the US marble slabs market – there could be even
more of a market / supply gap for SMEs to fill, which the report
returns to in Section 5.
Portugal was a consistent top European marble slabs exporting

countries, the fourth largest among European competitors from
2011 to 2013 behind Italy, Greece and Spain. Though in 2012 and
2013 it nearly entered the top ten US exporting countries rank at
12th, Portugal’s market share peaked at 0.65% in 2013. Portuguese
competitiveness declined in 2014, but Comtrade (2016) shows a 79%
increase in market value for Portuguese marble slabs from 2014 to
2015. However, US export volume decreased 7% from 2014 to 2015
(Comtrade 2016). It appears the Portuguese producers on the US
market are, like Italy, targeting the US luxury marble market.
Because US export value of marble slabs has increased while at

the same time volume (net weight) has decreased, this suggests
Portuguese producers are getting a greater product price (value for
money) than in previous years. The importance of this finding – and
again, the report recommends exercising caution in the application
of the finding – is that not only is there a dynamic US market
where new competitors can quickly gain large market values, but
also the US market for marble slabs is open to producers from the
upper to the lower ends of the product price bracket. Moreover,
the US saw a 17.5% total increase in marble slabs imports in 2015;
therefore, the analysis of US import competition finds a vast scope
of opportunities for SMEs in marble slabs (Comtrade 2016).
As discussed in Sections 2.3a and 2.3b, US consumer confidence

levels for September 2016 were registered at record highs, and
household incomes are on the rise in the US, suggesting continual
economic and consumer spending recovery (Conference Board
2016; Proctor, Semega, and Kollar 2016). The dual factors of
increased median household income and improving consumer
confidence levels further suggests that the US marble import
market will continue to increase across all price brackets – high,
medium, and low.
Portuguese SMEs have an advantage in this market in that their

proximity to the US allows for shorter sea transport, a medium
likely used for heavy marble slabs, compared to other market
competitors. As SMEs look to enter the US market, they should
aim to differentiate themselves and their products with enhanced
availability, competitive pricing at all levels of the price bracket,
customer service quality, and product marketing. The US marble
importer and distributor referenced above that sold mostly
Italian marble offered advice for SMEs producing marble for the
US market. “Historically, we see [Portugal] more as a limestone
source, but there are some marbles from Portugal that we would
be interested in. The main reason we don’t sell or have many
imports from Portugal is that we find that they really don’t have
the branding or the existing market that we look for in taking on
new suppliers.” 19 SMEs will need to examine their competitive
advantages and use these points of differentiation as a mechanism
for establishing and increasing US demand – something Section
6.2b discusses further.
Portugal also holds a competitive advantage in terms of national

investment in improving mining technologies. Lopes and Martins
(2012: 7) describe: “particularly in Alentejo marbles, investing in
safety campaigns, hygiene and health in work, as well as developing
the concept of eco-efficient, environmental friendly enterprises and
sustainable value methodology” have improved competitiveness in
Portuguese marble production. Overall, the marble slabs product
category is highly recommended for SMEs export development.
2.3d Granite Slabs

Out of almost 4900 global product categories, granite slabs are the
2029th most traded and 3776th most complex product (OEC 2014).
This product category includes cut or sawn slabs of granite. Figure
2.16 shows the top ten 2014 US exporting countries’ market share,
and of the $33.1M US import market value – down 10% from 2013 –
Figure 2.17 lists each of the top ten exporting countries’ market value,
when Portugal’s share of the US granite slabs market was 0.1%.
Figure 2.16 – Top Ten Countries Exporting Granite Slabs to the

US (2014)
◼ China
◼ Brazil
◼ India
◼ Italy
◼ Canada
◼ Spain
◼ Mexico
◼ South Africa
◼ Other Asia
◼ Switzerland
◼ Portugal

• 35
Figure 2.17 – US Granite Slabs Imports Market Value (Millions)
By Country (2014)
◼ China
◼ Brazil
◼ India
◼ Italy
◼ Canada
◼ Spain
◼ Mexico
◼ South Africa
◼ Other Asia
◼ Switzerland
◼ Portugal
In 2013, the US granite slabs market was valued at $36.8M, down

almost $10M or 25% from 2012. Figure 2.18 displays the top ten
US exporting countries’ market share. Portugal’s controlled
0.05% of the total market, or $20K. Between 2013 and 2014,
Portugal doubled its market share, rising from the 24th to 18th
largest exporting country, and this is notable because many top
exporting countries’ market value declined, due to the $10M
overall market loss. In the fourth consecutive year of overall
market decline, Brazil and Italy lost 27% and 18%, respectively, of
their US granite slabs market value – a combined loss of $4.2M or
almost 10% of the total 2012 market value. While Other Asia and
Spain also declined, China became the top competitor. India and
Mexico increased their competitiveness, as well.
In 2012, the US granite slabs import market in the US totaled

$43.7M. Figure 2.19 shows the top ten US exporting countries’
market share. Portugal held $35K in market value for a 0.08%
share of total market. From 2012 to 2013, there were several
changes in granite slabs competitiveness with the total market
value decreasing by over 15%. Portugal’s market value decreased
$15K or 40%, demonstrating that much of the progress Portugal
made between 2013 and 2014 was recuperation. Starting at the
top, Brazil and China increased their market value and moved
into the first and second most competitive positions. The previous
top US exporting country, India, experienced a 70% market
loss from 2012 to 2013, declining from $12.6M to $3.8M. Other
competitiveness fluctuations included Italy, Other Asia, and Mexico
declining, and Canada, Spain, and South Africa increasing.
In 2011, the US import value for granite slabs was $48.4M. Figure
2.20 displays the top ten US exporting countries’ market share.
Portugal held 0.03% of the US market, a $16K market value. From
2011 to 2012, India became the top exporting country. Portugal’s
market value doubled – rising from the 23rd to 18th largest
exporting country – but market share continued to be below
significant levels (greater than 0.0%). Other top competitors
China and Brazil declined by 28% and 14%, respectively, while
India and Brazil continued their close competition for the top
exporting country rank, valued at $12.6M and $12.5M respectively.

One US retailer interviewed believed that: “95% [of imported
granite comes] from Brazil and India.”20 Canada and fellow
NAFTA partner Mexico decreased in value, as did South Korea
and Belgium-Luxembourg, which resulted in their absence from
the top ten competitors ranking. Saudi Arabia and Other Asia
took advantage of these top competitors’ losses in ascending to
the top ten.
The US import market for granite slabs has been in steady

decline at an average annual rate of -9.1%, and the low product
prices of foreign imports may be responsible for the overall
market decline. A Colorado granite quarry owner reflected on
the recent decline in US domestic and import granite markets.
“The market is inconsistent; it’s just a matter of who is in need.
Anytime there is large scale production, it’s coming from
overseas, and the price coming over is just too low to beat.”21
The report highlights a couple of other potential explanatory

factors; first, marble slabs, quartz, quartzite, and other building
stone may have (temporarily) replaced granite as a matter of
consumer or supplier preference, which the quarry owner above
also indicated.22 Fink (2009) argued that granite in post-2010
builds are as outdated as shag carpet, wood paneling, or vinyl
siding. A US importer and distributor confirmed that they: “have
seen a rise in the popularity of quartz and quartzite, but granite
and marble are always top sellers for us.”23 Another importer and
retailer said that quartz was not a substitute for granite; rather:
“it’s a complement. We haven’t seen quartz take the place of
marble and granite.”24
Second and relatedly, there could be issues with quality control.

The granite imported from China, which became the top US
granite exporting country in 2014, is typically lower grade, and,
as a US trade representative explained, there have been quality
issues with Chinese building stone.
When it comes to importing from China, if you really know what

you’re doing, you’ve been in the industry a long time, and you
have a solid inspection protocol in place, it works well. If not, it’s
a huge risk…China is the biggest cautionary country. They have
some great, quality products, but there are enough products that
aren’t quality that create that caution.25
The granite imported from India and Brazil, which have quickly
accelerated the US competitors’ ranks, is mid-range (Bell 2016;
Ryan 2016). This was also confirmed in interviews with US granite
22 See Interview 13, Appendix 3.
25 Interview 7 Appendix 3.

• 37
quarries. “Brazil offers anything from the cheapest material to
ridiculously expensive stones. China and India are offering lower
prices than everyone in the market, due to their lower production
costs. For people without a specialty stone market like us, it can
be difficult to stay [competitive] in those low cost markets.”26 One
US business commented that cheap, low quality imports from
China have forced them to produce a higher grade of granite, and
this may be how SMEs find their competitive advantage on the US
market, as well.
The Chinese imports have caused us to change the way we do

business a little bit, and now we find ourselves concentrating
more on the higher grade granite because we’re not really
competitive in the lower grade stuff we used to do. But it’s
interesting because we’ve also sold our granite to China for special
projects. We ship out of St Paul (Minnesota); it goes both ways.27
The decline associated with this market could be in product

value, rather than volume, which has a considerable effect on
the overall market value. The combination of the first and second
explanatory factors are likely to have reduced the market for the
high grade granite, which has lowered the overall US import
granite slabs market value as well. Though the US is seeing
a rise in household income and consumer spending, these
developments are recent. Granite is an expensive material, and
with its declining popularity, it may be seen as an unnecessary
splurge, hence cheaper materials like aluminum, brick, concrete,
glass, plastics, steel, quartz, stone fabrication, or laminate may
serve as substitutes.
India, Brazil, and China control a large portion of the US granite

slabs market, and Bell (2016) and Ryan (2016) indicate that the
granite slabs coming from these three countries that hold over
80% of the US market are at the lower to mid-level quality
end. This was also confirmed in interviews. “We deal with a lot
of cheap materials coming from China and India. Brazil is also
big, but offers a pretty wide variety of quality products.”28 Most
of the losses in the US market were absorbed from the largest
exporting countries, which is indicative of their dominance over
the US import market. For example, the total market declined by
$3.7M in 2014; Brazil lost $3.65M in that same year. India declined
by $8.9M in 2012, the year the total market declined $6.9M.
There is a relationship in this market between overall market loss
and top competitors’ loss, but whether the market is declining
because these top competitors are losing value or whether top
competitors are losing value because the market is declining
cannot be determined at this time. Section 5 will inspect this
relationship further. If the relationship is the former and not the
latter, there are opportunities for SMEs.

Nine new top competitors (out of an average 33 annual exporting
countries) emerged during this period of market decline, such as
Saudi Arabia, South Africa, South Korea, and Switzerland. SMEs
will be joining a highly concentrated market, where it will be
easier to identify and market competitive advantages in the low,
mid, or high-grade granite slabs markets. NAFTA and proximity to
the US offer little benefit to Canadian and Mexican competitors –
both with negative average annual growth rates.
Portugal’s performance in the US granite slabs markets has been

steadily improving, and in 2014, US exports rose to significant
levels (greater than 0.0%). From 2014 to 2015, Portuguese granite
slabs US imports increased a further 43%, demonstrating that
despite overall market decline export development and growth
can be positive in this market (Comtrade 2016). Additionally,
Comtrade (2016) reveals a 43% market value increase in US
imports of granite slabs in the past year. This, perhaps, reflects
the increasingly healthy and robust US consumer economy
and boost in consumer confidence. As more households grow
in discretionary spending and home improvement and new
building projects increase, granite demand may increase – the
subject of Section 5. Portuguese SMEs should be aware of the
opportunity available in the granite slabs market but also the
challenges of a market without consistent growth.
Table 2.1 attempts to clarify whether there are greater

opportunities or challenges in the US granite slabs market for
SMEs. By examining US import competitiveness, five exporting
countries were identified as similar to Portugal (in alphabetical
order): Germany, Greece, Philippines, Switzerland, and the UK.
The average net in this market was a $1,500K loss over three
years. Switzerland and the UK are likely Portugal’s most similar
competitors in the US market because each of these competitors
experienced only one annual loss and a similar net gain value.
Greece is also close case for comparison, but its net gain value
was slightly double that of Portugal’s.

• 39
Table 2.1 – Inconsistency Among Portugal and Similar US
Granite Slabs Exporting Countries (2011-2014)
2011-2012 2012-2013 2013-2014

Value Value Value Net Gain
Change Change Change / Loss
Portugal 29 ↑ $19K ↓ $15K ↑ $15M ↑ $19K
Germany30 ↓ $11K ↑ $14K ↓ $7K ↓ $4K
Greece31 ↓ $10K ↑ $31K ↑ $21K ↑ $42K
Philippines32 ↓ $54K ↓ $74K ↑ $7K ↓ $121K
Switzerland33 ↓ $240K ↑ $250K ↑ $25K ↑ $35K
UK34 ↓ $21K ↑ $16K ↑ $31K ↑ $26K
Only two of Portugal’s five similar competitors on the US granite

slabs market experienced net loss, and one, the Philippines,
features starkly different import and production costs (higher
import, lower production costs). This would suggest that this
market is more stable than unstable for Portuguese SMEs,
particularly because Portugal has done well in this market despite
overall decline. SMEs are likely to face similar US market conditions
as these established Portuguese producers supplying the US
market. Weighing these findings, the report suggests that while
there are challenges to the US granite market, there is opportunity
for export development.
SMEs should weigh production, import, and investment costs with

the grade of their granite. If the grade is mid or high, SMEs are
likely to encounter fewer challenges, as the producers of low to
mid-grade granite are the majority of competitors experiencing
decline in the US market. Comtrade’s (2016) data shows increased
values for Portuguese granite slabs exports to the US but declining
volumes (net weight), which would suggest a higher grade
29 Ranked 23rd in 2011, 18th in 2012, 24th for 2013, and 18th for 2014 as a US exporting
country; 21th average four-year rank.
30 Ranked 12th in 2011, 26th in 2012, 19th in 2013, and 21th in 2014 as a US exporting country;
17th average four-year rank.
32 Ranked 28th in 2011, 12st in 2012, 12th in 2013, and 17th in 2014 as a US exporting country;
21st average four-year rank.
34 Ranked 32th in 2011, 21st in 2012, 17th in 2013, and 13th in 2014 as a US exporting country;

of granite as the dollar value to net weight ratio is increasing.
SMEs can benefit from the progress established Portuguese
producers have made in introducing the quality and reputation
of Portuguese granite slabs to US suppliers when marketing their
own products,
SMEs are also advised to research their most similar competitors’

products and identify competitive advantages that can be
leveraged. Price competitiveness within the three grades of
granite will likely be a key to market access, and the importance
of relationship building and customer and product service should
not be underestimated. When the report parties asked a US
stone quarry, importer, and retailer if they would be interested in
Portuguese stone, they replied: “They would have to match the
prices that we’re looking at now, that’s about it. We’ll buy if it’s
cheaper, but we’re loyal to our guys now.”35 If not already in place,
SMEs may be advised to offer product guarantees, particularly in
the windier, stormier, more tumultuous weeks of northern Atlantic
shipping, as this enhanced produce and customer service could
be the deciding factor of a US supplier’s selection of Portuguese
stone over an existing producer’s products.36
2.3e Stone Slabs

Out of almost 4900 global product categories, stone slabs are
the 2865th most traded and 3479th most complex product (OEC
2014). This product category includes cut or sawn slabs of stone
nes37. Figure 2.21 shows the top ten 2014 US exporting countries’
market share, and of the $17.4M US import market value, Figure 2.22
lists each of the top ten exporting countries’ market value when
Portugal occupied 2.1% – the same as Spain – of the US market.
Figure 2.21 – Top Ten Countries Exporting Stone Slabs to the US

(2014)
◼ Mexico
◼ China
◼ India
◼ Turkey
◼ Canada
◼ Vietnam
◼ Italy
◼ Brazil
◼ Dominican Republic
◼ Spain
◼ Portugal
37 Nes refers to “not elsewhere specified” and are commonly thought of as byproducts.

• 41
Figure 2.22 – US Stone Slabs Imports Market Value (Millions) By
Country (2014)
◼ Mexico
◼ China
◼ India
◼ Turkey
◼ Canada
◼ Vietnam
◼ Italy
◼ Brazil
◼ Dominican Republic
◼ Spain
◼ Portugal
In 2013, the US import value for stone slabs was $16.8M – no change
from the previous year – and Figure 2.23 shows the top ten US
exporting countries’ market share. Portugal controlled 1.1% of the
total market share, which yielded a $188K market value. From 2013
to 2014, the total market increased by 3.5%, and several competitors
utilized the opportunity to grow their market, including Vietnam,
Brazil, and Portugal, which doubled their market share. Other
notable changes include Mexico and China expanding their
competitiveness by 35.8% and 13.8%, respectively; Italy’s market
value declined by over 46%, as did India and Canada’s by 7.8% and
7.3% respectively.
In 2012, the US market size for stone slabs imports was $16.8M.
Figure 2.24 shows the top ten US exporting countries’ market
share. Portugal held 0.82% ($138K) in market value. The US stone
slabs import market increased a meager $1.5M, but Portugal – and
other top exporting countries – were able to make significant gains.
Large market value improvements were made by China, Canada,
and Mexico, which rose to the top exporting country, and these
gains were offset by losses in India, Vietnam and the Dominican
Republic’s market value. Indonesia and Turkey also lost market
value, which resulted in their decline from the top competitors list
to France’s benefit.
In 2011, US stone slabs imports were $15.3M. Figure 2.25 displays the
top ten US exporting countries’ market share. Portugal exported
1.1% of the total market value ($170K) of stone slabs imported by
the US. From 2011 to 2012, the market grew 9%, an impressive
annual rate of growth. Other notable changes were that India and
Italy expanded their market share by over 50% from the previous
year while Palestine, South Korea, and France all declined in
competitiveness, removing them from the top ten US exporting
countries. It appeared that Brazil, the Dominican Republic, and
Indonesia seized these countries’ losses as an opportunity to
join the top ten of US stone slabs exporting countries. Portugal’s
competitiveness also declined but only by $30K, shifting from the
16th largest US exporting country to 18th out of 45.

The stone slabs market in the US is the smallest of the four observed
product categories in building stone, but as of 2014, the market
is still growing. Comtrade (2016) reports that US imports of stone
slabs increased a further 10% from 2014 to 2015. With a four-year
average annual growth rate of 3.3%, this market, like stone mosaic
tiles and marble slabs, shows signs of steady growth. However,
unlike stone mosaic tiles and marble and granite slabs, this market
has demonstrated no period of decline; only from 2012 to 2013, the
market did not grow, but neither did it decline.
The top ten stone slabs exporting countries experienced relatively

consistent growth, though there were several fluctuations in
competitiveness rank, which demonstrates that the market is
dynamic and open to (new) competition. At the top of the US
market, Mexico and India have utilized consistent growth to expand
their market; the two controlled under 18% of the total US stone
slabs import market in 2011, and by 2014, this has risen to 30%. The
top five exporting countries in 2014 (Mexico, China, India, Turkey,
and Canada) controlled 60% of the total market. The top five
exporting countries in the entire building stone sector controlled
over 82% of the market. Again, many markets are dominated by one
or two top competitors, and the findings that this market’s top two
competitors control less than a third and top five control less than
two-thirds, reveals excellent opportunities for SMEs.
Portugal was a top European country exporting stone slabs to

the US, and with an impressive average annual growth rate of
20.4%, and SMEs are highly encouraged to seize opportunities in
this growing market. In 2014, Portugal rose from fifth to the third
largest European country exporting to the US. From 2014 to 2015,
Portuguese exports to the US increased a further 8.7% (Comtrade
2016). Italy, the top European exporter of stone slabs to the US, has
an average annual rate of decline of 3.1%. Spain – the second largest
European country exporting to the US in 2014, after an aggressive
campaign to increase its position from the sixth largest – has
overtaken Portugal with an astounding growth rate of 53.1% in the
imported stone slabs market.
Table 2.2 provides an in-depth look at Portuguese competitiveness

in the US imported stone slabs market. It provides a juxtaposition of
exporting countries that were identified as its competitors. Table 2.2
also features Spain’s competitiveness, as it has shown tremendous
growth that Portugal is similarly capable of considering its high
growth rate. Spain should be viewed as a model for SMEs looking to
enter and grow in the US market.

• 43
Table 2.2 – Portugal and Similar Competitors US Stone Slabs
Export Competitiveness
Average
2011-2012 2012-2013 2013-2014
Net Gain Annual
Value Value Value
/ Loss Growth
Change Change Change
Rate
Portugal38 ↓ $31K ↑ $49K ↑ $169K ↑ $187K 20.4%
Brazil39 ↑ $249K ↑ $79K ↑ $103K ↑ $431K 21.5%
France40 ↓ $455K ↑ $28K ↓ $165K ↓ $592K - 22.9%
Israel41 ↓ $226K ↑ $216K ↓ $67K ↓ $77K - 6.2%
Peru42 ↑ $19K ↓ $64K ↑ $140K ↑ $95K - 33%
Spain43 ↑ $131K ↑ $55K ↑ $115K ↑ $301K 53.1%
From Table 2.2, Portugal’s impressive progress in this market is

revealed, with only one year of declining US export value, $187K
in net gains over four years, and over 20% average annual growth.
Comparing Portugal to the other competitors that did not have a
net loss or negative average annual growth rate, the findings reflect:
»» Brazil was, on average, ranked six positions higher in US stone

slabs competitiveness than Portugal, and Spain, on average, was
five positions lower than Portugal.
»» Portugal’s average four-year market value for US stone slabs
exports was $213K, Brazil’s was $617K, and Spain’s was $221K.
While Portugal and Brazil have been growing in this market at a

highly similar rate, Brazil’s 2011 market was three times the size of
Portugal’s. Spain’s growth rate is more than double that of either
Portugal or Brazil, but Spain’s 2011 market was 40% of Portugal’s
2011 US stone slabs export market value.
38 Ranked 16th in 2011, 18th in 2012, 17th for 2013, and 11th for 2014 as a US exporting country;
10th average four-year rank
11th average four-year rank
41 Ranked 14th in 2011, 22nd in 2012, 12th for 2013, and 15th for 2014 as a US exporting
country; 16th average four-year rank
42 Ranked 15th in 2011, 15th in 2012, 16th for 2013, and 24th for 2014 as a US exporting
43 Ranked 22rd in 2011, 18th in 2012, 24th for 2013, and 18th for 2014 as a US exporting

The US imported stone slabs market is an excellent market for SMEs’
export development, perhaps the most secure of all four building
stone product categories. If SMEs have resources in the Spanish
stone slabs export community, developing intelligence about their
US export development and growth strategy would be advisable,
as they have been profoundly successful. Examining Portugal’s and
the top ten US exporting countries, it is likely that relationships,
price competitiveness, and product quality and service are the most
important factors that influence competitiveness on the US market.
SMEs will have the benefit of Portugal’s recent progressive success
in the US stone slabs export market, as Portugal was ranked 11th
in 2014 in the US import market. It is recommended that they use
this success and along with their increasing strong reputation for
product quality in building relationships with suppliers.
2.4 Conclusion
This analysis of US import competition has yielded important

findings, and in many ways forms the core of the report by helping
Portuguese SMEs understand their competition and providing
recommendations for enhancing export development strategy in
the selected subsectors. This section will summarize the findings
and reflect on the top US ornamental rocks exporting countries
and Portugal’s most similar US market competitors.
The report finds overall growth across all subsectors, with minor
exception to granite slabs. Prospects for Portuguese export
development appear strongest in the stone mosaic tiles and
marble and stone slabs product categories. At the subsector level,
the US building stone import market has witnessed overall growth.
Though the US market peaked in 2013 at $2.67B, after a $60M
decline in 2014, the US market has grown another 4% from 2014
to 2015 (Comtrade 2016). The top five exporting countries – Brazil,
China, Italy, Turkey, and India – occupy over 80% of the US import
market, the remainder of the market offers opportunities for
million dollar markets. Out of all the European exporting countries,
Italy ranked first each year not just in building stone, but in each
of the four assessed product categories (stone mosaic tiles, marble
slabs, granite slabs, stone slabs).
Portugal has grown its building stone exports to the US by an

average annual rate of 4% from 2011 to 2014, but competitiveness
has declined recently. In 2014, Portugal lost its position in the
top ten US exporting countries to Greece. Along with Greece,
Peru and Other Asia are Portugal’s most significant competitors
in the US building stone market, which likely indicates that
price competitiveness is the key to continued Portuguese
competitiveness in the US building stone market. Product
quality, customer serviced, and enhanced availability are, likewise,
Portugal’s competitive advantages in this market.
The analysis recommends that SMEs also have a clearly identified

target market, with success highly dependent on building
relationships in the US, which will require resource investment.
The overall US building stone is an excellent opportunity for SMEs’

• 45
export development and continued improvement in Portuguese
competitiveness. The analysis highlighted that enhanced
improvement since the 2008 global financial crisis positions the
US as a uniquely strong market during this period of reduced
global trade flows.
Within the first product category – stone mosaic tiles – the

section’s analysis found that the US market exhibited inconsistent
growth with occasional declines over the four-year period. Despite
these inconsistencies, the US import market for stone mosaic
tiles has grown at an average annual rate of 6.7%, the highest of
all product categories reviewed in Section 2.3. Canada, China,
and Turkey are consistent top competitors, and an unlike other
product categories markets, inclusion in NAFTA carries benefits for
contracting parties.
Unlike the building stone subsector, just two exporting countries

– China and Canada – occupy over 80% of this product category
market; however, in 2015, their dominance reduced to 74%
(Comtrade 2016). With Canada and China’s dominance receding,
market values and shares are increasingly sought after. Italy’s
competitiveness has also declined, from $5.5M in 2011 to $2.1M
in 2014. This combination of declining competitiveness at the
upper ends of the US stone mosaic tile market indicates major
opportunities for SMEs.
Portugal has consistently improved its competitiveness in this

market, and the analysis highlighted that even small market
share increases of 0.08% can result in additional $55K annually.
SMEs were encouraged to leverage this progress, increasing
market diversity and openness, and product quality in attempts
to establish their US market. With the US import market growing
25% from 2014 to 2015, and continued improvements in the
housing market, household incomes, and consumer confidence,
SMEs that are export ready for 2017 will be presented with
numerous opportunities to grow their exports to the US.
If export opportunities for SMEs in the US were (unnecessarily)

ranked in terms of scope, growth, security, and profitability, marble
slabs would likely be tied with stone mosaic tiles for second –
with stone slabs presenting the greatest opportunities. Like stone
mosaic tiles, marble slabs has seen inconsistent growth and
occasional declines. The peak years for marble slabs appeared to
be 2010 through 2013, growing at an average annual rate of 3.8%
with 2014 taken into account, a solid rate. Comtrade (2016) shows
that from 2014 to 2015, the US market for import marble slabs
grew another 4%, and like positive developments at the subsector
level and in stone mosaic tiles, this increase and future predicted
growth are linked to continued economic recovery from the 2008
financial crisis.
Italy and Peru were consistent top competitors, controlling over

60% of the market in 2013, but in certain levels (high, mid, and lower
grades) of marble slabs exports, they are both showing decline in
competitiveness. Unlike stone mosaic tiles, NAFTA appears to have
less of an effect on competitiveness than factors like pricing and

quality reputation. SMEs will find it difficult to compete with Italy,
due to an American consumer and supplier preference for Italian
marble in the luxury marble market, which is where Italy appears
to be growing its US exports. As such, the analysis recommended
SMEs feature a strategy of price competitiveness in the luxury US
marble market while also offer highly competitive products in the
mid to lower level product markets.
Portugal’s competitiveness in this market reflects the overall market’s

ebbs and flows – peaking in 2013, declining slightly in 2014, and value
increasing almost 80% in 2015 (Comtrade 2016). The analysis urged
caution with this finding, as Portuguese export volume in the US
declined somewhat. This finding suggested Portugal was, like Italy,
transitioning competitiveness to the luxury marble market. With this
knowledge, SMEs could look to enter the US market by filling the
supply gap at the lower and middle price brackets.
The US import market for marble slabs increased almost 20%

between 2014 and 2015, and this demonstrates excellent
opportunities for SMEs’ export development, particularly with
increases in household incomes and consumer confidence in the
US. SMEs can likely locate competitive advantages in availability,
with shorter shipping routes than most competitors – with
exception to Canada and Mexico. Advantages in Portuguese
marble mining and production also hold advantages for
Portuguese SMEs, and the importance of customer service should
not be understated in accessing the US market.
Where the US marble slabs import market presents considerable

opportunities for Portuguese SMEs, the US granite slabs market
likely presents considerably fewer. This is not to say there are no
opportunities in exporting granite slabs to the US, rather that
opportunities are limited to higher grades of granite. With a steady
annual rate of decline of 9.1%, this US market peaked before 2011,
and explanatory factors ranged from consumer preference to
material substitution to quality control.
India, Brazil, and China control over 80% of the US granite slabs
market, and it was unable to be determined whether their market
value decline was driving down the overall market or vice versa. It
was indisputable, however, that when the US granite slabs market
declined these top exporting countries suffered serious losses,
which does not necessarily indicate that exporting countries that
are not at the top of the competitiveness table suffer equally as
detrimental losses. In fact, the US imported granite slabs market
appears highly open to dynamic and diverse competition, and
inclusion in NAFTA did not appear to make North American
exporting countries any more competitive than European, Latin
American, or Asia exporting countries. The number of competitors
is typically in the low to mid-thirties, which, the analysis argued,
will ease SMEs’ ability to identify and market competitive
advantages in the mid or high grade granite slabs markets.
Portugal has shown highly improved competitiveness in the

granite slabs market. Prior to 2014, exports were below significant
levels (0.0%), but export value and volume has been steadily

• 47
increasing. In essence, this is a frontier market for Portugal,
and from 2014 to 2015, US imports of Portuguese granite slabs
increased a further 43%, which was coincidentally the same rate
at which the overall US granite slabs import market increased
that same year (Comtrade 2016). Therefore, SMEs that are able to
navigate the challenges of a dynamic export market, identify their
competitive advantages for their specific grade of granite (likely
in the mid to high range) relative to their closest competitors
(Greece, Switzerland, and the UK), and build relationships in the
US based on consistent export improvement are likely to succeed
in export development in the US.
Finally, the smallest product category in terms of US market value

but perhaps the best opportunity for SMEs’ export development
is stone slabs. This US market has experienced almost unfettered
growth at 3.3% annually from 2010 to 2014, and from 2014 to 2015,
the US stone slabs market increased a further 10% (Comtrade
2016). Growth for top and lower tier exporting countries has
similarly been consistent, though competition is dynamic.
Mexico and India are the historically top exporting countries on
the US import market, but China has made constant progress
and became the second largest exporting country in 2014. Even
with these top countries growing their US market, more than
a third of the market is reserved for those outside the top five
exporting countries, and this openness and diversity – along with
consistent growth – makes the US stone slabs market an excellent
opportunity for SMEs.
Portugal has been growing at an impressive average annual rate

of 20.4%, and in 2014, Portugal became the third largest European
country exporting to the US from fifth. In the last year, Portuguese
exports to the US continued to increase by 8.7% (Comtrade 2016).
Italy, the top European exporter of stone slabs to the US, has a
negative average annual growth rate, and Spain – the second
largest European country exporting to the US in 2014 – has
overtaken Portugal with an astounding but likely unsustainable
growth rate of 53.1%. Examining Portugal’s closest competitors on
the US market showed that only Portugal, Brazil, and Spain have
positive growth rates and net gains from 2011 to 2014, as opposed
to net loss, like that experienced by France and Israel.
The findings suggested that Spain’s US market access and

growth strategy – if Portuguese SMEs have the resources –
would be beneficial to learn. Regardless, relationships, price
competitiveness, and product quality and service remain keys to
the US market. SMEs should market Portugal’s recent success in
the US stone slabs export market and highlight that Portugal was
almost a top ten competitor in 2014 in building their US network.
Portugal continues to increase its competitiveness as a US

exporting country within the building stone subsector and four
product categories assessed in this section. Across all markets,
Portugal has positive average annual growth rates, which is
not true for all competitors and some of Portugal’s closest
competitors in the US. Therefore, all markets are recommended
for SMEs’ export development, though some markets, such as

granite slabs, pose greater challenges and product grades shape
competitiveness.
Having analyzed the internal, US import market competition,

the report now narrows its focus on the recommendations by
examining SMEs external competition, globally and within Europe,
within these subsectors. Combining US export development
strategies with development and / or growth in other foreign
market allows SMEs to compound successes experienced in
varied markets while improving overall competitiveness in the
ornamental rocks industry – the goals of Next Challenge USA and
Compete 2020. The next section is organized similarly, with an
introduction, analysis of the top global and European competitors,
and examination of Portugal’s top subsector exports.

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Section 3:
External Competition
3.1 Introduction
The US market is the largest single-country import destination for

global goods and services, and as such, it is highly competitive.
For Portuguese SMEs to develop long-term, sustainable export
development and growth strategies, a comprehensive picture of
market competition is essential. Competition and demand are the
cornerstones of export strategy, which makes knowledge of external
competition fundamental. This section aims to enhance Portuguese
SMEs’ understanding of competition in the US market is through a
snapshot of external market competition for building stone products.
Portuguese SMEs face exorbitant competition globally, and the

analyses from Section 2 revealed that the top US competitors
are China, Italy, Turkey, India, and Canada. Some of Portugal’s top
competitors include France, Egypt, Germany, Greece, Israel, and
Other Asia. Because they are both concentrated in European and
distributed throughout the world, Section 3 will assess Portuguese
competitiveness in global and European contexts. The objective
of the report is to help Portuguese SMEs develop sustainable
export strategies by recovering pre-2008 export value and volume.
This section discusses the countries that compete in the global
ornamental rocks industry for access and dominance of the
US market. First, a frequency analysis identifies the top global,
European, and Portugal’s most significant building stone export
competitors. A close-up of this distribution is examined by looking
at each product category covered in the report, first globally and
then within Europe.
3.2 Top Sector Competitors
This section analyzes the largest global and European ornamental

rocks exporters within the product categories examined in this
report – stone mosaic tiles and marble, granite, and stone slabs.
It examines the general market and state of global ornamental
rocks competition and isolates European competitors to give
SMEs a better idea of how to improve competitiveness globally
and within the common (European) market in these four product
categories. Global competitors are analyzed first and then European
competitors follow; to accommodate for this division, 2014
global market values are given for all competitors. This allows for
comparison across exporting countries.

• 51
Through a frequency analysis, these six exporters represent the
strongest competitors on the global market from 2011 to 2014 in the
four product categories, with all European competitors removed:
1. China ($2.65B)
2. India ($1.31B)
3. Turkey ($1.22B)
4. Egypt ($523M)
5. Brazil ($311M)
6. USA ($117.35M).44
For comparative purposes, Portugal’s total 2014 global building

stone product category exports were $246.8M. It is of little surprise
that China, the world’s second largest economy, is the top global
building stone exporting country. With a wealth of natural resources
and prolific workforce, China commonly exports building stone
products to the United States, the world’s largest single-nation
economy and largest export destination for these products. China,
the exporter with the highest value on the above list, was a top
competitor in exports in two product categories, stone mosaic tiles
and granite tiles. It was the second largest exporter in the other
two categories, marble slabs and stone slabs, signifying China’s
overall durability in the building stone market. India was highly
competitive mostly in granite slabs, where it was the second largest
exporting country from 2011 to 2014 behind China. Similarly, Turkey
was a consistent top competitor in the marble slabs.
The high share of Asian exporting countries on the list is not only
indicative of the analysis in Section 3.3, but it also is linked to
typically low production costs in Asian economies. Comparatively
lower production and labor costs – particularly compared to
European and North American competitors – supports these top
exporting countries’ overall competitiveness. China, India, Turkey,
and Egypt, an African nation, have earned their positions as top
global building stone exporters through their extensive natural
resources, export competitiveness, and export volumes to diverse
global markets.
Shifting to the largest European global ornamental rocks exporting

countries, the report finds that across the four product categories
from 2011 to 2014 the top competitors were:
1. Italy ($1.72B)
2. Spain ($424M)
3. Greece ($318M)
4. Portugal ($246.8M)
5. Germany ($113.38M).
44 See Appendix [__] in Volume Two for the complete listings of both non-European and
European top exporters in the global market.

Italy remained the top exporting European country in each
product category. Spain – with similar frequencies to Portugal
– was a top five European exporting country in each of the four
product categories. For comparison, Portugal was a top producing
European country within each of the product categories, outside of
stone slabs, in 2011 and 2012. If European competitors were to be
integrated into the global competitors’ rank (in these four product
categories), a different picture emerges.
1. China ($2.65B)
2. Italy ($1.72B)
3. India ($1.31B)
4. Turkey ($1.22B)
5. Egypt ($523M)
6. Spain ($424M)
7. Greece ($318M)
8. Brazil ($311M)
9. Portugal ($246.8M)
10. USA ($117.35M)
11. Germany ($113.38M).
Portugal’s global export volume is over twice the value of European

competitor, Germany, and global competitor, the US. Examining
Portugal’s global building stone subsector competitiveness, it was a
consistent top global competitor (with Europe isolated). At the overall
building stone subsector level, Portugal remained the third largest
European exporting country from 2011 to 2014, behind Italy and
Spain. In stone mosaic tiles, Portugal was the third largest European
producer from 2012 to 2014, following Italy and France. Portugal was
also consistently the fourth largest European exporter across all four
years in marble slabs. In the frequency analysis, Portugal was a top
European competitor with the same or similar number of times as
Italy and Spain. The next section examines top global and European
exporters’ performance in the building stone subsector and four
related product categories to better understand the interacting
processes and events that shape external export competition.
3.3 Global Competitors
Detailing the top five global competitors within each product

category provides insight about market dynamics that influence
global export competition, which, in turn, shapes internal US
competition. The US is often a top exporter within some of these
subsectors on the global market. This is referred to as a dialectical,
where several concurrent processes or events influence outcomes
that produce differing effects for competitors. For example,
commodity prices, trade policy, import / export quotas, and
countries’ trade surpluses / deficits, banned products, embargos,
and anti-dumping and countervailing duties for one exporter has
an impact on markets all over the world. For example, the US’
trade deficit with China is an influencing factor that shapes global
interactions that influence competition. Before this analysis begins,

• 53
it is important to reiterate that European competitors are analyzed
separately under Section 3.4. The report argues that is essential that
SMEs understand the complex formulas that shape US, global, and
European competition.
3.3a Building Stone Sector

From 2011 to 2014, the global building stone market grew at an
average annual rate of 4.5%, reaching $11.9B in 2014. Asia holds 62%
of the global market, and these exporting countries experienced the
majority of the market growth during these four years. The top five
non-European global exporters of building stone in 2014 were China
(market share: 37%, market value: $4.43B), Turkey (market share:
9%, market value: $1.07B), India (market share: 8.5%, market value:
$1.01B), Brazil (market share: 7.6%, market value: $904M), and Egypt
(market share: 1.6%, market value: $196M).
In 2014, Portugal was the eighth largest global building stone

exporting country and controlled 1.6% of the total market share
of building stone, holding $190M in market value – narrowly
outcompeted by Egypt. During the four-year period, Portugal
remained a top exporting country, experiencing only a brief decline in
2012 when its market share reached 1.5%. Comparing Portugal’s global
competitiveness to its US competitiveness, in 2014, Portugal exported
$18.2M to the US building stone market, a 0.7% market share.
It is interesting to compare Portugal’s global building stone exports

to its US market. For example, Mexico and Canada outcompete
Portugal within the US market; their exports to the US are likely
supported by their inclusion in NAFTA and geographic proximity
to the US. On the global market, Portugal outcompetes both
countries by a margin that ranges between $70M and $100M per
year. Conversely, Egypt outcompetes Portugal on the global market,
albeit by a slim margin, while Portugal outcompetes Egypt in the
US market for building stones.

In 2014, the global market for stone mosaic tiles was $307.9M. The
global market value grew at an average rate of 4.3% per year from
2011 to 2014, with a minor decline of $2M in 2014. Asia held a slight
majority at 51%; Europe held 31%, and the next largest share was
North America (16%). The top five non-European global exporters of
stone mosaic tiles in 2014 were China (market share: 25%, market
value: $78M), Canada (market share: 12%, market value: $35.8M),
Turkey (market share: 8.4%, market value: $25.7M), India (market
share: 4.6%, market value: $14.3M), and the US (market share: 3.3%,
market value: $10.1M).
China – the largest global competitor in this product category – has

maintained its stronghold on the global market, and Canada – the
second largest exporter – had a considerably lower growth rate
(1.5%) compared to other countries. India’s global market value
grew by five times between 2011 to 2014. Market shares in the stone
mosaic marketplace are relatively evenly distributed; there are no
notable continental or country majorities. The two largest global

exporters – China and Canada – held an average of 35.5% of the total
market over the four-year period.
In 2014, Portugal held 3.4% of the global stone mosaic tiles market,
a $10.3M market value; however, its competitiveness in the global
market is declining at an average annual rate of 1.6%. Despite
this, Portugal remains more competitive on the global market,
compared to the US where it has an average annual growth rate of
24.6%. Portugal often outcompetes countries in the US market that
it is less competitive against on the global stage, such as France.
There are also some countries, such as Mexico and Japan, that enjoy
a large share of the US stone mosaic tiles market and a smaller
share of the global market than Portugal. Mexico has the benefits of
NAFTA and geographic proximity on the US market, and its lack of
competitiveness on the global market demonstrates how dialectical
factors influence trade competitiveness. If SMEs are able to leverage
and apply their competitive advantages over Mexico in the global
market to the US market, this may prove an effective US market
entry strategy.
3.3c Marble Slabs

The total 2014 global marble slabs market value was $1.56B, and it
is the largest global market in terms of value of the four product
categories. The market is so strong that it is larger than the global
granite and stone slabs markets combined. The global marble slabs
market grew at an average annual growth rate of 5% between 2011
and 2014. The market expanded by over 10% each year from 2011 to
2013, but stagnant growth from 2013 to 2014 reduced the average
annual growth rate to 5%. Asia controls the majority of market but
only slightly with an average 53.7% market share. Europe controls
33% and Africa 10%.
The top five non-European global marble slabs exporters in 2014

were Turkey (market share: 19%, market value: $291.4M), China
(market share: 16%, market value: $242), Egypt (market share: 9.4%,
market value: $147.8M), Oman (market share: 9.4%, market value:
$145.9M), and India (market share: 2.4%, market value: $38.1M). In
the global market slabs market, Turkey and China are becoming
increasingly competitive, growing at average annual rates of 7%
and 8.2% respectively, and even more considerable Oman and
Egypt both grew at rates of over 20%. The top four non-European
exporting countries (Turkey, China, Egypt, and the Oman) control
nearly 50% of the global marble slabs market.
In 2014, Portugal controlled 1.7% of the global marble slabs

market for a market value of $26.7M – not too far behind India’s
market value. Like stone mosaic tiles, Portugal controlled a larger
global market share than the US (0.4%) in 2014. Also similar to
stone mosaic tiles, Portugal outcompetes certain countries in the
US market, while being outcompeted in the global market. For
example, Portugal outcompetes Oman and Palestine in US but
not globally, and to do some degree, this is likely a product of
geopolitics than competitiveness.

• 55
Conversely, Brazil exports nearly nine times more marble slabs
to the US then Portugal, while Portugal controls nearly six times
the global market compared Brazil. The US has neither an FTA or
BIT with Brazil, and therefore, the most likely reasons for Brazil
outcompeting Portugal on the US market are price competitiveness
and consumer preference. Alternatively, Portugal likely
outcompetes Brazil on the global market because of Portugal’s
access to the common (European) market and inclusion in the EU’s
many FTAs around the world.
The same can be said of Portugal’s competitiveness against

Indonesia on the global market and Indonesia outcompeting Brazil
on the US market. In 2014, Portugal was ranked 10th; Indonesia
was 19th and Brazil 23rd. On the US market in 2014, Portugal was
ranked 17th, and Indonesia and Brazil were ranked 14th and 8th
respectively. This reinforces the importance for SMEs to understand
dialectical factors that shape their trade competitiveness.
3.3d Granite Slabs

The 2014 granite slabs market totaled $990M, and the global
market grew at the same average annual growth rates as marble
slabs – 5%. Unlike marble slabs, there was no year where the global
granite slabs market did not grow. Unlike the US market, which
declined every year except 2015. The top five non-European global
exporters of granite slabs in 2014 were China (market share: 43%,
market value: $421.3M), India (market share: 30%, market value:
$299M), Brazil (market share: 5.2%, market value: $51.1M), Vietnam
(market share: 1.1%, market value: $10.4M), and Turkey (market share:
0.67%, market value: $6.61M). Asian countries occupied 78% of
the global granite slabs market; the top five Asian exporting alone
controlled 73.8%, which is unlike any other product category.
Portugal remained a top global granite slabs exporting country

through the four-year period – ranked 6th globally in 2014. In 2014,
it controlled 1.3% of the global market for a total value of $12.7M.
Portugal only exported $30K or 0.1% of granite slabs to the US in the
same year. Section 3.3 is uncovered that while Portugal is a global
export leader in these building stone product categories, it has
been unable to transfer its global competitiveness to the US market.
Similar to stone mosaic tiles, Portugal outcompetes Mexico on

the global market. In 2014, Mexico exported $380K of granite slabs
globally. In the US market, Mexico outcompeted Portugal by a
factor of ten, exporting $200K compared to Portugal’s $20k in 2014.
South Africa also outcompeted Portugal in the US granite slabs
market, although Portugal exported almost three times South
Africa on the global market.
3.3e Stone Slabs

The second smallest of the four product categories, the global stone
slabs market was valued at $457M in 2014. The global market’s
average annual growth rate was over 6%, and growth from 2013 to
2014 was particularly strong, increasing by over 20%. The top five
non-European global exporters of stone slabs in 2014 were Palestine

(market share: 27%, market value: $124M), China (market share: 16%,
market value: $71.7M), Jordan (market share: 9.4%, market value:
$43.7M), India (market share: 4.2%%, market value: $19.2M), and
Brazil (market share: 3.8%, market value: $17.5M).
In 2014, Portugal held 1.4% share and $6.5M value on the global stone
slabs market. Its market share peaked at 1.9% in 2013. Unlike other
product categories, Portugal is more competitive on the US stone
slabs market when compared to the global market, demonstrating
the unpredictable nature of global processes and events that
influence dialectical trade relationships. In 2014, Portugal hold 2.1%
of US stone slabs market. Again, to the contrary, Portugal often
outcompetes countries in the US market that it is less competitive
against on the global market, such as Jordan and Palestine. However,
like Oman, Portugal’s competitiveness compared to Jordan and
Palestine in the US market is likely more geopolitical.
Palestine controls over a quarter of the total global market value,

and interestingly, Israel is the largest global importer of stone
slabs. In the US, Palestine exported a mere $205K of stone slabs
in 2014, and the US imported more stone slabs from Israel ($264K)
than Palestine in a total market of $17.4M in 2014. There are other
countries, such as Mexico, Vietnam, and Turkey, that enjoy a large
share of the US stone slabs market but a smaller share of the global
market when compared to Portugal. This demonstrates how a
variety of factors impact competitiveness in the global and US
building stone markets.
3.4 European Competitors
This section focuses exclusively on Portugal’s European competitors’

performance within the global market. Examining Portugal’s
European competitors allows the report to better assess how
Portugal can improve competition within the common market.
Again, there are dialectical factors at work in this assessment that
impact Portugal’s competitiveness within the US market. For
example, Portugal’s post-2008 recovery aid from the EU and IMF
influences its competitiveness, and assistance is ending (European
Commission 2016).
Portuguese businesses will be expected to drive export growth with

less input from Brussels, the IMF, and the Portuguese government,
and the effect of this process has yet to be determined. While
this may put Portugal at a temporary disadvantage with some
European competitors, such as Italy, France, and the Netherlands,
Portugal continues to have a plethora of advantages over other
European competitors. Greece is still in crisis; Moldova requires
enhanced export infrastructure, and Estonia is comparatively further
from France than Portugal. Dialectical factors remain in play, but
this section provides intimate detail that further illuminates export
development and growth opportunities for Portuguese SMEs.
3.4a Building Stone

In 2014, the European share of the total building stone market

• 57
($11.9B) was $3.07B or 26%. Europe’s market share increased in
2011 and 2012 – peaking at $3.13B – but decreased slightly in 2013.
While the global building stone market expanded at an average
4.6% annual rate, the European market grew at a reduced rate of
1.70%. The top five European building stone exporting countries in
2014 were Italy (European market share: 55.2%, global market value:
$1.69B), Spain (European market share: 15.5%, global market value:
$475M), Portugal (European market share: 6.15%, global market
value: $189M), Greece (European market share: 5.37%, global market
value: $165M), and Germany (European market share: 4.07%, global
market value: $125M).
From year to year, little change is observed in these top European

exporting countries’ competitiveness. Italy continued and continues
to export the majority of Europe’s building stone, accounting for
over 15% of Italy’s total global exports in 2014. However, Comtrade
(2016) indicates a 9.8% decrease in Italy’s global building stone
exports in 2015, which could indicate decreased competitiveness or
increased demand for lower grades of building stone. SMEs could
potentially benefit from declining in Italian building stone exports
and pursue differentiated markets through quality products, quick
availability, and competitive pricing.
Portugal has one of the most positive average annual growth rates
on the global building stone market compared to its European
competitors. As highlighted in the first paragraph of this section, the
European market grew at a reduced rate 1.7%; however, Portugal
was one of the few European competitors keeping pace with the
market with an average annual growth rate of 1.5%. Compare this
to Germany, for example – the fifth largest European building stone
exporter – which grew at an average annual rate of 0.5%.
The report suggests that Portugal can adapt its global export
competitiveness for the US market to outcompete key competitors,
such as Greece. Portugal exported building stone in values that were
14% greater than Greece on the global market in 2014. Whereas,
Greece outcompeted Portugal in the US market by 10% greater values
in the same year. Transferring the competitive advantages Portugal
possesses over Greece in the global market to the US is key for SMEs
US market access and continued Portuguese competitiveness.

In 2014, the European share of the global stone mosaic tiles market
($308M) was $95.7M or 31%. Europe’s market share peaked at 45.8%
($94.4M) in 2011 and bottomed out in 2013 at 30.3% ($93.7M). Despite
losing over 15% of its global market share, the market value differed
by only $700K because the global market expanded by over 22% in
2013. Asian countries like India, Turkey, and China were the primary
catalysts for the market value increase. The top five European stone
mosaic tiles exporting countries in 2014 were Italy (European market
share: 27.9%, global market value: $26.7M), France (European market
share: 16.6%, global market value: $15.9M), Spain (European market
share: 11.9%, global market value: $11.4M), Portugal (European market
share: 10.8%, global market value: $10.3M), and the Czech Republic
(European market share: 9.7%, global market value: $9.3M).

Portugal is a top global competitor in the stone mosaic tiles despite
shares and value fluctuations over the four years, and interestingly,
Portuguese competitiveness changes reflected global stone mosaic
tile market shifts. For example, the global market declined from 2011 to
2012 and again from 2013 to 2014; Portugal’s market likewise declined.
When the market rebounded from 2012 to 2013, Portugal’s market
share also increased. Its average annual rate of decline was 6.2%.
Unlike Portugal, Spain’s competitiveness increased over the four-

year period, growing at a rate of 8.03% per year. Conversely, France
– another of Portugal’s competitors – saw an average annual growth
rate of 0.23%. SMEs could use France’s stagnant growth rate as
an opportunity to reverse its negative export competitiveness in a
certain market. In 2014, France controlled 15.9% of Europe’s global
market, compared to Portugal’s 10.3%; however, Comtrade (2016)
indicates that in 2015, French global stone mosaic tiles exports
declined 5.57% in value, but France exported 7.5% more in volume.
This is most likely a result of French suppliers shipping lower quality
products – perhaps of less thickness, smaller dimensions, or less
decorative. With this knowledge, Portuguese SMEs could aim to
increase their global stone mosaic tile exports by capitalizing on
more upmarket tile exports.
3.4c Marble Slabs

In 2014, Europe’s share of the global marble slabs market ($1.56B)
was $521M or 33%, and this share declined slightly from its peak
of 39% in 2011. Although like stone mosaic tiles, there was little
value change. The global market rose by an average annual rate of
5%, while Europe’s share of the global market increased by 0.93%.
The top five European exporters of marble slabs in 2014 were Italy
(European market share: 58.6%, global market value: $305.3M),
Greece (European market share: 17.6%, global market value: $91.9M),
Spain (European market share: 12.0%, global market value: $62.7M),
Portugal (European market share: 5.1%, global market value:
$26.7M), and Germany (European market share: 1.0%, global market
value: $5.2M).
Italy is the dominant European marble slabs exporting country, and

in 2014, it was also the top global marble slabs exporting country,
controlling 20% of the global market and 58.6% of the European
market. Over the four-year period, however, Italy grew at average
annual growth rate of 0.52%. Italian marble may be the highest traded
out of any other country, but markets appear open to substitutes,
which can provide SMEs with opportunities for export development.
Unlike Italy, Greece has grown at an average annual rate of 6.2%,

and considering Italy’s almost neutral growth rate, Greek marble
slabs may be competitive as an Italian substitute at a reduced
price. SMEs should aim to identify the markets where Greek
marble is growing and use market intelligence to discern Greek’s
pricing for various grades, such as the US where Greece is a top ten
exporting country. This additional intelligence would facilitate SMEs
establishing a competitive advantage over other producers in the
US and on other global and European markets.

• 59
3.4d Granite Slabs
In 2014, Europe’s share of the global granite slabs market ($990M)
was $146M or 14.8%, which had decreased steadily from its 2011
peak of $196M or 21.3%. The top five 2014 European exporting
countries were Italy (European market share: 47.6%, global market
value: $69.5M), Spain (European market share: 19.9%, global market
value: $29M), Portugal (European market share: 8.7%, global market
value: $12.7M), Germany (European market share: 4.0%, global
market value: $5.9M), and the Netherlands (European market share:
2.7%, global market value: $4.0M).
Italy and Spain controlled the majority of the European share of the
global market from 2011 to 2014, but there was some variance in
competition. Slovakia was the third largest granite slabs European
exporting country in 2011 and 2012 – larger than Portugal or
Germany. However, from 2013 on, Slovakia’s global exports declined
significantly, falling to the 51st position in 2014. Slovakia’s decline
is evidence of how reduced production – a 3.7% year-on-year
production decline – can impact competitiveness (Jurečko 2015).
Portugal’s was consistently a top exporting country in each of the

four years with an average annual growth rate was 4.8%; the global
market grew at an average annual rate of 5%, and Portugal’s 4.8%
growth rate indicates that exporters kept pace with the overall
market. Portugal occupied 1.3% of the global granite slabs market
but only 0.1% of the US market in 2014. Similar to other product
categories, the UK, Switzerland, and South Africa each export more
granite slabs to the US compared to Portugal. However, Portugal
outcompetes these three countries combined on the global market.
There are a variety of factors that make certain countries more
competitive in the US than on the global market, including
production costs and product marketing. Section 5 will explore
further if Portugal is exporting the US granite product categories
that are high in demand. The crux of Section 3 is that SMEs can
apply successes from the global and European markets to the US
market and vice versa in export development.
3.4e Stone Slabs

In 2014, the European share of the stone slabs market was $107M
or 23.4%, and Europe’s share of the global stone slabs market has
steadily recovered from a brief period of decline – $8M value loss
– in 2012. Prior to 2014, Europe’s share was the greatest in 2011 at
$99.6M, and the concentrated recovery has seen Europe’s global
stone slabs exports increase to $107M. The global market grew at an
average annual rate of 6%; Europe’s global stone slabs exports grew
at 1.8% per year.
The top five European exporters of stone slabs were Italy (European
market share: 29.7%, global market value: $31.8M), Germany (European
market share: 10.2%, global market value: $10.9M), Spain (European
market share: 8.8%, global market value: $9.4M), Portugal (European
market share: 6.1%, global market value: $6.5M), and Belgium-
Luxemburg (European market share: 5.2%, global market value: $5.6M).
The competitiveness of several of these top European exporters of
stone slabs mirrored Europe’s overall market performance – peaking

in 2011 and slowly rebounding towards 2014. For example, Italy’s
2011 global stone slabs exports were $31.9M, and by 2014, its market
had almost fully recovered at $31.8M for an average annual rate of
decline of 0.1%. Other European exporting countries, such as Belgium-
Luxemburg, experienced greater rates of decline (6.3%) and market
values have not recovered as strongly as Italy.
Portugal continued to be a leading European stone slabs exporting

country, and like the other top European competitors, its market
fluctuated from 2011 to 2014 with an average annual growth rate
of 1.8%. Portugal’s growth rate is not only stronger than other
top European stone slabs exporters, but it is identical to Europe’s
growth rate on the global market. Considering Italy and Belgium-
Luxemburg’s neutral to negative growth rates, Portuguese stone slabs
exports were part of the key drivers of European stone slabs export
competitiveness from 2011 to 2014, along with Germany and Spain.
3.5 Conclusion
A large amount of information – both numerically and conceptually

– has been presented in this section on worldwide competition. The
report views competition and export development as part of the
dialectical equation that influences ornamental rocks trade – two
factors in a constantly changing environment. Section 3.2 used a
frequency analysis to uncover the top exporters within this industry,
from China to the USA. With limited exception, China and Italy are
the global building stone export leaders. In some markets Asian
countries hold more of a majority, and others less so.
Europe traditionally holds the second largest share of the global

market, although its competitiveness has declined not only in
relation to export value or volume but also in terms of keeping pace
with the global market and Asian competitiveness. Rather than
find this discouraging, the report sees this as a key opportunity for
SMEs to collaborate within the industry on approaching Portuguese
and Brussels decision-makings about better supporting Europe’s
ornamental rocks export development and industry growth. With
Europe’s competitiveness in decline across global building stone
markets, SMEs are encouraged to work with Portuguese and EU
officials to seek trade financing and export development assistance
to stall this decline in global (and US) market competitiveness, less
GDPs be considerably affected.
In the global market, Portugal was a top ten exporter in:
»» Stone mosaic tiles: 2014-2011

»» Marble slabs: 2014, 2013, 2011
»» Granite slabs: 2014-2011.

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Within Europe, Portugal was a top five exporter in:
»» Stone mosaic tiles: 2014-2011

»» Marble slabs: 2014-2011
»» Granite slabs: 2014-2011
»» Stone slabs: 2014, 2013.
However, in most product categories except granite slabs,

Portuguese building stone global exports and competitiveness
declined since 2011. Therefore, there are two issues that concern
SMEs regarding Portugal’s external market competition (outside the
US). The first is stalling the rates of building stone export decline,
which is a much larger issue, and the second is transferring the
overall success – despite decline – of Portugal’s global building stone
exports to the US market.
On the issue of the second concern, which reflects the focus of

this report, the section’s analysis found Portugal’s global export
performance offered two intriguing findings. The first is that in
almost every product category – with some exception to stone slabs
– Portugal has historically been more competitive on the global
market than the US market. In the US, Portugal is outcompeted by
countries where on the global market Portugal exports significantly
higher volumes and values than these competitors that are stronger
in the US. Section 3 highlighted that dialectical factors, ranging
from geopolitical security concerns to FTAs and BITs, shape US
competition. Whereas, on the global market, Portugal not only
benefits from being part of the common (European) market –
where it gains access to 28 tariff-free markets – but it is also party to
the European Union’s many FTAs with other countries in Asia, Africa,
and Latin America. The second intriguing finding is that Portugal
also outcompetes some countries that are major exporters on the
global market, such as Palestine and Egypt, in the US market.
However, the overall finding from this section’s analysis is that

Portugal is much more competitive on the global and European
market than in the US. Section 2.2 found that Portugal was a top US
exporting country in building stone subsector three times (2011-2013),
but not in any of the product categories explored in Section 2. This is
because Portugal’s export competitiveness is currently concentrated
in other product categories that are explored in Section 5.2.
The objective of this report and the Next Challenge USA project is to
not only transfer the global success Portugal has had in the building
stone product categories assessed in this section to the US market
but also transpose the success Portugal has had in other product
categories, such as worked granite, marble, and stone, on the US
market to these slabs product categories. Considering Portugal’s
global prowess in these slabs markets, the report finds that with
targeted, sustainable short and long-term strategies there is
evidence that Portugal can be a top US exporting country of stone
mosaic tiles and granite, marble, and stone slabs. Additionally, the
report argues that SMEs are the critical elements in achieving this
goal, as the primary drivers of Portuguese GDP (AICEP 2011).

The overall finding from Section 3 is that Portugal is competitive in
global and European markets, some more than others, and this can
help SMEs contribute to Portugal’s continued improvements in US,
European, and global competitiveness – necessary for the scope of
post-2008 economic recovery discussed in Section 1. Portugal faces
challenges in developing and enhancing its export development
and growth strategies. This report focused on general and specific
ways that Portuguese SMEs can work toward short and long-term
goals that will enable them to export sustainably. The report turns
to setting out, in broad detail, legal and regulatory compliance
issues necessary to gain US market access, with the hope of
assisting Portuguese SMEs in this complex endeavor with many
moving parts.

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Section 4:
Legal Regulations and
Compliance
4.1 Introduction
This section focuses on legal, regulatory, and compliance issues

SMEs will face when exporting to the US. Portuguese SMEs are
encouraged to familiarize themselves with US import regulations
and compliance beginning with the 200-page document,
“Importing into the United States: A Guide for Commercial
Importers” (“importing guide” hereafter), from the US Customs and
Border Protection Agency (CBP), a division of the US Department
of Homeland Security. The document includes advice on expedited
merchandise clearance, full scope documentation, foreign trade
zones, bonded warehouses, packing, invoicing, and country of origin
marking. As a resource for guidance, this section of our report and
the CBP importing guide are intended to provide an overview and
do not contain the sort of verification and detail that parties like
licensed brokers or customs attorneys would be legally authorized
to provide.
For more detailed compliance and regulatory information,

the report encourages SMEs to contact a US CBP attaché,
representative, or specialist at one of the European foreign offices.
They will most likely also be able to assist exporters with the
transition from the Automated Commercial Environment (ACE) –
how US imports and exports are currently processed – to the Single
Window, a paperless system designed to improve efficiency and
ease in compliance with US import regulations and compliance.
The transition is expected to be completed by December 2016.
4.2 Packaging and Labeling
Clear shipping packaging and labelling is the best way to expedite

the process of importing to the US. All products imported into
the US must conform to Country of Origin Marking (19 CFR 134)
regulations, requiring that every product of foreign origin or its
container imported into the US be marked clearly and permanently
with the English name of the product’s country of origin and
provide detailed information of the container’s contents and further
relevant information, such as the producer and importer’s contact
information and product certification or testing credentials.
The CBP advises that “palletization” – transporting cargo in pallets

or other consolidated units – is another effective technique that
can aid the import inspection process once cargo has arrived
at a US port. The CBP also recommends that itemized labelling
and documentation of materials helps the exporter receive

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the correct tariffs applied to each product.45 If different items
packaged collectively are not clearly labelled, the highest tariff for
all items packaged together will be applied; having interviewed
trade associations, importers, and distributors the report fully
recommends care and compliance with US labeling and packaging
requirements. Upon reaching the first port of entry, items can be
sampled and verified, and evidence for grading is also evaluated in
certain cases.
There are a handful of product-specific building stone packaging

and labelling requirements. For example, granite slabs are required
to bear proper labels indicating geological nature of the stone.
A laboratory analysis is used to: “identify the geological nature of
the stone and physical examination to determine the form of the
merchandise”, and this analysis is how the Harmonized (Tariff)
System (HS) codes are designated (CBP 2006: 7). The designation of
the HS codes are the source for all tariff application. For granite and
marble slabs, the following must be noted on the packaging:
1. “What is the geological nature of the stone? (i.e., based on

geological definitions, is it granite or is it another stone such
as basalt, gabbro, diorite, diabase, syenite or gneiss?) Invoicing
stone simply as “granite” is improper unless the item is
geological granite.
2. “What is the brand name and / or style number of the stone?
3. “Is the product an article, crude or roughly trimmed stone,
crushed or ground stone, an unworked slabs, a worked slabs,
etc.? [Indicate the exact form of the imported stone.]
4. “Has the stone been simply cut from the quarry block or has it
been further worked? Has it been precision cut, honed, edge
worked, beveled, bossed, dressed with a tool, furrowed, sand
dressed, planed, ground, polished, chamfered, molded, turned,
ornamented, carved, etc.? [Indicate the precise extent to which
the stone has been cut or worked. All operations applied to either
the face or the edges of the stone should be described exactly.]
5. “What is the area and thickness of the product” (CBP 2006: 17).
Integral for SMEs is the understanding of the differentiation of

Harmonized Tariff System (HS) Chapter 68 (Articles of Stone, Plaster,
Cement, Asbestos, Mica or Similar Materials: Ceramic Products;
Glass and Glassware – for building stone) and Chapter 25 (Mineral
Products – for other ornamental rocks) classifications. This report
has assessed building stone classified under Chapter 68 of the
HS. Closely related is Chapter 25 building stone, which is roughly
trimmed or sawn rectangular blocks and slabs. For example, granite
slabs considered in the product category 680223 will have a flat or
even surface, produced after sanding or smoothing. This product
category is differentiated by granite slabs bearing discernible marks
of cutting or sawing, product category 251612. This emphasis on
specificity remains true across marble slabs, as well.
45 See Section 4.3 for the tariffs that apply to the product categories assessed in this report.

When building stone from Chapter 25 is manufactured, worked, or
polished, and thus reclassified under Chapter 68: “the country of
origin will change when heading 2515 or 2516 merchandise from
one country is converted into heading 6802 merchandise in a
second country” (CBP 1999: 15). NAFTA contracting parties receive
reduced tariff rates – that impact competitiveness – if products
switch between Chapter 25 and Chapter 68. For example, if crude
granite is cut in Brazil (251611) and shipped Canada where it is
processed into worked granite slabs (680223), the product is eligible
for reduced NAFTA rates. However, any intra-chapter changes – that
is any product that undergoes a classification change within either
Chapter 25 or Chapter 68 – are not eligible for reduced NAFTA rates.
For example, if Brazilian granite slabs (680223) are exported to
Canada where they are processed into worked granite (680293), the
product is not eligible for reduced NAFTA rates.
For Portuguese SMEs, shipping and transportation will be essential

to sustainably entering the US market. When preparing to ship
ornamental rocks, care should be given to securely fastening
the materials within the containers to avoid any damage during
transport or using a trusted and specialized ornamental rocks
overseas shipping agency. Unnecessary chipping or cracking may
occur if products are not properly panelized and secured. SMEs
should look to consolidate shipments to maximize the volume
exported to the US. The NSI notes a “single cubic meter crate
by itself can be four times more expensive” (NSI 2011: 5) when
compared to a consolidated, maximized crate.
The Building Stone Institute notes in its recommendation to building

stone exporters that: “stress concentration due to improper handling
may interconnect micro or macro fractures of geological origin which
may be present in the stone slabs. Moisture and thermal cycles
may cause later distress and failure of such panels on the building
facade” (2002: 25). Further “when stone slabs are stacked, they should
be separated with two non-staining skids placed approximately
one-quarter of the way from each end of the slabs. Skids should be
placed directly above one another to prevent cracking or breakage”
(Building Stone Institute 2002: 25). Therefore, to ensure SMEs build
sustainable relationships with US suppliers, care in export packaging
is essential to product and customer service.
Once the product arrives in the US, SMEs should be selective in

their distribution partnerships, as further care should be taken on
the storage of stone slabs, especially unpolished slabs, which are
susceptible to staining and discoloration. By implementing a robust
transportation management plan, SMEs can: “reduce costs, increase
company reputation for on-time delivery, promote constructive
relationships with the supply chain, and mitigate environmental
impacts” (NSI 2011: 3). A properly calibrated and sized truck will ensure
the shipment is transported efficiently and reduce costs. “A shipper
may pay an extra 10% more for product transport when a trailer that is
too small or too large for the load is employed”. (NSI 2011: 5).

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4.3 Tariffs46
The report analyzes a vast range of subsector product categories

and aims to give tariff information where Portuguese SMEs are
most likely to encounter tariffs on their imports. This section focuses
specifically on tariffs for the product categories analyzed in Sections
2 and 3. The US has bilateral investment treaties (BITs) and / or free
trade agreements (FTAs) with a range of countries, and the general
rate of duty (tariff) does not apply to these countries. They receive
preferential or “special” duty rates.
Section 2 often made reference to how BITs and FTAs influence

competition, and Section 6.2a discusses how mega-regional FTAs,
like the Transatlantic Trade and Investment Partnership (TTIP), could
affect Portuguese SMEs’ ability to compete and supply import
demand for the US market. Additionally, there are “column 2” or
“statutory” tariff rates, which are reserved for countries where the US
has issued an embargo, such as Cuba or North Korea.
At present, the US has BITs with 13 European nations47 but no FTAs

with European nations. A recent investigation into the motivations
of US BITs demonstrated that the agreements provided more
political and geopolitical security benefits to the US than trade and
development assistance to the countries where the US invested
(Chilton 2016). While BITs may have less of an effect on exporting
countries’ access to the US market, the 41 African, Asia, Latin
American, and European countries party to US BITs pay reduced
or eliminated duty rates on imported products, which gives them
advantages over Portuguese SMEs.
FTAs, on the other hand, give 20 countries increased access and

enhance their competitiveness on the US market, and NAFTA
is undoubtedly the best example of the benefits of an FTA with
the US. In most industries, sectors, and subsectors, Section 3.3
demonstrated that Canada and Mexico are not remotely as
competitive on the global market as they are in the US; these
countries’ exports and GDPs have substantially benefited from
NAFTA. In this regard, the Trans-Pacific Partnership (TPP) – if
ratified by the US and the other eleven contracting parties – will
further increase Canada and Mexico’s global competitiveness.
Additionally, TPP will give nine other countries48 increased access
and enhance competitiveness for these countries in the US,
which – again, if ratified – could change the scope of the report’s
findings in Sections 2, 5, and 6. However, recent anti-free trade
political movements in the US, observed on both extremes of the
political spectrum, suggest that the TPP may face difficulty in
implementation.
46 The World Customs Organization applies updates to the HS every 5 years, and on January
1, 2017 around 230 tariff changes will go into effect, including changes to particular fish
products. SMEs are advised to consult the relevant HS codes for their products after this date.
47 Albania, Bulgaria, Croatia, the Czech Republic, Estonia, Georgia, Latvia, Lithuania,
Moldova, Poland (two BITs), Romania, Slovakia, and Ukraine.
48 Australia, Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam.

Portugal is party to no BITs or FTAs with the US, but TTIP could
drastically improve Portugal’s competitiveness and access to the US
market. TTIP’s progress has increasingly slowed, and a conclusion
prior to 2017 is now widely regarded as unlikely. For now, Portugal’s
comparative and competitive advantages are in import and
production costs, also discussed further in Section 6.2a. SMEs will
find that building the price (in part or in full) of tariffs into product
prices may be an effective strategy for US market access. SMEs may
also find this addition may make them less competitive and may
consider delaying this strategy for the first one to two years of US
export development. Once a market has been established, and
strategies are at a point of reassessment, adding in tariff costs to
product price can be revisited.
Beginning with stone mosaic tiles, SMEs will face a tariff of 4.8% on
gross weight. Marble slabs are split into two groups: travertine and
other. Travertine faces a 4.2% tariff per ton; the tariff for other is 1.9%
per ton. For granite slabs, the tariff is 3.7% per ton. Finally, stone
slabs, like marble slabs, are split into two groups. First, calcareous
stone, other than marble, travertine, or alabaster face a tariff of 4.9%
per ton. All other stone slabs face a tariff of 6.0% per ton.
Exporters should also recall from Section 4.2 that how products
are packaged and labeled affects how tariffs and applied. Certain
products are subject to US tax and / or user fees upon entry and
that tariffs differ from US port to port. Generally speaking, the
sea port with the lowest fees is Newark, New Jersey, while New
York state has some of the highest fees. For detailed information,
exporters are advised to contact a broker or import specialist at the
port through which products will arrive.
4.4 Distribution Structure and Channels
The US distribution structure or composition can generally be

divided into five categories:
»» Importers
»» Distributors / Wholesalers / Quarries
»» Retailers / e-commerce
»» Brokers / Dealers
»» “The trade”.
Beginning with importers, it is rare that a US building stone importer

is only an importer. As will be discussed on the paragraph on
distributors, wholesalers, and quarries, US suppliers often look to
diversify and expand their inventory with foreign building stone.
For example, Marble and Granite, Inc operates as an importer,
retailer, and wholesaler. This cross-functional distribution and supply
chain role allows US suppliers to grow various elements of their
business and insulate themselves from market downturns. Unlike
other industries, SMEs looking to export building stone are not at a
disadvantage if they do not have a US headquarters or import agent.

• 69
Most of the building stone importing is done by US-based
companies. There are some other business models that are used by
the Turkish companies, where they have a US import branch and
the Turkish company is the parent company. There’s a few – but
not a huge number of – overseas companies that have US bases
for importing. Some US importers may have a dozen locations
in the US. Locations are pretty much proportional to population
base; there’s a huge concentration in Dallas, Houston, Chicago, Los
Angeles but not a big population in, say, Wichita, Kansas.49
The next point-of-entry are distributors, wholesalers, and quarries.

There are the more traditional importer / distributors, such as
Venezia Stone Company and Stone Quarry Incorporated. The report
parties learned that US distributors, generally: “are probably some
of the largest US [building stone] businesses. They are turning huge
revenues, but they aren’t provided any value added service. They
take that revenue, reinvest it, and buy more rocks to distribute.”50
Many quarries have also turned into distributors in the US market
to both serve the trade more effectively and because they possess
the specialized equipment needed to effectively transport building
stone without damage.
The big quarry fabrication companies – Rocks of Ages, who is

Canadian now, and Coldspring, those are the big players. Most of
our distributors are working exclusively in or extremely dominated
by stone market; we don’t use the big distribution services that
aren’t highly specialized often. DalTile or Walker Zanger, they will
bring in material, huge containers full, for the countertop sector,
but they also import for construction, but that’s mostly on a
custom project-by-project basis.51
Another point-of-entry is through retailers and e-commerce. As

highlighted when discussing importers, almost all of the large
US chain retailers and several of the retailers with multiple US
locations act as an importer, distributor, and retailer; for example,
LuDe Inc and International Stone Quarries. Some retailers operate
blogs, like Marble of the World and Kitchen Expo, to drive traffic
to e-commerce sales, as traditional brick-and-mortar purchasing
is declining across the retail industry in general. These blogs often
have information and advice for Do-It-Yourself (DIY) consumers,
product and supplier reviews, and pricing information.
Increasingly, the US e-commerce and retail distribution model is

shifting to what is known as “dropshipping”, where the US suppliers
do not take stock of products sold online; rather, when a product is
purchased by a customer, the retailer purchases it through a third
party, such as an importer, distributor, or straight from the producer
/ manufacturer who sends the product directly to the customer
that purchased online (Chaturvedi Martich, Ruwadi, and Ulker 2013;
Youderian and Hayes 2016).
50 Ibid.
51 Ibid.

Dropshipping is expected to reduce the retailer and US supplier’s
role in the increasingly complex and demanding supply chain.
One such example of a building stone retailer that replies on
dropshipping is MS International Inc, which offers an expansive
inventory. Such a vast inventory is only possible through
dropshipping. Research suggests the true impact and prevalence
of dropshipping has yet to hit the US market in full force, but
within the next two to five years, this exception to the traditional
distribution and supply chain model could become the rule
(Chaturvedi et al 2013).
If SMEs elect to engage in the US market via dropshipping, they

should have a dedicated customer service representative who is an
almost-native English speaker with excellent US customer service
skills, as this representative will be wholly responsible for filling
orders, not the e-commerce retailer. It would also be advantageous
if this representative was located in the US to deal with any missing
or delayed shipments effectively.
The next point-of-entry is for brokers or dealers. Companies

who establish themselves as either brokers or dealers act as
intermediaries between quarries, foreign exporters, landscapers,
construction companies, or directly with consumers – all fringes of
the supply chain. Brokers are rather common as: “the entry process
itself can be quite complex”. (CBP 2004: 9). Typically, dealers or
brokers offer a wide variety of building stone products and work
on a fee or commission basis, which can offer SMEs critical market
entry support for a nominal investment. Examples of dealers in
building stone include Pyramid Granite and Rolling Rock Building
Stone Inc.
The final entry point is for “the trade otherwise known in the
industry as specifiers. This classification includes architects,
designers, contractors, fabricators, builders, corporate, and
hospitality services. Specifiers or “the trade” typically work on highly
specialized projects. For example, architects designing monuments,
museums, municipal or judicial buildings or engineers specifying
materials for a bridge require massive amounts of building stone,
and as Section 5.3 will further detail, architects are often the drivers
of US market trends. “Architecture is a fashion, and that largely
dictates the short-term market. It’s a fashion for the character of
building, and even if the decision is made to use stone, the stone
type and the finish is a fashion decision.”52 Specifiers operate
at the end of the supply chain, and source their building stone
through distributors or directly with quarries or foreign exporters.
Networking with this level of the trade offers SMEs a direct way into
the US market, as trades people often negotiate the import and
tariff process themselves, especially for highly desired materials.
In the case of building stones, the best avenue for US distribution

may be through wholesalers, retailers, or the trade. Resources
for locating potential US distribution partners include a website
called “SICCODE”, where exporters can locate US companies by

• 71
Standard Industrial Classification (SIC), North American Industrial
Classification System (NAICS) codes, or targeted internet searches,
such as “granite slabs distributors” or “marble distributors Florida”.
The challenge in this approach to distributors is that the companies
are often large. Industry experts have advised that large and
established wholesalers, distributors, and retailers acquire new
materials predominantly through existing contacts / networks or
“designer” agreements regarding projects’ customized needs that
change dynamically.
This is why relationships, networking, and trade associations, shows,

and publications are critical resources for Portuguese SMEs in
developing a sustainable export strategy for the US market – offered
in Section 5.3. The Natural Stone Council, which conducts in-house
stone grading and testing, is likely the most optimal resource for
SMEs looking to access the US market for reasons described by their
lead technical specialist.
On our website, there’s a document search feature, where a

keyword search will bring up documents from us and other
groups [on accessing and selling in the US market]. This calendar
year we’ve had over 17,000 downloads. Our international
membership is growing; it’s still minor part of us – about 10% – but
its growing. That’s an area that we are looking to cultivate – our
international members and benefits for them. 53
Even for distribution, the US market requires intimate knowledge

and deep connections that are fostered over time through face-
to-face contact. A Florida importer and retailer indicated that they
prefer this sort of relationship building to networking at trade
shows. “Most of the producers we deal with come to our store.
We do go to trade shows but we don’t like that as much.”54 There
are several ways to facilitate knowledge and foster relationships,
including a continued relationship with the report parties. A fully
updated website listing products and grading information is the
first step, and the challenge for many Portuguese SMEs will be to
present English versions of their websites. A US marble importer
and distributor that currently purchases Portuguese marbles said
that they: “also do a lot of shopping from images online, and so
it may be helpful as a note that those SMEs should have a well-
functioning website with visuals and product descriptions. We’re
actually already looking at Portuguese marbles for the future.”55
Before concluding this discussion on US distribution structure and

channels, the report has discovered that the biggest distribution
networks in the US are regional and are generally located in
New England, the southeast, Texas plains, and west coast. One
retailer interviewed said that they: “we get our product through
vendors throughout the country, mostly out of the Boston area…,
53 Ibid.

and they import from around the world.”56 This concentration of
the supply chain – as further discussed in Section 5.2 – is related
to US domestic production of building stone. For example, New
Hampshire is called the “Granite State” due to its large deposits;
North Carolina, Texas, Minnesota, California, and Vermont also have
considerable deposits of marble, granite, and stone.
These quarries operate as distributors and wholesalers in the

supply chain. However, SMEs should be aware that while there
is a considerable domestic ornamental rocks industry: “the
overwhelming majority of stone products in the US are foreign.
Domestic production is much smaller. There are companies that
are quarrying only, and sometimes their products are exported and
come back into the US, going to Italy or Spain to be fabricated.”57
4.5 Conclusion
To continue to clarify the US market picture for SMEs, the next

section features an insider’s perspective of the US market. As this
section draws to a close, it is appropriate to highlight to Portuguese
SMEs that the US market is vast (this will be the subject of the
immediate and coming sections). There are many companies of
various sizes and expertise looking to gain or increase US market
access and distribution. The costs of compliance failure are great;
there can be mandatory waiting periods if compliance is not
adhered to or if products fail to be approved. In a market of this size,
where competition is extensive, the costs of not being “export ready”
are great, as explained by a trade association representative.
You don’t get second chances. You need to be starting with a

concern that your first projects go well than making any amount
of money. If you mess up on quality or delivery… this industry
is fragmented, but it’s a small industry. If you get to one of our
receptions at StoneExpo where we are all standing around
enjoying a drink, people talk. If someone says they had a bad
experience, that means now there’s eight more people who won’t
do business with you. It can be unforgiving.58
58 Ibid.

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Section 5:
An Insider’s Perspective
5.1 Introduction
In this section, the report offers Portuguese SMEs a behind-the-

scenes sketch that first looks at US ornamental rocks industry
by examining the building stone subsector and related product
categories imports. This differs from the competition analyses
of Sections 2 and 3, as it analyzes supply and demand, rather
than import / export origin. Following, the report shifts to an
exploration of US trends that affect ornamental rocks demand by
examining market indicators. Here the report aims to refine export
development strategies and give a sense of the best US states in
which to market products.
After exploring US demand, the report turns to helping Portuguese

SMEs understand how they can supply US demand through a
series of recommendations, building on the previous sections. This
includes what Portuguese SMEs should expect when competing
in the US market, including information on trade shows and
publications that is essential to begin or enhance US networking
and relationship-building campaigns. The goal of this fifth section is
to provide SMEs with exclusive information that can be used to gain
a competitive edge.
5.2 US Ornamental Rocks Demand
This section begins by assessing, generally, the US demand for

ornamental rocks subsectors and product categories included in
this report and then, specifically, at other product categories that
are related to ornamental rocks and may present additional export
opportunities for SMEs. Production of ornamental rocks products
in the US is small in comparison to the country’s size, and part
of this is due to higher production costs that decrease the US’
competitiveness in this industry (Countertop Resource 2014). With
the limited exception of marble and granite, the US does not export
large volumes of the majority of product categories examined in
this report. For example, Portugal’s 2014 global exports of stone
mosaic tiles and marble, granite, and stone slabs – the four product
categories assessed in Sections 2 and 3 – totaled $56.3M. During this
same period, the US’ 2014 global exports in these same four product
categories totaled $34.8M.
However, there are at least four registered ornamental rock interest

groups (also referred to as lobbyists) that interact with the US
Congress to advocate for the interests of domestic ornamental
rock producers (Open Secrets 2016). A significant amount of the
imported building stone on the US market are typically either
products that are not widely produced in the US (stone mosaic
tiles) or unfinished (granite slabs, not “worked granite”). For example,

• 75
in 2015, the US import market for ornamental rocks was $2.37B; by
contrast, the US export market was $80M – up from 2014 – making
it the 18th largest global producer out of 29 (USGS 2016). This
section also examines product categories, such as worked granite,
to determine if these product categories also present opportunities
where SMEs could be competitive. This sets the context for US
ornamental rocks import demand.
5.2a Stone Mosaic Tile Demand

The stone mosaic tiles product category was the fifth most in-
demand category within the building stone subsector, which
has been the largest import subsector from the stone and glass
sector in the US since 2001. In 2000, glazed ceramics was the
most in-demand subsector in the stone and glass sector but with
a comparatively smaller market value and share, relative to the
market in 2000. The stone mosaic tiles US import market was
valued at $74.4M in 2014, and in this year, it overtook marble slabs in
terms of US building stone import demand.
Demand for stone mosaic tiles held steady as the sixth most in-
demand imported product category between 2013 and 2012,
but in 2011 it was fifth – as it was in 2014 – higher in demand than
marble slabs again. With the exception of 2012, US stone mosaic
tiles import demand has continued to increase annually from
0.39% of all building stone imports to 0.41% in 2014. In 2012, US
import demand fell to 0.36%, and the US imported stone mosaic
tile market fell by over $2M. However, since 2011, import demand for
stone mosaic tiles has increased 27.6%.
Figure 5.1 highlights how US demand for imported stone mosaic

tiles has positively progressed over the last five years and generates
a number of findings.
»» From 2011 to 2012, US import demand decreased by $1.7M or 2.9%

»» From 2012 to 2013, US import demand increased by $12.9M or
22.8%
»» From 2013 to 2014, US import demand increased by $4.9M or 7.1%
24.5%
»» Therefore, the average annual gain for the imported stone mosaic
tiles market is $8.6M.

Figure 5.1 – Stone Mosaic Tiles US Import Demand (2011-2015,
Millions)
From the analysis in Section 2, the report found inconsistent growth

with occasional declines but an average annual growth rate of 6.7%
for stone mosaic tiles, the highest of all product categories reviewed.
The import market was dominated by Canada and China, with over
80% of the total market in 2014; however, in 2015, their dominance
declined to 74% (Comtrade 2016). US demand for Italian stone
mosaic tiles has also declined by over 60% in four years. The
combinations of these factors – in addition to the overall growing
demand for imported stone mosaic tiles and increased Portuguese
competitiveness on the US market – supports the recommendation
from Section 2.4 that SMEs should endeavor to be US export ready
by 2017 to capitalize on extensive opportunities in this market.
The analysis in Section 3 found a similarly strong global market for

stone mosaic tiles with a minute decline in 2014. Asia holds a small
majority (51%) in the global market; by contrast, Asia holds 47% of
the US market. Similar to the US market, China and Canada are
the top exporting countries. Portugal exports more stone mosaic
tiles globally than the US, although Portugal’s global exports are
declining. The combination of these factors suggests that SMEs
can capitalize on a solid, growth market through stone mosaic tile
export development for the US.
A significant advantage SMEs have in export development for the US

market is that stone mosaic tiles can be marketed in two key ways:
home decor and residential and commercial building. In interviews,
the report parties discovered that major US construction importer,
distributor, and retailer, Home Depot, offers stone mosaic tiles, as
well as the North American home decor giant, Wayfair, which in
2011 incorporated over 200 brands under its corporate umbrella (PR
Newswire 2011). With building stone products being sold by two
US mega-retailers / distributors / importers in both the industries
of home décor and construction / building supplies, options for US
market entry are vastly enhanced for SMEs, discussed in Section 4.
It’s not only large home décor and construction supply stores
that sell a range of building stone; research uncovered several

• 77
medium and smaller stores in both industries selling building stone,
including e-commerce. The advantage specifically Portuguese SMEs
have in export development for the US market is that stone mosaic
tiles are synonymous with Portugal. In the US market, product
branding and marketing are almost as difficult as market access,
but Portuguese tiles are known globally. In essence, SMEs are not
simply exporting Portuguese stone mosaic tiles but the story of
Portugal as a picturesque urban seaside, and US suppliers search for
a particular look in new products. “We’re more look oriented than
reputation or price; the customers we’re dealing with are dealing
with a certain look… So that is what we look for in purchasing.”59
In identifying target markets for stone mosaic tiles in the US,

the report would suggest SMEs may have stronger markets in
the warmer US states that are not prone to earthquakes. From
west to east along the northern border, these states would be
(eastern) Nevada, Utah, Colorado, Kansas, Missouri, Illinois, Indiana,
Kentucky, West Virginia, to Maryland. Along the southern border,
target market states include (from west to east), Arizona, New
Mexico, Texas, Louisiana, Mississippi, Alabama, Florida, and all states
between this northern and southern range. This is not to suggest
that there is not a market for stone mosaic tiles in California and
New York; there certainly are, but SMEs may find states like Nevada,
Arizona, Utah, Colorado, New Mexico, Texas, and Florida to be some
of the strongest markets for stone mosaic tiles, not alone because
of the climate but also consumer preference. However, several
design magazines suggest that stone floors with radiant heating are
excellent choices for states with more variable or colder climates.
The most popular use for stone mosaic tiles in the US is for walls or
backsplash, and the least popular is for pools. Tiles are offered in a
variety of sizes, from less than one inch by one (1 x 1) inch (microtile)
to 12 x 12 inch. Most stone mosaic tiles were between one-quarter
and one-half inch in thickness. The most common shape of tile is
square but rectangular, circular, hexagonal, and irregular shapes are
also popular. Retail prices ranged from $2 to almost $90 per square
foot. Polished, glazed, or high-gloss tile appeared most popular;
the unpolished or matte varieties were less common. This does not
indicate there is a smaller market for unpolished stone mosaic tiles,
but they are less numerous on the US market.
5.2b Marble Slabs Demand

Marble slabs was the sixth most in-demand product category
within the building stone subsector; within the building stone
subsector, marble slabs and stone mosaic tiles alternate back
and forth as the most in-demand product categories assessed in
the report on the US market. The marble slabs US import market
was valued at $65.4M in 2014, down 10.5% from 2013. The decline
in US marble slabs import demand facilitated stone mosaic tiles
overtaking it in terms of US building stone import demand.
Demand for marble held steady as the fifth most in-demand

imported product category between 2013 and 2012, but in 2011 it
was sixth – as it was in 2014 – lower in demand than stone mosaic
tiles again. With the exception of 2014, US marble slabs import
demand has continued to increase annually from 0.38% in 2011
of all building stone imports to 0.42% in 2013. In 2014, US import
demand fell to 0.36%, and the US imported marble slabs market
fell by almost $8M. However, 2015 import demand for marble slabs
has peaked at $76.8M.
Figure 5.2 highlights how US demand for imported marble slabs

has positively progressed over the last five years and generates a
number of findings.

»» Therefore, the average annual gain for the imported marble slabs
market is $5.1M.
Figure 5.2 – Marble Slabs US Import Demand (2011-2015, Millions)
From the analysis in Section 2, the report found inconsistent growth

with occasional declines but an average annual growth rate of 3.8%
for marble slabs, similar but not as rapidly-growing as stone mosaic
tiles. However, from 2014 to 2015, the US market grew by another
4% (Comtrade 2016). The US import market was mostly held by Italy
and Peru, but unlike stone mosaic tiles, these two top exporting
countries only held around 60%. US demand for Italian lower grade
marble slabs is declining, but Section 2 hypothesized this may be
a conscious market shift by Italian producers to shift towards the
mid to higher end of the marble market. Peruvian marble slabs,
however, are declining overall by 5%. The combinations of these
factors – in addition to the overall increasing demand for imported
marble slabs and impressive Portuguese growth on the US market
– supports the recommendation from Section 2.4 that SMEs should
be US export ready by 2017, as this market is almost as progressive,
lucrative, and high in US demand as stone mosaic tiles.

• 79
The analysis in Section 3 highlighted that marble slabs is the largest
global export market of all four building stone product categories
with an average annual growth rate of 5%. Similar to stone mosaic
tiles, Asia holds a small majority (54%) in the global market.
Portugal exports over one hundred times more marble slabs
globally than the US. The combination of these factors suggests
that SMEs can capitalize on an increasing market in several markets
through marble slabs export development for the US.
A significant advantage SMEs have in export development for the

US market is that marble quarries are not commonplace in the
US, as, for example, granite, slate, or other stone such as limestone.
Domestic production is not a significant source of competition for
SMEs; however, as this section and Section 2.3 highlighted, there is a
significant growth potential for imported marble on the US market.
Approximately 2.51 million tons of dimension stone,60 valued

at $474 million, was sold or used by US producers in 2015…
Approximately 42%, by tonnage, of dimension stone sold or
used was limestone, followed by granite (21%), sandstone (17%),
miscellaneous stone (16%), and marble and slate (2% each). By
value, the leading sales or uses were for limestone (38%), followed
by granite (25%), miscellaneous stone (18%), sandstone (11%), and
marble and slate (4% each) (USGS 2016: 158).
The competition SMEs will face on the US market will be from

other foreign producers, which Sections 2.3, 3.3, and 3.4 examined.
Generally speaking, the top ornamental rocks exporting countries
on the US and global market – due to the size of the US market,
it is often reflective of the global market – are (by tonnage) China,
Turkey, India, Iran, and Italy (USGS 2016). Because of continued
political and economic sanctions, Iran is not a significant US
exporting country, removing one of the world’s top exporting
countries from the US market – another advantage for SMEs.
In identifying target markets for marble slabs in the US, the report
would suggest SMEs may have stronger markets in the states that
are not major marble production states. USGS (2016) highlights
that 34 out of 50 US states produce mine for ornamental rocks; 216
companies, operating 293 quarries produce building stone products.
As highlighted in the previous paragraph, almost half of US production
is in limestone. Only 2% are producing marble, and the key states
producing marble in the US are Vermont, New York, Georgia, Colorado,
and Alabama. This is not to suggest that there is not a market for
marble slabs in these states; marble quality and grade vary, and SMEs
may produce alternative grades to what is mined in these states.
However, SMEs may find market access ease greater in other states.
Once SMEs have entered the US market, further investigation through
newly established networks could yield differentiated marble markets
for SMEs in these top marble-producing states, as well.
60 The United States Geological Survey (USGS 2016i) defines dimension stone similarly to
how Portugal defines ornamental stone, as: “Dimension stone can be defined as natural rock
material quarried for the purpose of obtaining blocks or slabs that meet specifications as to
size (width, length, and thickness) and shape.”

The most popular use for marble slabs in the US is for interiors –
kitchen and bathroom surfaces, walls, flooring, fireplaces or mantels
– and the least popular is for outdoor use, such as walkways, tables,
and benches. Interior use ranges from luxury full-scope walls or
floors to a thin accent strip known as a threshold. Slabs are offered
in a variety of sizes. Most marble slabs on the retail market were cut
between two centimeters (cm) to two inches in thickness. Retail
prices ranged from $7 to almost $100 per square foot, depending
on the source and quality, and one US importer and retailer
highlighted why price fluctuates so greatly with marble. “Marble has
a wide price range; Italian marble can go down to $14/square foot
to $80/square foot. The price point has more to do with whether
people seeing it as limited production or limited supply; that drives
more demand and hence drives prices up. People are willing to pay
more for something more special.”61 The report parties discovered
Portuguese marble slabs (two cm thick) with dimensions and
prices range from 80x40 inches for $555 on the lower end to 96 x
48 inches for $800 with a US retailer. Brushed and matt finishes
appeared most popular; the polished varieties were less common.
5.2c Granite Slabs Demand

Granite slabs was the seventh most in-demand product category
within the building stone subsector; this product category remained
as the seventh most in-demand throughout the four-year period
except. The granite slabs US import market was valued at $33.1M in
2014, half the size of the 2014 marble slabs product category and
down 10.1% from 2013 – similar to marble slabs. Since its peak in
2011, the US granite slabs import market has declined over 30%. At
its peak, marble slabs composed 0.32% of US building stone import
demand, and in 2014, demand reduced to 0.18% of total subsector
demand. However, 2015 import demand for granite slabs has seen a
hard rebound at $47.2M, just $1.2M shy of the 2011 peak.
Figure 5.3 highlights how US demand for imported granite slabs

number of findings.

»» From 2012 to 2013, US import demand decreased by $6.9M or
15.8%
»» From 2013 to 2014, US import demand decreased by $3.7M or
10.1%
42.6%
»» Therefore, the average annual loss for the imported granite slabs
market is $1.2M.

• 81
Figure 5.3 – Granite Slabs US Import Demand (2011-2015, Millions)
From the analysis in Section 2, the report found a steady annual

rate of decline of 9.1% and a market that peaked prior to 2011.
However, from 2014 to 2015, the US market almost doubled,
growing by 42.5% in a single year – a likely unsustainable growth
rate (Comtrade 2016). The US imported granite slabs market is 80%
controlled by India, Brazil, and China, which are known for lower
to mid grades of granite. However, the US import market appears
highly open to dynamic and diverse competition. In 2014, Portugal
became a significant US granite slabs export country (greater than
0.0% market share) with a steadily increasing annual growth rate.
Considering the US import market’s recent recovery, dynamic and
open competition, and increased Portuguese competitiveness, this
section highlights the challenges in the US imported granite slabs
market – see below – and recommends SMEs should work toward
export readiness for 2017.
The analysis in Section 3 highlighted that granite slabs is an almost

$1B global export market with uninterrupted growth from 2011
to 2014 and an average annual growth rate of 5% – identical to
marble slabs. More so than the other two product categories,
Asia dominates the global market, occupying 78%. Of Portugal’s
global granite slabs exports, only 0.2% is exported to the US. The
analysis suggested SMEs apply their global competitiveness to the
US market to compete at the same level as exporting countries
is outcompetes by a wide margin on the global market, such as
Mexico and South Africa.
The challenge for SMEs in the US market is that domestic granite

production is highly competitive and product-specific. “Customers
want a certain wave or texture in the granite.” 62 One quarry
mentioned that they produce a unique variety called “Rockport
granite”, and demand for their specialized granite is uninterrupted.
“We’re pretty much in a niche market of our own. We primarily
sell for steps platforms and posts; everything is cut and split and
not machine finished, which is also unique. We’re a pretty small

operation on top of being a niche, and so market demand changes
don’t tend to affect us.”63 When asked if their specialty granite is
affected by foreign imports, the quarry responded: “No, the type of
stone is different; we don’t really have any competition. If we were
producing a different type of stone or if foreign suppliers were
producing our type of stone, then perhaps there would be an effect,
but not so much in granite.”64
Similarly, another US quarry is producing a variety of granite

called “silver cloud” – “a silver-gray medium-grained granite with
varying patterns”.65 When asked if they were able to keep up with
US demand for their specialty granite, the quarry responded that
they: “had no problem because our stone is very unique. We are
the only silver cloud quarry in the world.”66 Therefore, if SMEs
are also producing a unique variety of granite such as the two
mentioned here, the US market offers consistent demand for
specialty stone, and the key to US market access with specialty
stone is demonstrating the unique character and quality of the
product, following a grading certification, such as those provided by
the Natural Stone Council. The Natural Stone Institute is a US trade
association that describes itself as a “technical powerhouse”. “We
have a stone testing lab, and we’re the only trade association in the
Western hemisphere with their own in-house testing lab. The only
other in the world is in Australia. We try to be ahead in that front.”67
Although Section 2 highlighted possible decline in consumer

preference for granite, increased US competitiveness in specialty
stone could explain the four-year decline in granite slabs import
decline (Fink 2009). A South Dakota granite quarry interviewed
indicated that they have not witnessed a decline. “We’ve, of course,
faced some challenges, but we’ve also been in the business for 90
years. Things change, but we have always been able to adapt.”68 The
United States Geological Survey (USGS) (2016) highlights several
findings that help SMEs better understand US granite slabs import
demand, such as:
»» US domestic production has increased from 462 tons in 2011 to

530 tons in 2015, an average annual production increase of 2.8%
»» US granite slabs imports have also increased – contra findings in
this section and Section 2 – at an average annual rate of 5.8%
»» US granite exports have increased at an average annual rate of 1.9%
»» US quarry employment has declined from 1,300 jobs in 2011 to
880 jobs in 2015 – average annual rate of decline of 7.5%, and the
Bureau of Labor Statistics (2016) highlights that this number may
have declined almost another 1% in from 2015 to 2016.
64 Ibid.
66 Ibid.

• 83
It is widely believed that granite slabs imports are more competitive
on price, likely due to lower production costs, although the
Chinese granite is vastly perceived as of low quality (Countertop
Resource 2014). There is a larger domestic granite industry in the US
compared to marble, but whether this industry is competitive and
sustainable with a declining workforce is questionable. The South
Dakota quarry referenced above added that foreign granite imports:
“hurt our sale of blocks more so than anything. We don’t do a lot of
the product working here; we’re selling the big masses of granite,
but that’s been affected by foreign importers absolutely. Because
it’s such a great difference in price the lower quality granite is really
where we have been more effected.”69 A Colorado granite quarry
owner concurred: “China, South America mainly Brazil, Puerto
Rico, and India – they can pretty much always undersell someone,
especially in large quantities.”70 SMEs will face both domestic and
foreign competition on the US market, but it appears as if import
demand is rebounding and growing.
In identifying target markets for granite slabs in the US, the report
would suggest – similar to marble slabs – SMEs avoid market entry in
states where granite production is higher – if they are not producing
specialty stone – such as Texas, Vermont, New Jersey, New Hampshire,
Massachusetts, Maine, Pennsylvania, Georgia, South Dakota, Colorado,
North Carolina, and Minnesota. This is not to suggest that there is not a
market for granite slabs in these states; granite quality, color, and grade
vary. For example, a specialty granite quarry in Massachusetts said
their distribution reach is: “mainly in state, but [we] work all over New
England.”71 The report would not advise that SMEs aim to access the
US granite slabs market from the northeast US in particular, as granite
production is highly concentrated in this region as well as the Rocky
Mountain region, which begins in New Mexico and ranges northward
to Canada. California also possesses significant stores of natural
granite; however, several of California’s key granite production sites are
nationally protected from mining. Additionally, several of the granite
quarries interviewed indicated they have high export demand, which
suggests that significant amounts of US granite are not sold on the US
market – something the USGS survey also confirms.
The most popular use for marble slabs in the US is for interiors –
kitchen and bathroom surfaces, walls, flooring, fireplaces or mantels
– and slightly less popular is for outdoor use, such as buildings, bridges,
paving, and curbing. Granite is a highly popular US building material.
Slabs are offered in a variety of colors with some of the most popular
being brown, tan, grey / black, and green. Like marble, granite slabs
sizes range; most marble slabs on the retail market were cut between
a half inch and one-and-three-quarter inch in thickness. Retail prices
ranged from $3 to over $300 per square foot, depending on the source,
color, and quality, and this was confirmed in interviews with granite
quarries in the US. Almost all granite quarries interviewed agreed that:
69 Ibid.

“pricing varies a ton based on the thickness and quality.”72 A quarry
in the state of Georgia added that price: “can fluctuate so much. In
terms of dollars per square meter, some slabs range from $40 to over
$1,000.”73 Polished finishes appeared most popular.
5.2d Stone Slabs Demand

Stone slabs was the eighth most in-demand product category
within the building stone subsector; it had the lowest demand
of all building stone product categories in each year from 2011
to 2014 except in 2013, when it was the second lowest compared
to calcareous stone slabs. The stone slabs US import market was
valued at $17.4M in 2014, up 3.6% from 2013. The US import market
for stone slabs peaked in 2007 at $29.5M and has been in steady
decline since it bottomed out in 2011 at $15.3M.
Since 2011, the US stone slabs import market has been in recovery.
At its 2007 peak, stone slabs composed 0.18% of US building stone
import demand, and in 2014, demand reduced to 0.097% of total
subsector demand, which is even lower than when market value
bottomed out in 2011. In 2011, stone slabs comprised 0.19% of total
building stone subsector demand. However, 2015 import demand
for stone slabs continued to increase at $19.2M, still over $10M short
of 2007 peak.
Figure 5.4 highlights how US demand for imported stone slabs

number of findings.

»» From 2012 to 2013, US import demand remained (more or less)
unchanged
»» From 2013 to 2014, US import demand increased by $600K or 3.6%
»» Therefore, the average annual gain for the imported stone slabs
market is $975K.
Figure 5.4 – Stone Slabs US Import Demand (2011-2015, Millions)

• 85
From the analysis in Section 2.3, the report found excellent
opportunities for SMEs in the US stone slabs market. With a fairly
steady annual rate of decline of 3.3% and 10% market value increase
from 2014 to 2015 (Comtrade 2016). The US imported stone slabs
market is historically controlled by Mexico and India, but in 2014,
China outcompeted India. Collectively, these three exporting
countries hold about 40% of the US market, which allows for ample
and dynamic competition. Prior to 2014, Italy historically held
approximately 11% of the US market, which is comparable to India
and China’s market share; however, in 2015, Italy’s US exports were
cut by half. Portugal has grown at an impressive average annual
rate of 20.4%, which is likely too high to be sustainable over many
more years; for example, Portuguese stone slabs exports to the US
from 2014 to 2015 were up 8.7% (Comtrade 2016). Considering the
strong and steady US import market growth, dynamic competition,
increased Portuguese competitiveness, and the continued, albeit
lower by comparison, US import demand for stone slabs, SMEs
should work toward export readiness for 2017, particularly while
there is such strong momentum behind Portuguese products.
The analysis in Section 3 highlighted that stone slabs is a $457M
global export market. Although it is smaller than the other
product markets, it continues to offer excellent opportunities
for SMEs’ export development. The global market experienced
a considerably high average growth rate of 6% annually. In 2014,
Asia controlled almost 70% of the global market, which has been
steadily increasing since 2011. Portugal held 1.4% the global stone
slabs market, and the analysis highlighted that Portugal’s US
exports were more competitive than its global exports. The analysis
suggested SMEs could take advantage of the fact that other strong
global exporting countries – Jordan and Palestine – face market
access barriers on the US market.
A significant advantage SMEs have in export development for the

US market is that Portugal is increasingly supplying US import
demand for stone slabs. In 2014, Portugal supplied a total of
2% of the total US market after slow but fairly steady increases.
Because the type of stone slabs is indistinguishable beyond being
“calcareous” or “other” in the HS, it is difficult to determine SMEs
advantages and challenges in assessing US import demand.
Calcareous stone includes soapstone and limestone, which is one of

the most highly produced and mined stone products domestically.
Therefore, SMEs should be aware that if they aim to export limestone
slabs, the US – and / or the central and eastern US regions, including
the states of Texas, Indiana, Wisconsin, Massachusetts, and Georgia
that produce up to 66% of US domestic stone slabs – may present a
challenge for stone slabs export development (USGS 2016). However,
as Section 5.2c highlighted, US mining employment is declining,
which indicates continued future increases in US import demand –
also confirmed in the previous sections.
In identifying target markets for stone slabs in the US, the report
would suggest SMEs may have stronger markets in the states that
are not major stone production states; however, if the stone slabs
SMEs are exporting are other than soapstone and limestone, this
recommendation could be less relevant. The key states producing

limestone are Texas, Minnesota, and Wisconsin; for soapstone,
Virginia is the top producing states. Sandstone slabs primarily
originate in Montana, Texas, Arkansas, Ohio, Washington, and
Colorado, and quartzite – a key ornamental rock export for Portugal
– is mined in the states of Utah, Idaho, and Montana. Again, this
is not to suggest that there is not a market for stone slabs in these
states; indeed, as the analysis has uncovered type and color of stone
vary widely between these top producing states, and there is likely
still a market for imported Portuguese stone slabs in these states.
Rather that product differentiation and uniqueness in building
stone is key to accessing and growing in US markets where certain
stone types are widely produced.
A large importer and retailer in Houston contributed that: “people

are finding stone all over the place, but it’s all about how unique
and special it is to the individual and how it is marketed. We just
had a guy come in and pay $60 / square foot for quartzite that was
very unique, and he loved it. The customer’s perspective plays a
big key in what they and we buy.”74 A Colorado sandstone quarry
concurred that product differentiation has been key to their
success. “We have a unique looking stone, and that’s what sets us
apart.”75 Whether sandstone, quartz, or limestone, Portuguese SMEs
may find they are able to effectively compete in the US market by
offering a unique stone product.
There are always people out there wanting sandstone. It’s become
more popular as of late. It’s unique, and no two stones look alike.
People gravitate towards it once they see it in our showroom…
People are trying to find something unique, that’s what we see
the most. If you’re putting the money into a kitchen renovation,
which is an expensive undertaking, then you want something that
will set it apart. In my experience, granite countertops can look a
little too similar to other granite. Every house in Arizona has the
exact same looking granite; it’s crazy! We’ve had families move
from Arizona to here, and they see the uniqueness of our stone.
They just love it. 76
Most commonly, polished stone slabs are used for interiors – kitchen
and bathroom surfaces, walls, flooring, staircases, sills, door jambs,
wainscots, fireplaces or mantels – and finished stone slabs are
used for exteriors, such as bridges, walkways, paving, and benches.
Because the stone in stone slabs can vary widely, it is difficult to
highlight the most common sizes, finishes, and prices. Thickness
remained consistent at between two to three cm; slabs sizes ranged
from 2 x 2 to 156 x 120 inches, and as such, prices ranged from $2
for the smaller pieces to over $700 for a pallet. Research uncovered
several online retailers offering Portuguese stone products, and the
majority indicated that these products were available by “special
order only”, which would fit the description of dropshipping
described in Section 4.
76 Ibid.

• 87
5.2e Worked Building Stone Demand
Examining US import demand for the four building stone
product categories reviewed in the report helped build on the
recommendations and strategies suggested in the previous sections
and constructed a basis for SMEs to understand the domestic US
ornamental rocks industry. In large part, each state conducts their
own finishing and cutting work for customized pieces of ornamental
rocks used on a project-by-project basis.77 Interestingly, there is even
stronger demand in the US for “worked” building stone than slabs,
which up until this point have been the focus of the report.
This section assesses US import demand for the worked building

stone product categories, which SMEs may be producing and may
offer them an easier, more lucrative, and quicker way into the US
market. Building stone is the subsector in all US stone and glass
imports showing the highest demand, and the previous sections
examined product categories that ranged from fifth to eighth in
demand. This assessment looks at the first through fourth most in-
demand product categories, including:
»» Worked granite
»» Worked marble
»» Worked building stone
»» Worked calcareous stone.78
This analysis will assess opportunities for Portuguese SMEs in each

of the five product categories by evaluating:
»» US demand
»» Average annual gains / losses
»» Average annual growth / decline rates
»» 2014 to 2015 changes
»» Top US exporting countries
»» Portugal’s most similar US export competitors.
Table 5.1 examines four-year US demand trends in these highly

demanded product categories. The table demonstrates that
from 2011 to 2014 all worked building stone product categories
experienced overall growth, with the exceptions of worked granite
in 2014 and worked calcareous stone in 2013. Beginning with
worked granite – the most in-demand product category within the
building stone subsector – there is excellent and fairly steady growth
in the highly lucrative US import market. From 2014 to 2015, US
import demand for worked granite declined but by a mere 0.7%,
compared to the 42.5% increase in US import demand for granite
slabs from 2014 to 2015 (Comtrade 2016).
77 See Interview 6.5, Appendix 3.
78 See Appendix __ for product codes.

Table 5.1 – Worked Building Stone US Import Demand (2011-2014)
Worked Worked
Worked Worked Building Calcareous
Granite Marble Stone Stone
2014 Value $1.3B $888M $133M $97M
2014 Share 7.3% 5% 0.74% 0.54%
Year-to-Year Change ↓ $110M ↑ $45M ↑ $1M ↑ $7.3M
2013 Value $1.41B $845M $132M $89.7M
2013 Share 8.1% 4.9% 0.76% 0.52%
Year-to-Year Change ↑ $270M ↑ $167M ↑ $27M ↓ $10M
2012 Value $1.14M $678M $105M $99.7M
2012 Share 7.2% 4.3% 0.66% 0.63%
Year-to-Year Change ↑ $100M ↑ $51M ↑ $12.8M ↑ $17M
2011 Value $1.04M $627M $92.2M $82.7M
2011 Share 7% 4.2% 0.62% 0.55%
Average Annual Gains $86.7M $87.7M $13.6M $4.8M
Average Annual Growth Rate 5.7% 9.1% 9.6% 4.1%
The US is the top export destination for worked granite, and

the top 2014 countries exporting worked granite to the US were
Brazil ($670M), China ($272M), India ($159M), Italy ($127M), and
Spain ($24.2M). In the same year, Portugal exported $328K of
worked granite to the US, and from 2014 to 2015, these US exports
increased 157% (Comtrade 2016). Portugal’s US worked granite
export competitiveness offers conflicting findings. Portugal has
become more competitive in this US market with an average
rank of 14 out of 52 competitors; it also outcompeted Germany in
2014 to be the third largest European worked granite exporter on
the US market behind Italy and Spain. Although, this example of
increased Portuguese competitiveness appears to be a decline in
German competitiveness.
Portugal has an average annual rate of decline of 3.5% in the US

import market; Germany’s rate of decline has been 35.4% since
2011 – ten times the rate of decline of Portugal. Examining more
macroeconomic factors, the report finds that 2012 and 2014 were

• 89
particularly bad years for Germany, losing 356K of their market
value in 2012 and a further $570K in 2014. Comtrade (2016)
indicates Germany’s 2015 US worked granite exports increased
almost 330%. While this growth rate is slightly more than double
Portugal’s 157% 2014 to 2015 increase – and considering Germany’s
2014 US worked granite exports were about two-thirds greater
than Portugal’s this is not an alarming finding – these market
fluctuations indicate there may be macroeconomic forces at work
influencing US import demand, such as increased US domestic
production (USGS 2016).
Including Germany, Table 5.2 offers a glimpse into Portugal’s most

consistent US imported worked granite competitors. Portugal’s
competitiveness has been consistent, as has Hong Kong’s. Germany,
Mexico, and Turkey’s US export values have fluctuated more.
Continued Portuguese competitiveness symbolizes considerable
opportunity for SMEs. Contrast these findings with the analysis of
granite slabs from Section 2.3 that found a 9.1% average annual
rate of decline for the US import market. The possibilities for SMEs
producing granite – worked and / or slabs – appear an excellent
opportunity to grow or diversify export development.
The report would suggest that because the US market for imported
granite slabs is approximately 5.8% the size of the US market for
imported worked granite, if SMEs have the capabilities to work
granite, this US market may provide opportunities for quicker,
easier, and more lucrative export development. An importer and
distributor interviewed indicated that the majority of what they
buy is: “finished slabs, and we distribute it that way.”79 A Houston
importer and retailer that operates out of one of the US’ busiest
ports and sells only imported stone contributed why there is such a
high import demand for worked building stone in the US compared
to slabs. “Very little of our stone is not finished. It’s too expensive to
finish the stone; it’s cheaper to sell the unfinished block to China
and India, have it finished there, and send it back into the US.”80
However, a Florida importer and retailer indicated that at times it
is cheaper to import finished stone, and other times it is cheaper
to import slabs and finish the products themselves.81 Therefore, it
appears that there continue to be strong US markets for worked
building stone and slabs.
79 Interview 6, Appendix 3; see also Interviews 8, 9, 10, and 15.

Table 5.2 – Portugal’s Competitors in the US Imported Worked
Granite Market (2011-2014)
2011 2012 2013 2014 Average Rank
Portugal 14 14 15 14 14
Hong Kong 13 12 12 12 12
Germany 10 11 12 16 12
Mexico 16 13 13 11 13
Turkey 15 17 17 13 16
Moving to worked marble, the most second most in-demand

product category within the building stone subsector – Table 5.1
showed even better growth in worked marble compared to worked
granite, and this could be related to the less predominant domestic
US marble industry. The worked marble US import market had
a higher average annual growth rate (9.1%) than worked granite
(5.7%), higher average annual gains ($87.7M compared to $86.7M),
but less demand and a smaller overall market ($888M in 2014
for worked marble compared to $1.3M for worked granite). From
2014 to 2015, US import demand for worked marble increased by
a further 7.4% after years of uninterrupted growth, compared to
worked granite’s 0.7% 2015 decline (Comtrade 2016).
The US is the top export destination for worked marble, and the top
2014 US worked marble US exporting countries were Turkey ($273M),
Italy ($271M), China ($165M), Mexico ($45.7M), and Spain ($34.7M).
In the same year, Portugal exported $3.51M of worked marble,
compared to the $328K of worked granite Portugal exported to the
US in the same year. From 2014 to 2015, these US exports decreased
2.4% (Comtrade 2016). Portugal’s US worked granite export
competitiveness offers encouraging findings, as Portugal continues to
be very close to being a top ten US exporting country.
Portugal has become more competitive in this US market with

an average rank of 14 out of 62 competitors. This is the same rank
Portugal had in worked granite, but there are, on average, ten
more competitors on the US worked granite market, which means
it is more competitive in worked granite than worked marble.
Portugal’s most consistent competitors – the same for each year
except 2013 when Portugal declined in competitiveness while its
most similar competitors became more competitive, compounding
Portugal’s slight decline – are Other Asia and Egypt. In 2014, these
two competitor countries exported $3.7M and $3.35M respectively,
compared to Portugal’s $3.51M.

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Portugal has an average annual growth rate of 6.2% in the US
imported worked marble market, Other Asia of 5.6%, and Egypt of
6%. This highlights how close the competition is between these
three competitors that are each increasingly close to a top ten
US exporting country position. Comtrade (2016) indicates that
Other Asia’s 2015 US worked marble exports increased almost 15%;
Egypt’s decreased over 19%, compared to Portugal’s 2.4% decline.
With Portugal’s stronger average annual US worked marble export
growth rate, it was in a good position to outcompete Other Asia
within five years, if market conditions remain constant. However,
with Portugal’s 2015 decline, worked marble producers will have
to ensure 2017 exports do not continue to decline, or Portugal’s
competitiveness in the US market could likely similarly fall.
Section 2.3 that found a 3.8% average annual growth rate for the US
imported marble slabs market and a further 4% market increase in
2015 (Comtrade 2016). The possibilities for SMEs producing marble
– worked and / or slabs – are possibly the strongest opportunity to
grow or diversify export development. The report highlights that
the US market for imported marble slabs is approximately 7% the
size of the US market for imported worked marble. If SMEs have the
capabilities to work marble, this category provides more options
for growth due to the sheer size of the market. This combination of
factors – with Portugal’s 2015 reduced US worked marble market
competitiveness – provides SMEs with excellent opportunities to
not only grow their businesses but also contribute to stabilizing and
enhancing Portuguese competitiveness on the US market.
Next, the two product categories of worked building stone – the
third most in-demand building stone product category and
somewhat vaguely defined as other worked stone for use in
monuments, bases, markers, and other purposes – and worked
calcareous stone – the fourth most in-demand product category –
are assessed together. It is difficult to distinguish these two worked
product categories from a slabs equivalent because the stone slabs
product category was defined as calcareous and other building
stone. As such, the best way to assess the product categories of
worked building stone and worked calcareous stone is collectively,
comparing them to the stone slabs product category. This
comparison allows the assessment to make a similar comparison as
the previous paragraphs have done with worked granite and granite
slabs, as well as worked marble and marble slabs.
Table 5.1 showed average annual gains of $13.6M for worked

building stone and an average annual growth rate of 9.6%. The table
highlighted average annual gains of $4.8M and an average annual
growth rate of 4.1%. US import demand for worked building stone
is 27% greater than worked calcareous stone. From 2014 to 2015, US
import demand for worked building stone increased by a further
5.2% after years of uninterrupted growth, compared to worked
calcareous stone’s slightly lower 5% 2015 growth (Comtrade 2016)
with one year of decline (2013) in US demand.
The US is the top export destination for both worked building stone
and worked calcareous stone. The top 2014 US worked building
stone US exporting countries were China ($36.3M), Canada ($22.8),
Brazil ($22.5M), Italy ($21.5M), and India ($7.8M). In the same year,

Portugal exported $389.6K of worked building stone, compared to
the $13.5M of worked calcareous stone Portugal exported to the US
in the same year. In 2014, Portugal was the second largest country
exporting worked calcareous stone to the US, behind China ($19.6M)
and outcompeting Italy ($11.4M), Turkey ($9.6M), and Spain ($6.5M).
From 2014 to 2015, Portuguese worked building stone exports to

the US decreased 36.7%; whereas Portuguese worked calcareous
stone exports to the US increased 4.4% (Comtrade 2016). Portugal’s
US worked building stone and worked calcareous stone export
competitiveness both offer encouraging findings. It appears though
Portugal has a higher average annual growth rate and average annual
gains in the worked building stone US import market, they have
reached the highest ranks of the US imported worked calcareous – the
very largest exporting country on the US market in 2013.
In worked building stone, Portugal became more competitive in

2014 in this US market, but this was after three consecutive years of
decline. In 2011, Portugal was the 18th largest US exporting country,
and by 2014, Portugal was the 26th largest, out of an average of
66 other competitors (see Table 5.3). Portugal’s competitiveness in
the worked calcareous stone US import market has also fluctuated
recently. However, with an average rank of second, the scope of
Portugal’s competitiveness in the US worked calcareous stone
import market is considerably different.
Table 5.3 – Portugal’s Competitors in the US Imported Worked

Building Stone and Worked Calcareous Stone Markets (2011-2014)
Average Annual
Worked Building Stone 2011 2012 2013 2014 Average Rank Growth Rates
Portugal 18 22 28 26 24 - 30%
Argentina 29 21 31 24 26 1.8%
Lebanon
32 31 29 27 30 - 1.5%
Norway 17 26 32 28 26 22.6%
Worked Calcareous Stone 2011 2012 2013 2014 Average Rank
Portugal
2 3 1 2 2 3.9%
China 1 1 4 1 2 10%
Italy 3 4 2 3 3 3.9%
With US worked building stone exports, Portugal has an average

annual rate of decline of over 30%; whereas, in worked calcareous

• 93
stone exports for the US, Portugal has an almost 4% average annual
growth rate. Portugal’s rapidly declining competitiveness in the US
imported worked building stone market is concerning, and SMEs
can contribute to increased competitiveness through relationship
building, excellent customer and product service, and enhanced
product availability. In the US imported worked calcareous
stone market, Portugal and Italy have identical growth rates, but
Comtrade (2016) indicates that Italy’s US exports declined 4.6%,
compared to Portugal’s 4.4% 2015 growth.
Section 2.3 that found a 3.3% average annual growth rate for the
US imported stone slabs market and a further 10% market increase
in 2015 (Comtrade 2016). The possibilities for SMEs producing
stone – worked building stone, worked calcareous and / or stone
slabs – are good for growing or diversifying export development.
The report highlights that the US market for imported marble
slabs is approximately 13% the size of the US market for imported
worked building stone and 18% that of worked calcareous stone. If
SMEs have the capabilities to work stone slabs, this US market may
provide excellent opportunities for SMEs’ export development due
to its size and scope.
Assessment of US Ornamental Rocks Demand

The results of this analysis are encouraging, as the majority of
product category analyses continue to confirm the previous
section’s recommendations, and this consistency helps SMEs build
sustainable strategies for export development. Granite slabs and
worked granite present somewhat challenging markets for SMEs’
export development due to domestic US production, but this
applies more to the granite slabs import market than the worked
granite US import market.
Taking a macro perspective of the eight building stone product

categories reviewed in this section and beginning with stone
mosaic tiles, the assessment found excellent opportunities and
advantages for SMEs in this sixth most in-demand imported
product category. With demand growing consistently since 2012,
SMEs have the advantage of cross-marketing stone mosaic tiles
to home decor trades people, brokers, retailers, distributors, and
importers, as well as these varied points of the supply chain in
the building materials / construction market. With an excellent
reputation that is growing in the US market, SMEs should find an
open market for Portuguese stone mosaic tiles in the US. However,
the report highlighted a range of states with a northern and
southern border where SMEs are more likely to find US partners,
considering climate and earthquake risk that can lower suppliers
and consumers’ preferences for stone tile.
Looking at granite – slabs and worked granite – the assessment

uncovered a stronger market for SMEs in worked granite, as it
does not appear to be declining at the rate of granite slabs. The
assessment examined common uses, sizes, thicknesses, finishes,
and retail prices on the US granite slabs market. Similarly, worked
marble appears to be a highly secure, growth market in the US
market with increasing demand, compared to marble slabs. With

increased Portuguese competitiveness, SMEs were presented with
similar recommendations for becoming export ready for the US
retail market by 2017.
US demand for stone slabs, worked building stone, and worked

calcareous – all highly comparable – was highly differentiated. US
demand for imported stone slabs peaked in 2007 and bottomed
out in 2011. Demand has continued to increase since, but 2015 US
import demand is still below 2007 levels. However, with an average
annual growth rate of 3.3%, a 2015 increase of 10%, and Portugal
continuing to increase its competitiveness in supplying US import
demand, this report recommended SMEs work towards 2017 export
readiness. The assessment highlighted US state markets where
potential partner searches would be more difficult due to US
domestic production, and overall, SMEs may find if they are looking
to export limestone that the US may be a challenging market.
The two worked product categories – though extremely different – offer

excellent opportunities for SMEs’ export development, particularly
worked calcareous stone where Portugal is, on average, the second
largest country exporting to the US at the same level as China.
There are good growth opportunities for SMEs in this market, and
the findings suggest SMEs market towards trends discussed in the
following section. The report emphasizes that timing is key in the US
market, and the section now turns to analyzing US trends as part of an
insider’s perspective of how to supply this US demand effectively.
5.3 Trends Affecting US Supply and Demand
This section focuses on giving Portuguese SMEs an idea of how to

supply demand in the US market by examining trends that affect
supply and demand. Trends in the US, in general, are a much stronger
market force compared to Europe. For example, while Europe tends
to rely on tradition and craftsmanship, the US embraces trends. While
the ornamental rocks industry is less susceptible to trends – compared
to home décor, for example – trends can affect building stone use,
finishing, and price.
For example, a trade association representative suggested that trends

can be: “as simple as color and reflectivity. In the 80s, it was pink
granite with polished finished. Now we’re in a much flatter, muter era,
a lot more limestones. The designers want the more muted, more
earth tones with lower reflectivity. The back to nature look is in now,
but there are several fashion drivers, ranging from the residential to the
commercial and from interiors to exteriors.” 82 Therefore, SMEs should
monitor US market and industry trends in timing the arrival of exports.
This section will explore two key trends: the US construction and
building recovery dynamic and a move towards “luxury on a budget” /
do-it-yourself (DIY). These trends also reflect on US consumer spending
and preferences that shape supply and demand.

• 95
5.3a US Construction and Building Recovery
Sections 2 and 3 highlighted that growth in building stone US
import markets were driven by improvements in the housing
sector, which were stimulated by increased job growth across 2015.
From 2014 to 2015, almost three million jobs were added to the US
economy (Stilwell 2015). The sustained jobs growth has boosted
consumer purchasing, which has supported growth in the housing
market (Kusisto 2016). The National Association of Realtors’ chief
economist remarked that the scope of recovery in the US housing
market outpaced supply, with new building in the residential sector
urgently needed, and in 2015, new residential building increased by
almost 10% (Bloomberg 2016; Stilwell 2015).
While the number of new home buyers has increased somewhat,

US home buyers are still experiencing difficulties in lending
(Bloomberg 2016). Difficulty in obtaining a mortgage has had
two effects on the US market that are positive for SMEs exporting
ornamental rocks. The first effect is that many existing homeowners
are turning to home improvement products, and the second effect
is that the rental housing market continues to increase – particularly
at the higher ends of the rental bracket (Kusisto 2016). These effects
have, in turn, boosted the US construction and building industry’s
recovery, which have deep ties to the ornamental rocks industry.
Beginning with the first effect, many US homeowners are turning to

home improvement projects because of the continued difficulty in
obtaining a home loan / mortgage for two reasons. The first reason
is that with lending reduced, many current homeowners cannot
obtain a loan to “upgrade” to a new home (Kirkham 2016). This has
caused current homeowners to upgrade their existing home, rather
than move to a new home. The second reason that many current
homeowners are turning to home improvement projects while
lending continues to be slow is that if offers significant opportunity
to enhance their current home’s value through updates and
upgrades for when lending flows increase.
Whether homeowners are turning to home improvement projects

because of their inability to move to a new home or to enhance
their existing home’s value for the future sale’s market, the largest
US building stone trade association reflected that they are looking
to expand in the remodeling sector because: “that’s becoming a
huge sector. Remodeling is outpacing the new build sector.”83 The
Joint Center for Housing Studies (JCHS 2016) at Harvard University’s
Leading Indicator of Remodeling Activity projected: “that home
remodeling spending will increase 8.6% by the end of 2016 and
then further accelerate to 9.7% by the first quarter of next year.” The
JCHS (2016) predicts the US market for home improvement will
reach $325B by 2017, and this links of the construction and building
trend to the DIY trend, discussed below.
The most common remodeling or upgrade projects focus on

kitchens, bathrooms, and flooring, and these projects typically
involve upgrading ornamental rocks, such as upgrading from
83 Ibid.

laminate or carpet to stone or granite flooring (Kirkham 2016). A
Colorado granite quarry owner reflected that the increase in US
homeowners remodeling projects has been good for business.
[Demand has] been steady. Granite, in general, in a home always

adds value; people want to update their countertop surfaces. It’s
usually one of the first things when people want to do when they
go to renovate their home. The first room in the house they go to
– the kitchen – and they want natural stone because it looks great
and is functional. It improves the resale value of the house.84
Remodeling and home upgrade growth continues to translate into

sales in the professional and consumer markets. The professional
market can be generally defined as designer businesses engaged
in remodeling projects – from carpenters to fabricators to general
contractors to architects. Whereas, the consumer market is engaged
in direct sales of goods, which range from retailers to wholesalers.
The consumer market experienced – and is predicted to continue
to experience – slightly higher sales growth than the professional
market, and this builds on the recommendations made in Section 4
about the US distribution structure and channels for SMEs.
The professional market for home rebuilding experienced an

average annual growth rate of 4.6% from 2011 to 2015, and growth
in 2016 is projected to continue at this rate. However, current
projections for 2017 to 2010 see a lower growth rate of 3.5% in the
professional market. Whereas, the consumer market posted an
average annual growth rate of 4.7% from 2011 to 2015, and 2016
growth is estimated at 4.8%. Projections for 2017 to 2020 at around
4.5% – demonstrating how much the DIY and luxury on a budget
trends are impacting home remodeling and upgrades. The Home
Improvement Research Institute (HIRI) pointed to major home
and construction supply chains, such as Home Depot and Lowe’s,
as the primary drivers of the consumer market. “Sales of home
improvement products through the major home center chains
posted a strong fourth quarter and solid full-year results for 2015,
with combined growth above 6%” (Craig 2016).
Where the consumer market is growing more slowly are in: “paint
and wallpaper stores (2%), lawn & garden equipment & supply
stores (1.2%), floor covering stores (1.9%), and appliance stores (0.5%),
and department store sales declined 2%” (Craig 2016). This should
help SMEs to identify their target markets, as the larger chain
retailers, distributors, and importers may be more challenging for
SMEs entering the US market, but growth is expected to be much
higher through these channels. Currently, the western region of the
US has the strongest market for home remodeling, followed by the
midwest, south, and northeast; future (post-2016) growth in home
remodeling is expected to follow this same distribution, although
the western and midwestern regional markets are expected to see
growth at the same pace, followed by the southern region (NAHB
2016). The US northeastern region has and continues to expect to

• 97
post the weakest markets for home remodeling (NAHB 2016).
The second effect of continued reduced home mortgage lending in
the US has been an increase in the rental housing market continues
to increase, especially at the higher ends of the market (Kusisto
2016). “Of 370,000 multifamily rental units completed from 2012 to
2014 in 54 US metropolitan areas, 82% were in the luxury category”
(Kusisto 2015). Major US metropolitan cities’ share of luxury
apartments declined somewhat to 75% in 2015, but the luxury
market is still the strongest and fastest growing in the US building
and construction industry (Blint 2016).
New luxury apartments are typified with “gourmet kitchens”,

“breathtaking bathrooms”, and multiple pools where marble,
granite, and high-end stone are common place. New buildings
range from the smaller scale with 20 individual units to over 300
units, and if SMEs can market towards these luxury apartment
or condo contractors, builders, and / or designers, lucrative and
possibly recurring contracts are the reward.
With demand for rental housing increasing, prices are as well,

producing pressure on the construction industry to rapidly build
new rental accommodation (JCHS 2013). The search for available,
cost-effective, building stone materials has changed the way the
construction industry finds new materials and producers. Interviews
with industry leaders suggest that while having an English-language
website with a full product catalogue, including product specs and
prices, helps US contractors and project designers research potential
building stone projects, quality and availability are key to securing
US supplier contracts. “Our website is the main medium for product
sales, and it is there for communication between my company and
those trying to get in contact... For the most part, the material we sell
is sold to the [building] contractors we work with directly on projects,
and so most business is done that way.”85
These factors are also deeply linked to export volume, and Section
2.3 reinforced the importance of consistent export volume
in accessing and growing in the US market. A large Florida
importer and retailer reiterated that finding a US partner with
a corresponding export volume will be key to success in the US
slabs market, but he also added that there can be considerable
lapses in time between shipping and product sales that can affect
SMEs success on the US market. “For us, they need to be able to
ship enough to compete with the big companies and producers.
They have to be able to afford to hold the stone for up to 90 days.
If they’re small and they’re entire budget is based on selling one
load, then they may have issues if it ends up sitting in a warehouse
somewhere in Miami before being sold.”86
Additionally, if materials are damaged in transit, break upon

installation, US contractors and designers need to be able to replace
the damaged materials as soon as possible or risk falling behind
in their building contract – even if it means replacing the producer

that supplies the materials. In this regard, having a US location
or in-country representative can be the deciding factor between
replacing a supplier and being replaced for SMEs.
As to where SMEs with resources to invest in a US headquarters or

representative should establish a market presence, Balint (2016)
found that each US regions is growing in the luxury rental building
market with the strongest market – similar to home remodeling
– in the southeastern region, which is up by 119%. The Pacific
northwest region is also up 90% – with California luxury rentals
alone increasing 82% from 2012 to 2015 (Balint 2016). The luxury
rental building market is weakest in the northeast – 23% growth
since 2012 – and the mid-Atlantic region – up 26% from 2012 (Balint
2016). These are target markets where SMEs could not only look to
establish a US presence – if they have the resources or can establish
an export club – but they are also strong regions to conduct a
potential partner search.87
To briefly add to this, the US construction and building industry is

recovering in nonresidential building, as well, and SMEs have just as
many opportunities partnering with US suppliers and trades people
working in the nonresidential sector. Nonresidential building grew by
7.7% in 2015 and 82% in 2016, and these buildings frequently require
ornamental stone for a variety of purposes – interior and exterior
(AIA 2015). Similar to the home remodeling market, there are two
key markets that compose the nonresidential building sector: the
commercial or industrial sector and the institutional sector.
Beginning with the commercial sector, which has grown at over

double the rate as the institutional sector in both 2015 (11.8%) and
2016 (10.4%). In 2015, hotel building increased 15.3%, and estimates for
2016 are 10.4% growth. Office building increased 12.9% in 2015 and
projected 11.5% in 2016. In 2015 10.5% more industrial facilities were
constructed, and construction slowed only slightly in 2016 (10.1%).
Retail building increased 10.1% in 2015 and 9% in 2016 in the US.
Shifting to the institutional sector that grew overall at 5% in 2015

and even more (5.4%) in 2016. Specifically, 9.1% more amusement /
recreation facilities were built in 2016, and in 2016 building slowed
to 5.3% growth. Educational facilities buildings, including primary
and university (public and private), increased by 4.7% in 2015 and
increased to 5.2% building growth in 2016. Healthcare facilities
continue to be constructed in increasing numbers, 4.7% more in
2015 and 6.2% more in 2016. Finally, a surprising increase in religious
building construction – 1.2% in 2015 and 3.6% in 2016 – and religious
buildings often feature heavy use of ornamental rock.88 The report
mentions these specific areas where nonresidential building
is increasing in the US, as it may provide SMEs with increased
opportunities for export development in the US.
87 SMEs should further explore the Balint (2016) citation, as she provides several in-depth
recommendations on high-growth cities where luxury builds occurred in 2015.
88 All data originates with the American Institute of Architects (AIA) (2015).

• 99
5.3b Luxury on a Budget / Do-It-Yourself
The post-2008 decline of the US home building and construction
market had a deep effect on trades people working with
ornamental rocks – namely, business was abruptly halted. However,
the US building and construction market is growing after periods
of almost stagnant growth (Frank 2015; Gavin 2015). As Section
5.3a highlighted, one effect of growth in this market is that more
current homeowners are enhancing their homes’ values by
adding luxury improvements, such as granite countertops, marble
accents, and tiled kitchens, bathrooms, and flooring. Although
median household incomes and employment are rising in the US,
consumers continue to be hesitant to invest in trades people, like
designers and contractors’ services. In addition, while some new or
existing home buyers are having difficulty accessing loans for new
mortgages, loans for home improvement projects are also slow to
grow in the US.
This trend represents not only that US consumer spending is steadily

increasing but also that the US market presents highly lucrative
opportunities for SMEs to increase their profitability. Increased
purchase power and consumer confidences enhances the likelihood
a consumer will select granite, marble, or stone in their home
remodeling or upgrade project than a cheaper substitute, and
imported materials are often cheaper than domestic (in the case of
granite and stone, which are produced in the US). Portugal possesses
a number of comparative and competitive advantages – discussed in
Section 6.2b – and SMEs producing quality building stone products
at competitive prices can effectively supply this US trend.
This trend relies on the do-it-yourself home remodeler, and

the majority of Americans (70%) – despite a lack of technical
certifications – are increasingly turning to DIY (PR Newswire 2013). In
a 2015 survey of over 500 homeowners between the ages of 25 and
64 with incomes around or under $250,000 per year conducted
by New Penn Financial (2015) – a company that offers home
improvement loans – 45% indicated that they will spend $1,000 or
more on a DIY home improvement project this year, compared to
37 percent in the previous year.
As highlighted in the previous section, several of these DIY-ers

indicated that their motivation was to improve the value on their
home for future sales, and 43% said they were planning to build a
patio or walkway where ornamental rocks are the primary material
(New Penn Financial 2015). PR Newswire (2013) reported a survey
that further clarifies what other DIY home improvement projects
are occurring in American homes:
»» Garden or landscaping: 22%

»» Bathroom: 14%
»» Kitchen: 12%
»» Family / living room: 12%
While US DIY-ers are saving money by avoiding hiring a

tradesperson, the majority are spending a sizable amount on

materials: “35% of Americans spend between $1,000-$4,999 on
projects; 23% spend less than $500; 22% spend between $500-
$999; and 12% spend more than $5,000 annually (PR Newswire
2013). The first and the last grouping are those DIY-ers seeking
luxury on a budget, and SMEs should be advised that clever,
resourceful, and financially conscious DIY-ers have taken to self-
importing small volumes of materials to take cost savings to a new
level. To reach this – albeit small – demographic, the report advises
the best resource to reach any home improvement DIY-er: an idea-
sharing website with cross listed product catalogue for direct to
consumer e-commerce. A Colorado quarry that produces stone for
kitchen countertops advised that they: “do local advertising from
time to time, but we also see a lot of traffic, like yourself, come
through our website.”89
Well beyond the traditional website with a product catalogue,

which the report strongly recommends for SMEs looking to access
the US market, How-to videos on YouTube, product sample projects
and usages on Pintrest, and e-commerce sales points accessible
through Facebook, Etsy, and other social media are hallmark of
the building stone business that thinks about reaching the DIY
consumer – and US suppliers and the trade – in an innovative and
on-trend way (eMarketer 2014). In a 2013 poll of homeowners,
30% said they rely on online websites and DIY guides for home
improvement ideas and product suggestions; a further 14% took
advice from social media – up from 7% in 2012 (eMarketer 2014).
Spencer, Harding, and Sheahan (2014) highlight how BuildDirect – a
Canadian e-commerce retailer operating in the US market selling,
among other materials, slabs of and worked granite, marble, and
stone and stone mosaic tiles – used these and other social media
strategies to grow their US target market.
BuildDirect CEO Jeff Booth says the idea came to him when
grappling between significant lead times he experienced ordering
custom home improvement products from overseas and knowing
that the big chain retailers did not offer the quality, value, and
variety of kitchen counter or flooring material he knew were
available from foreign producers (Booth 2016). Booth’s BuildDirect
connects DIY-ers and trades people with foreign suppliers through
an online platform with products, prices, uses, and reviews – all
available to US retailers, distributors, and importers as well.
BuildDirect does stop there; in September 2016, Booth writes of
BuildDirect’s prototype platform that seeks to remedy the DIY-ers
main e-commerce issue: shipping materials over 150 pounds (Booth
2016). As with Section 5.3b, the report mentions developments like
this that affect how SMEs can supply US trend-related demands to
provide SMEs with a greater scope of opportunity for accessing and
growing in the US market.
Before continuing, it is worth pausing to emphasize the

recommendations made so far that will help SMEs keep pace of
US trends. The importance of knowledge of these trends cannot be
overstated; in the US, succeeding at any level of business requires

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positioning to be at the right place at the right time. This means being
ahead of the curve when it comes to US trends, but trends change.
5.4 Understanding How the Competition Responds to Trends
Supplying the US ornamental rocks market requires strategy

development and enhancements, some of which are outside the
scope of this report. Consistent sustainable export development that
is supported – financially and with other resources – by the European,
Portuguese, and local business community, such as AEP and the
Agência para o Investimento e Comércio Externo de Portugal (AICEP),
puts US market access and growth opportunities within SMEs’ grasp.
Before concluding, this section will help SMEs understand how the
competition responds to US market trends and how this gives them
the competitive edge that facilitates their success.
Providing SMEs with a sample of top US building stone and / or

ornamental rocks companies – including chains and independent,
brick-and-mortar and online only stores – are:
»» Home Depot
–– Large, North American big-box e-commerce and brick-and-

mortar retailer, distributor, and importer
–– $156.2B market capital (NY Times 2016)
»» Lowe’s
–– Large, North American big-box e-commerce and brick-and-

mortar retailer, distributor, and importer
–– $62.4B market capital (NY Times 2016)
»» Fletcher Granite
–– Granite quarry and fabricating company since 1881

–– Supplier for some of the US’ most well-known monuments,
buildings, bridges, parks, and architectural landscape projects
»» MS International, Inc
–– US importer of over 38,000 containers per year, including

hundreds of thousands of stone slabs and retailer selling slabs,
worked stone, and stone tiles from 14 countries
–– Offers e-newsletter on new products, trends, and design tips to
consumers and the trade
»» Bedrosians
–– US tile and stone retailers with over 40 US locations – most in

California – but also in the midwest and east coast.

Top US trade associations (no particular order) for Portuguese SMEs’
networking are:
»» Natural Stone Council
–– January 2016 merger between the Marble Institute of America

and Building Stone Institute
–– Offering over 1900 members in 55 countries access to
regulatory advocacy, technical, training, and market resources,
and networking and professional development
»» National Stone, Sand, & Gravel Association
–– Advocating US quarries and stone manufacturers public policy

interests
–– Publishes Stone, Sand & Gravel REVIEW
»» American Institute of Architects
–– Since 1857, leading trade and certification association with over

300 state and local chapters
–– Provides educational, contractual, research, and advocacy
resources
»» National Building Granite Quarries Association Inc
–– Serves US granite producers and architecture professionals

–– Provides granite grade and classification certification and
specifications
»» American Society of Landscape Architects
–– Founded in 1899, now more than more than 15,000 members

and 100 chapters
–– Offers communication, education, advocacy, networking, and
trade resources primarily for residential and outdoor stone and
natural building.
Some of the top US trade shows that Portuguese companies may

be interested in attending are:
»» International Surface Event
–– Largest North American event serving the floorcovering,

stone & tile industries, comprised of the Surfaces, StonExpo /
Marmomacc Americas, and TileExpo shows in Las Vegas
–– January 17-20, 2017

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»» Kitchen & Bath Industry Show (KBIS)
–– Host 500+ leading brands in the kitchen and bath industry in
conjunction with the National Association of Home Builders’
International Builders’ Show (IBS) Design & Construction Week
in Orlando
–– January 10-12, 2017
»» Coverings
–– For 30 years, the largest tile and stone expo in North America
featuring free accredited seminars and networking with
over tens of thousands of distributors, retailers, fabricators,
contractors and installers, architectural and design
professionals, and builders and remodelers in Orlando
–– April 4-7, 2017.
Several companies interviewed said they attended trade shows,

including some of the above. Rather than being a forum for
selling / buying products, trade shows are opportunities to build
relationships, particularly off the show floor at social functions when
there is less pressure to buy and an environment for networking
and face-to-face, trust-building conversations. When asked how
they purchase new materials or acquire new supply, a US importer
and distributor said that they: “use trade shows to some degree but
we’re very loyal to our producers; we’ve been in business for a long
time now, and those relationships matter to us.”90
Beyond product sales, other objectives can be achieved at trade

shows, such as lead development, product positioning, attending
seminars, and building product or company awareness and
reputation. An importer and retailer that purchases mostly granite
and marble indicated that they: “don’t really like trade shows; we
use recommendations really. We hear about this producer, or see
some other place down the road has a good looking new product,
and we do a bit of searching.”91 Therefore, SMEs should see trade
shows as a platform to reach US suppliers who are in attendance
but also a select group that purchase based off product or company
reputation and word of mouth. Trade shows are also excellent
sources for information on US compliance and product launching,
and they help build relationships towards future sales. Additionally,
they are also opportunities to observe how competitors take
advantage of US trends.
It is also essential for SMEs to stay current with industry news

and trends so they can best respond to trends, dumping news,
and supply issues affecting the US building stone market, such
as domestic US production. Some92 of the industry’s leading
publications include:
92 Though not publications, SMEs should note popular sites such as Pinterest and other DIY
all in one design / e-commerce platforms, such as BuildDirect, profiled in Section 5.3b.

»» Stoneworld
»» Dimension Stone Design Manual
»» Building Stone Magazine
»» Masonry
»» Graniteland Natural Stone Magazine
»» Stone-ideas.com
Understanding of how competition responds to US trends is

essential in establishing a competitive advantage in the US.
This section argues that an insider’s perspective on how the

competition responds to US ornamental rocks trends is essential
in mastering the knowledge necessary to establish a competitive
advantage. At some junctures, the most effective mechanisms
for being competitive in supplying US demand is being import
compliant / export ready, understanding US distribution structure
and channels, differentiating products from the competition,
and developing clear product positioning and strategy. The
US ornamental rocks market is both vast – dominated by large
chains – and extremely open – through thousands of independent
businesses and trades people. As a result, it can be tempting
for producers to expend resources without building a long-
term, sustainable US market. It is, therefore, critical for SMEs to
understand US market structure, regulatory compliance, and
market trends for export investment to deliver consistent returns.
5.5 Conclusion
Global trade is currently in a precarious position. Increasing

protectionism in G20 markets, Brexit, and commodity and currency
fluctuations put Portuguese SMEs in a challenging position.
WTO Director-General Roberto Azevêdo believes 2016 will be
the fifth consecutive year with sluggish global trade growth, the
“weakest sustained level of trade growth for 30 years” (WTO 2016i).
Nonetheless, this report – and the WTO – has a positive outlook for
trade growth in 2017 and 2018, and using the contents of this report,
SMEs developing export strategies for the US market will be well
positioned for the more lucrative years ahead.
Section 5.2 highlighted the importance of SMEs’ ability to recognize

and prepare to supply future trends. SMEs’ export readiness will
be paramount in their ability to respond to trends and build
relationships with US suppliers. This can be accomplished a variety
of ways from dropshipping to working with large US chains to
independent businesses and the trade / specifiers.
Section 5.3 examined two trends affecting US building stone supply

and demand: the US construction and building industry recovery
and luxury on a budget / DIY. The analysis targeted ways SMEs can
seek to develop their target market in the US, as markets, supply,
demand, and regulations can vary by state or region. Most critically,
differentiating a target market or markets is key for SMEs, as one
US state has a GDP similar to another country (see Section 6.1).

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The scope of the US market can be intimidating, which is why the
section segmented the market (homeowners / renters; residential
/ commercial; industrial / institutional). SMEs will require targeted
marketing strategies and revisions of those strategies pending
developments.
Section 5.4 examined how Portugal’s competitors respond to US

trends by presenting top US ornamental rocks and associated
industries’ trade associations, trade shows, and publications. Using
these resources, SMEs’ competitors are able to gain a competitive
edge over other foreign suppliers. Being connected to a wide variety
of product and industry-specific resources helps exporters better
prepare to fill US supply needs.
The following section provides a summary of the report and

highlights where Portuguese SMEs have the greatest opportunities
to be competitive in the US market, noting the challenges that
mark the path ahead. The conclusion also provides benchmarking
information to enable SMEs to know when goals traverse market
access to market development and growth, where strategy
reassessment may be necessary. The conclusion also offers advice
for sustainable growth once SMEs become more established US
building stone producers.

Section 6:
Conclusion
6.1: Introduction
This report has analyzed, evaluated, and recommended strategies

for export development and growth in the US ornamental rocks
market. The report’s analysis of internal (US) competition (Section 2)
found overall growth across most building stone product categories,
although granite slabs has been in persistent decline. The best
opportune markets for Portuguese SMEs are in stone mosaic tiles,
marble slabs, and stone slabs. Overall, Portugal has performed best in
the US with stone slabs – holding 2.1% of the US market, equivalent
to Spain’s US market. Stone slabs is the only US product category
market where Portugal holds more 0.5% of the market in the last
year. Its competitiveness in some of these US markets, such as marble
slabs, has declined in recent years, but with varied market advantages
to leverage in establishing contact with US suppliers, SMEs can
contribute to increased Portuguese export competitiveness.
The majority of the top competitors in the US market are within

Europe – also Portugal’s main export destination and sources of
foreign direct investment – but Asian countries are also consistent
competitors. Improving Portugal’s competitiveness within Europe
and Asia would have a positive effect on its World Economic
Forum Competitiveness rating, as well as SMEs’ profitability. Key
competitors for Portugal in the US market are:
»» Peru, Other Asia, and Greece (building stone subsector)

»» France, Greece, and Germany (stone mosaic tiles product
category)
»» France, Indonesia, and Israel (marble slabs product category)
»» Germany, Greece, the Philippines, Switzerland, and the UK
(granite slabs product category)
»» Brazil and Spain (stone slabs product category).
Key strategies to improve internal competitiveness in the US market

include:
»» Leverage Portuguese export growth, volume, and consistency, in

addition to product quality and reputation
»» Determine competitive advantage(s) against key competitors and
build US partner search campaigns around these focal points,
endeavoring to keep pace with overall market growth rate
»» Monitoring developments in US and key competitors’ markets
through 2018, especially in granite slabs
»» Develop relationships and build industry contacts.

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By examining external, global and European competition (Section
3), the report uncovered the top global and European building
stone exporters (pg , ensure correct in final draft). The analysis
confirmed findings from Section 2.3 that China, India, and Turkey
are both US and global export leaders in building stone products.
Italy and Spain are also top global and European exporters. Greece,
Portugal, and Germany were, overall, third through fifth in the
European building materials markets.
Portugal outcompetes global trade leaders like the US and

Germany in the building stone market and is a top European
competitor in stone mosaic tiles and marble and stone slabs.
Portugal is more competitive on the global building stone subsector
market and the stone mosaic tiles and marble and granite slabs
product categories markets compared to its performance on the US
market. However, it is more competitive on the US market for stone
mosaic tiles than the global market. Portugal is a significant global
and European exporter of all building stone product categories.
This section’s objective was to translate complex “dialectical”

relationships that shape global, European, and US trade in building
stone. The strategy recommendations that emerged from this
section’s analysis confirm the findings from Section 2:
»» Develop targeted markets and marketing campaigns for the US

market based on assessments of competitive advantage against
key competitors in key markets (see above)
»» Ensure export levels stay consistent through quarterly monitoring
and setting sales targets to respond to declining export volume
»» Build relationships as part of a longer-term strategy to access and
grow in the US market, emphasizing Portugal’s increased global
competitiveness, product and origin recognition, product and
price competitiveness, product quality, availability, and customer
service
»» Use US competitiveness to increase global competitiveness and
vice versa
»» Capitalize on short and long-term successes in global markets
by highlighting where Portugal has outcompeted large global
competitors, such as Germany, in developing a US network.
Section 4 provided general guidance for SMEs in complying with

US legal regulations and guidance with particular focus on labeling
and packaging, tariffs, and distribution structure and channels.
US distribution research yielded interesting results, and the report
suggests that SMEs will face the greatest difficulty in the US market
not in compliance and regulation but in contacting potential
partners. Ornamental rocks products are able to be cross-marketed
to home decor businesses and professionals, as well as construction,
building, masonry, and landscaping businesses and professionals.
As such, the biggest challenge for SMEs will be locating their target
market and matching that market with less challenging modes
of entry into the US supply chain. This will be further complicated
because the US building stone market is composed of both large,
North American chain stores, franchise businesses with locations

scattered across the US, and other micro, small, and medium-sized
businesses that will be more difficult to locate from Portugal.
The US market is one of the most highly sought after markets for
global producers, and the best opportunities for market access
are in consistent, long-term relationship-building networks and
excellent customer and product servicing that includes effective
shipping and distribution, consistent and clear invoicing, focus
on quality, and competitive pricing. Potential partner searches
can be most economically directed through phone and email
correspondence. A more effective and still economical search
would be through a US broker or consultancy like those contracted
in this report or – slightly more costly – active engagement through
trade shows and industry publications. Above all, the report relayed
the scope of the US market, the challenges of compliance and
the importance of being export ready in 2017 before approaching
potential US partners.
Finally, the report offered an insider’s perspective of competition

and opportunities to supply US building stone demand (Section
5). Assessing US import demand within each of the four product
categories revealed that US demand for imported building stone
presents positive opportunities for SMEs. The section detailed SMEs’
advantages and challenges in particular markets, such as granite
and stone slabs, and highlighted what states are optimal for export
development, compared with states that have higher volumes of
domestic production. However, between reduced global trade
flows, building stone substitution, and prevalence of cheaper, lower
grades of certain building stone products, Portuguese SMEs will find
opportunities for developing sustainable strategies in the US market
if they are clever and perceptive in growing their export market.
To succeed in the US, SMEs must have:
»» Quality products with competitive prices and accurate grade

labeling and marketing
»» Clear understandings of US regulations and compliance
»» A target market (at the state or regional level) supported by a
precise understanding of how to access that target market from
the US distribution structure
»» Strong relationships and industry connections
»» Knowledge of US trends
»» Understanding of how to utilize resources to gain a competitive
edge, and
»» Possibly collaborative (export club), resourceful short and longer-
term strategies.
The simplest way to emphasize the scope and potential for

development and growth in the US market is to compare the GDP
of European countries to specific American states. From largest to
smallest:
»» the UK’s GDP is comparable to California;

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»» Italy’s GDP is equivalent to that of Texas;
»» Poland’s is similar to Virginia or Massachusetts;
»» Portugal’s GDP is most similar to Alabama or South Carolina;
»» Greece’s GDP is between South Carolina and Kentucky; and
»» the Czech Republic’s GDP is akin to Oklahoma’s (US Department
of Commerce 2015; World Bank 2016).
6.2 Portuguese SMEs’ Strengths and Challenges
In this final section, the report explores what it sees as Portugal’s

strengths and challenges in the US ornamental rocks market.
Intended to complement the insider’s perspective (Section 5), this
summary may give Portuguese SMEs critical insight into how to
market their products effectively in the US market. The summary
draws the report to a close by bringing together internal and
external competitiveness, legal regulations and compliance, and
supply and demand analysis.
Beginning with challenges, this final section examines:
»» critical resources SMEs need to increase their competitiveness

and respond to opportunities to supply US demand;
»» difficulty SMEs may encounter when building Portuguese product
visibility and recognition;
»» outcompeting European competitors who have been leveraging
their competitive advantage(s) and exporting in higher or more
consistent volumes in the US market for several years.
Following a discussion of these challenges, the report closes by

highlighting strengths that should motivate SMEs to seek access or
export growth to the US market via:
»» a comparison of Portuguese SMEs’ export potential to that of their

European (and/or global) competitors
»» assessment of competitive advantages that Portuguese SMEs
possess
»» underscoring how strategy-led growth can help SMEs work
towards recommendations from previous sections, such as:
»» consistent export volume
»» establishing brand recognition through marketing and
partnerships
»» building relationships and establishing a US presence / industry
network
»» utilizing momentum in other foreign markets and goodwill
towards US-EU trade relationships
»» building a model for sustainable export development and growth.
6.2a Challenges
The challenges Portuguese SMEs face in the US market are

significant; the report parties are similarly SMEs and know first-
hand the challenges of developing and growing in the dynamic
US business environment. The most well-developed export
development and growth strategies can easily go wrong. In Section
5.3, this report repeated the caveat that succeeding at any level of
business – in the US, Portugal, or globally – requires positioning to
be at the right place at the right time. This requires luck and skill,
and the best way to prevent unforeseen events from disrupting
export development strategies is to be resourceful and flexible.
The most critical resource SMEs require to succeed in the US

market will be financial; the report has repeated that import and
compliance costs pose market (tariff and non-tariff) barriers to
exporters but particularly SMEs. A good anecdote to help SMEs
realize the financial burden of growing their export market in the
US is looking back at the US market around or before 1995. While
tariff barriers and technology were more burdensome to foreign
producers looking to access the US market, attending a few trade
shows, product sampling, and short-term relationship-building
were simple keys to success.
Quite simply, there were less (capable) foreign producers on the US

market at this time. Globalization has lowered tariff and technology
barriers, but it has also increased competition in a manner that puts
SMEs at a distinct disadvantage. A small US quarry that opened in
2002 highlighted that his business has been affected by increased
foreign competition.
We’ve definitely seen foreign companies having an effect in the

market. There’s more marble and granite out there in the market
now as more countries are increasing production and exporting it
to the US. China and India are putting some good stuff out there,
and pretty cheap compared to what you see here.93
Collaboration among SMEs is also a second line of defense should

Portuguese SMEs be initially or ultimately unsuccessful in their
endeavors to enhance their financial resources. Establishing a US
network, following dynamic trends, supplying diverse product
needs in the US, building relationships, and employing a market
consultancy, broker, or export monitoring specialist, are all expensive
and complex tasks for a single small or medium-sized business.
The report realizes that Portuguese SMEs are in competition with

each other, but collaboration demonstrates a SME’s ability to “swim
within a school of fish” rather than go it alone, which can make
export development even more challenging – reinventing the wheel
rather than pooling collective resources. Establishing an export club
would not only demonstrate to potential investors and funding
sources that SMEs can think creatively about how to grow their
businesses, but also that they are capable of cooperating in the
service of a shared goal: export development and growth across the
Portuguese and European ornamental rocks industry.

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Additionally, if SMEs target market lies with importers, distributors,
or the larger US suppliers, such as some of the North American
chain stores reviewed in Sections 4 and 5, an export club is an
effective way to present a wider product catalogue – along with
building the “Made In Portugal” brand, discussed further below.
Importing and distributing building stone slabs is expensive,
and shipping such heavy items on rough sea voyages may mean
insuring products before they arrive at port. Offering a wider array
of quality and competitive products to importers, distributors, and
large chain stores through development of an export club may be a
resourceful option for SMEs’ export development.
US trade associations that work with foreign producers may provide

supplementary resources to SMEs, particularly resources that
benefit the industry as a whole.
The Natural Stone Council described a program that they tried

to approve recently that would help both foreign and domestic
ornamental rocks producers.
What we’d like to see is a check off program; we almost got it

through… It’s a self-imposed industry tax, and that money is used
for marketing and research. The US agricultural industry has done
this really well with their “Got Milk”, “Beef: It’s What’s For Dinner”,
or “Pork: the Other White Meat” advertising. It helps the industry
as a whole, and we proposed it to be levied by area; I forgot the
exact contribution, something like a couple of cents per square
meter. There’s no truly fair way to do it because you’ll always have
a free rider problem – the people who don’t want to pay but reap
the benefits of industry marketing. You also have the problem
that it’s not product or grade-specific. That square meter could be
worth $50 or several thousand dollars, depending on what it is.
As far as the people who do high volume of product production,
those products would be in the lower end, around $50 to $200
per square meter, and the people who do higher quality / lower
volumes, you’ve got to balance both contributions and benefits,
which proved a lot more difficult. We had an easier time getting
importers to account for the program than the domestic producers
because a lot of the domestic producers’ products go overseas, and
so a US checklist program wouldn’t really help them too much. The
industry is changing, but it’s changing slowly.94
Portuguese resources like the AEP-Chamber of Commerce and

Industry of Porto and AICEP can also help SMEs better understand
the US market and competitiveness and facilitate business-to-
business exchanges. Financial support for trade liberalization is
the most critical resource that will help SMEs juggle the many
elements that contribute to coherent and cogent export strategies,
and for the first time in a long time, this issue is starting to draw the
attention of major institutions with the power to assist SMEs.

Trade and SME financing are now top priorities for the WTO,
particularly after the annual WTO Public Forum’s focus on inclusive
trade. The lack of positive opportunities for SMEs is affecting trade,
economic development, and sustainability. Though Portugal has
made great headways in meeting the terms of their IMF and EU
economic and financial readjustment deals, Portuguese SMEs
are unlikely to receive any further financial assistance from the
European Commission (European Commission 2016). SMEs can
look for loans to finance their export development, but Portuguese
banks are unlikely have resources or lending capability following
the announcement of suspension of EU Structural and Investment
Funds. Even if Portuguese or foreign banks could offer financing for
SME trade development, banks often require resources that SMEs
lack to guarantee loans.
The International Trade Centre – an institution that ensures coherence

between the WTO and the United Nations’ trade and economic
development agencies – published How to Access Trade Finance: A
Guide for Exporting SMEs in 2009, and it remains a vital source for
SMEs engaged in international trade. The guide opens by conceding
that banks are no longer a viable source of financing for SMEs before
providing information on other financial instruments that may be
better suited to SMEs’ needs, including application advice.
In applying for other sources of trade financing, SMEs may find it

beneficial to highlight Portugal’s strong track record of satisfied
foreign direct investment (FDI) customers. “FDI, in net terms,
registered an amount close to €5.4B in 2015, [down] 5.2% in relation
to 2014. The highest value in the last five years was registered in
2012, when FDI reached €6.9B and in 2014 with €5.7B” (AICEP 2015:
8). Portugal’s top sources of FDI in 2105 were the Netherlands and
Spain (with 24.9% and 22.6% of the total respectively), Luxembourg
(18.5%), the UK, and France (7.3% and 4.9% respectively). FDI from
non-European countries reached 11.8% of total FDI in 2015, and key
contributors were Brazil (2.3%), Angola, Switzerland and the US
(with 1.6% each) and China (1.2%) (AICEP 2015).
A second challenge Portuguese SMEs face in developing or growing

in the US ornamental rocks market is building product, brand, or
country recognition and increasing Portuguese products’ visibility.
Across interviews, the report parties did not find a strong visibility
and awareness of Portuguese building stone on the US market.
“We’d have no problems buying from Portugal. We don’t see much
come through but we’re always open to new stone.”95 US suppliers
seemed to be aware of Portuguese ornamental rock quality, but
they expressed that it was not strongly represented on the US
market. “We have seen Portuguese products, perhaps in the exotic
rock section, but not that much.”96
Visibility and Portuguese product recognition can be established

through increased export volume, in which SMEs play a critical
role. As revealed in interviews, some importers, distributors, and / or

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retailers have preferred sources for particular products, be that US
limestone or Italian marble, and this seemed to be linked to export
volume. “Spain a little and much more Italy, these countries enjoy
a good reputation on our market because of their product history.
They’ve sent so much product over the last century.”97
Those more open to alternative sources find new products in various

ways, such as through existing relationships, online research, or
trade shows. For example, a US ornamental rocks importer and
distributor offered that they find new suppliers when they: “go
to shows, but we don’t do a lot of business at the show. We deal
more so directly with vendors, and that’s how we conduct existing
and new business.”98 A strong US presence may ease burdens US
suppliers have in doing business in Portugal, whether the presence
is a US-based representative, US trade office, or consistent trade
show attendance with an extended period in the US to conduct
follow-up relationship-building.
A large importer and retailer highlighted that the follow up face-

to-face relationship-building is key to his new product purchasing,
and the country representatives he mentions were ones that
were increasingly competitive on the US building stone market –
demonstrating invaluable knowledge about sustainable US market
access and growth.
We do go to trade shows, but most of the producers come to us.

Two to three producers a week come through our doors. A lot of
representatives of the quarries are coming here looking to sell their
stone. We get international representatives from China here every
few weeks, Brazil reps once a week, and we even see guys from
Saudi Arabia coming in. It’s key for the potential producers who
want to do business with us to talk to us and be physically visible.99
Once presence and product visibility have been established, the

goal is to improve Portuguese product recognition. The report
parties inquired about US suppliers’ perspectives of Portuguese
ornamental rocks products, and the responses were highly similar.
“Portugal’s product reputation is kind of in the lukewarm range.
People in stone industry wouldn’t say buyer beware about building
stone from Portugal, but we wouldn’t consider them the top of the
industry.”100 SMEs must understand that with the vast scope of the
US market, product quality and price must be highly competitive,
offering how SMEs’ products can improve US suppliers’ efficiency
and profitability.
The objective is to place Portuguese tiles, granite, marble, and stone

in the front of US consumers’ minds, and this can be achieved
through targeted marketing, as well as an e-commerce site that

also offers home remodeling, product recommendation, and
buying guide advice. Recall the recent proliferation and success of
quartz and quartzite – a highly produced Portuguese building stone
product – on the US market. Uniqueness, presence and trust are key
for the US consumer, which is why product reviews are so highly
regarded in this market. “My advice would be to get recognized as
a quality and reliable vendor upfront, establish that reputation in
years one and two; worry more about profits in years three, four, and
five. Second chances are harder won than starting out with a focus
on quality and service.”101
US consultancy and marketing firms will be infinitely more

experienced in reaching US consumers than Portuguese marketing
firms, although the latter may offer SMES higher savings.
Networking with US businesses and firms will also expose SMEs
to a much larger customer base, including potential partners.
Networking should be viewed as a cost-effective strategy for short
and longer-term sales development and growth rather than
something a SME must do. It is relationship-building, not sales-
generation, in the short-term, but in the long-term, networking is
key to sustainability. For example, gaining access to US distributors
may not result in direct sales, but SMEs may be able to network
their way into accessing highly-specialized trade associations or
other resources that can assist with large-scale challenges, such as
supply chain optimization and other operationalization.
After establishing a presence, the most important variable in

building brand and product recognition is consistency, in both
export volume and continued presence. Having contacted over
100 US importers, distributors, retailers, trade associations, and the
trade / specifiers, the report can attest that SMEs must demonstrate
tenacity. In this experience, the report parties learned that email is
not the most effective way to make contact with potential partners
in the US, although contacting US businesses may lead SMEs to
believe as such. Phone contact is better; however, often companies
have a series of automated menus and messages or gatekeepers,
some of which simply end in an unknown voicemail box. Person-to-
person contact is the most advisable method for SMEs to grow their
exports in the US, but gaining access is easier said than done.
SMEs should ensure they are fully informed about all their products’
particulars as well as how their products fit in the specific distribution
structure and business model for email, phone, or face-to-face
meetings with US suppliers. A trade association representative
offered that SMEs: “biggest hurdle is understanding US standards
and increasing familiarity with the American National Standards
Institute (ANSI), as opposed to other (European) oversight standards.
They need to understand how things are controlled.”102 As standards
often influence product price, synchronicity with US standards will
help SMEs develop their products’ price points.
In developing a competitive price, the report recommends SMEs
101 Ibid.
102 Ibid.

• 115
explore their competitors’ (listed in Section 6.1) retail prices and work
backwards, ensuring prices still cover import and production costs.
The report would advise first that every time a product changes
hands in the US supply line, a cost is added. Second, SMEs should
develop three tiers of pricing options for approaching US suppliers
– their preferred price, their negotiable price, and their bottom line
price. SMEs should recall that the report has suggested that to be
competitive in price in some subsectors, the bottom line price may
help them gain market entry, but a plan to increase prices in one to
two years could help SMEs sustain short-term losses encountered
through this strategy.
In regards to export volume, the goal must be consistency and a

good match with the US supplier. Portugal was outcompeted by
competitors because it has, in several subsectors, failed to export in
consistent volumes. For example, Portugal was almost a top US marble
slabs exporting country, but in recent years, export volume declined,
which negatively affected competitiveness. While this can be related to
demand, imported building stone demand is increasing overall in the
US, driven by consumers, and if Portuguese products are unavailable,
US consumers will simply replace it with a comparable product.
Consistent presence in the US can help ensure export levels remain as
consistent as possible despite sluggish trade growth.
A final challenge SMEs face in the US market is outcompeting their

European competitors. There are many facets of this challenge,
and the first is to secure funding from regional, European sources;
this may require SMEs to build relationships with Portuguese
representatives active in Brussels to advocate for their interests. A
second facet is that some of Portugal’s European competitors (such
as Bulgaria, Estonia, and Lithuania) have only recently joined the
EU. Various domestic conditions — such as low labor costs, taxation,
and momentum around development in the newly industrialized,
capitalist economies — have helped these countries to establish an
advantage in the US market that makes them more competitive
against high-volume exporting countries like Chile, compared to
Portuguese SMEs.
A third facet, the US may have FTAs or BITs with many of Portugal’s
competitors where market access and trade facilitation are better
funded and focused and tariffs are lower or non-existent. Within
Europe, the US has BITs with Albania, Bulgaria, Croatia, the Czech
Republic, Estonia, Georgia, Latvia, Lithuania, Moldova, Poland (two
BITs), Romania, Slovakia, and Ukraine. Some of these countries have
been Portuguese competition targets in Sections 2 and 3, and some
are Portugal’s overall (global) competitiveness targets. The majority
of the US’ preferential trading agreements are with its North,
Central, and South American partners and a few Asian and Asian-
Pacific nations.
Here, SMEs should focus on understanding their competitive

advantage through high-quality and high-value products that
are typically not available in this market. For example, how can
Portuguese granite achieve the same or similar reputation on
the US market as it has in Angola. How can Portuguese marble
be positioned to outcompete its Greek equivalent knowing that

Portuguese marble was sent to Rome, Athens, and other ancient
cities to construct what are now famous historical sites? Upon
being asked if a US importer and distributor would be interested
in Portuguese ornamental rocks, the report parties learned: “We
don’t import a lot of Portuguese granite; if the price is right, we
would definitely be interested, however… If they’re coming up with
the right prices, we’d be happy to hear from them. We import from
around the world and could easily work with them.”103
AICEP (2016) reported that Portuguese goods and services exports

to the US have doubled in the last five years because of bilateral
relations and export development cooperation. However, with no
forward progress or foreseeable conclusion to TTIP, many export
countries receive preferential treatment or investment priority
over Portugal. SMEs must mobilize all aforementioned resources
and strategies to outcompete foreign producers in the US market,
including networking, consistent export volume, and combining
short and long-term strategies for export development. Many
exporters with FTAs or BITs will have an already established and
consistent export presence in the US building stone market,
compounding the challenge.
6.2b Strengths
Confronting these challenges – rather than attempting to avoid
them – is instrumental to SMEs’ success, as is leveraging strengths.
When comparing Portuguese SMEs’ export potential to that of
their European or global competitors, it’s important to consider
comparative advantage. A comparative (economic) advantage is
the ability of one country or company to produce a product more
efficiently, using fewer resources, given all the other products that it
could produce. Comparative advantage is one variable in a complex
formula that country and company leaders use to assess costs and
benefits of production. At the global trade level, this is how trade
deficits / surpluses are configured, and why it is good business for a
country to import products that they also produce for domestic and
foreign markets – essential in the success of large trading nations,
such as the US, Germany, and China.
Obvious reasons for utilizing comparative advantage are to supply

diverse needs, cope with dynamic markets, negotiate BITs and
FTAs (lower import costs), and respond to consumer demands and
preferences. Several US companies contacted for this report simply
said they were not interested in working with new producers, and
if they were, they would locate the products themselves using in-
house resources. The key will be to build presence in their in-house
resource list.
Foremost, many US companies prefer to work with SMEs, and

the Natural Stone Council advised that US kitchen countertop
businesses often prefer to work with SMEs because they are
typically smaller businesses themselves.104 Additionally, a large

• 117
US building stone importer and retailer said: “we’re interested in
getting in contact with and working with small producers; we’d
love to get in touch with your SMEs.”105 SMEs can be comparatively
effective at delivering small or urgent orders, for example to interior
designers who often deal with substantial lead times in building
construction or home remodeling. One trade association executive
provides extensive advice on this subject.
A lot of times designers find beautiful things in catalogues... but

the producers wait until they have a big order to [send] it. It’s
especially a big problem with importers… Being clear and upfront
with designers is advice that’s important for helping Portuguese
producers. A lot of time producers or importers will give shorter
estimates than what is possible. They said what they needed
to make the sale, but doing this sort of thing will ensure it’s a
one-time sale and not a recurring relationship. If Portuguese
producers can get products to designers within a short amount
of time, be accurate in their estimates, and be honest and
communicative, they’ll have an edge.106
Portugal is nine days by sea to Newark, New Jersey – one of the

US’ busiest ports – and 20 to 40 days by sea to Houston, Texas,
another very large port. Networking to discern retailers or importers’
distribution network could place SMEs in an advantageous position
to reduce lead times. The report parties interviewed a US building
stone company that stopped importing foreign stone simply
because of long wait times for products.
Our main goal is easy access and very fast delivery; it’s our biggest
factor… We used to import some of our other material that are
made in India and Turkey, but we found it too messy and easier to
work with domestic producers… It takes a while to work with the
shipping. There are a lot of headaches with shipping, and our time
is very important to us. If we buy locally, we get good prices, and it’s
already through customs. There’s less time and less hassle. 107
The importer, distributor, and retailer referenced above, however,

replied that they would be interested in Portuguese products, as
the distance is not as significant compared to India – if product
price was competitive. Portuguese SMEs could demonstrate
reliability to US suppliers by sending an initial order of products to
ensure quick availability and a larger supply immediately following.
Portuguese SMEs also have access to a national shift towards more
advanced and technologically innovative modes of production,
supply, and exporting, which hold potential comparative
advantages. Additionally, the costs of exporting heavy materials is
a much larger concern for distant exporters that are currently top
competitors on the US market like China or India, giving Portugal
an enhanced comparative advantage.

Portugal also avoids paying tax to use the Panama Canal in
accessing east coast US ports, which is a consideration for US
suppliers in selecting new products. Portugal’s trade infrastructure
(road, rail, air, sea, and broadband networks) is also already well
established, and this existing infrastructure, combined with high
levels of English language proficiency, will contribute to further
comparative advantages for Portuguese SMEs (AICEP 2013).
Portugal has established thriving European and export industries;
the comparative advantage is in understanding the extent to which
these export industries can be expanded to the US.
Second, competitive advantage, as opposed to comparative, is

the ability of a country or company to produce products more
effectively by offering better value, quality, and service; the goal is
to establish competitive advantage that is sustainable. Portuguese
SMEs can offer added value by being more competitive on cost.
From stone mosaic tiles to more general industry context, this
report has offered competitive pricing recommendations that
will help SMEs in determining range of prices for US supplier
negotiations, as the US supply line has many added costs.
SMEs should carefully understand what US importers and

distributors are paying for their products. This assessment has two
core benefits; the first is that products should not be offered on the
US market until prices are at the very least comparable to products
— lower or higher grades — currently on the market. The second
is that this assessment will also help SMEs determine if there is
greater competitive value in hiring US consultancies or brokers,
investing in a trade association membership (and at what level), or
establishing a US presence should they find themselves priced out
of the US market.
A strategy that builds on the cost-reducing distribution concept

of dropshipping, discussed in Section 4.4, that could help SMEs
get their products into large chain stores or with popular on-trend
e-commerce retailers would be to offer US retailers discounts
for special orders and / or US holiday sales. This would allow US
suppliers to introduce Portuguese products into their catalogue
without committing to a substantial order and is a form of
relationship building “trial by fire”.
Home Depot, offers customers up to 15% discounts on catalogued

products that are not available in store, making a special order that
is entirely based on consumer demand. The only consideration is
that SMEs must ensure there is almost no lead time, which requires
shipping via air cargo and complete export readiness. If products
are detained or delayed at the US point-of-entry, it is likely to
sour the relationship with the large chain store; however, many of
these large North American retailers are themselves importers and
distributors, and excellent communication with them can reduce or
eliminate delays.
In addition to the resources highlighted in Section 6.2a, SMEs

should also be savvy in the acquisition of financial resources,
including grants and opportunities to participate in nationally
and EU-funded research. For example, several universities and

• 119
research institutions receive European Research Council funding
to investigate barriers to SME growth, and the WTO and United
Nations are focusing on SMEs as part of their new agendas.
Some newly developed SMEs may find that they are eligible
for Portuguese or EU start-up investment tax credits, local tax
and stamp duty exemptions, or research and development
opportunities funded by tax. Participation in seminars and
workshops, such as those held by the report parties and trade
associations, are also cost-effective investments for SMEs.
The combination of quality ornamental rocks products at

comparatively low prices has helped Portuguese companies succeed
in the past. Flexible labor laws, high education standards, a highly
skilled labor force, low minimum wages, and existing US partnerships
in business and research all create advantages that SMEs can leverage
to increase their US market access. SMEs also tend to have more
flexibility in supplying demand with the ability to do customized
orders, tailor products to consumer demands, and negotiate on price.
They can replicate successes they and other larger companies have
had in the European and African markets to US markets.
SMEs can also devote resources to deep relationship-building leading

to a partnership with one US state or large company. Becoming the
supplier for a corporate building project that features picturesque
Portuguese stone mosaic tile is an effective way to establish a
competitive advantage and obtain free advertising. Supplying a small
state like Rhode Island with granite that is priced below those top
granite-producing states in the region (Vermont, New Hampshire,
Massachusetts, and Maine) is also a competitive strategy.
As shown in Section 2.3c, Portugal is close to becoming a top US

marble slabs exporting country, and by maintaining or fractionally
increasing its US exports, it could outcompete Other Asian and
Egypt. This would foster Portugal’s ability to rise to a top ten position
and increase US and global competitiveness, and understanding
export development on this level, SMEs better comprehend how
essential their export development is to continued Portuguese
economic recovery. The resulting millions in export value will benefit
each producer able to increase Portugal’s US market share.
Third, Portuguese SMEs can overcome the difficulty of

implementing the recommendations in this report by
“operationalizing” – dividing a complex process into actionable
steps. Strategy becomes a process of development, assessment,
revision, analysis, and achievement. For example, the process of
exporting in consistent volumes involves:
1. gathering subsector or product category export volume data and

analyzing five to ten year trends108
2. conducting a series of statistical analyses to determine average
export volume109
108 The report does not advise analyzing trends beyond 2008, as the export volume and
trade data will not be consistent with continued post-recession economic patterns and
trade flows.
109 The report would recommend conducting a “box and whisker plot” analysis to see

3. assessing how competitive advantage could help improve export
volume consistency110
4. using forecasting models to predict irregularities in export volume,
and applying predictive modeling to production cycles to fill
supply gaps before they present a problem; this not only ensures
that export volumes stay consistent, but also establishes SMEs as
industry leaders
5. applying predictive modeling to benchmark consistent export
volume to know when to launch new US relationship building
campaigns to advance from development to growth.
As indicated in the fifth step, relationships can be built through

campaigns, and it is essential that campaigns target the most
appropriate importers, distributors, retailers, trade associations,
trades people, and states or regions for SMEs’ specific building
stone products. Through operationalization, challenges appear
more manageable, and markets that seemed unattainable to
SMEs open up via a series of revisable step-by-step actions. With
limited exception, all export businesses began as SMEs, and the
challenges presented in Section 6.2a are not unique to Portugal
or the ornamental stone industry. They have been overcome in the
past and can be overcome again, even in the world’s largest single-
nation import market.
Fourth, SMEs can become large exporters by capitalizing on

momentum in other foreign markets. Stone and glass – the sector
that houses building stone – is one of Portugal’s fastest growing
export sectors, and in large part, the success of Portuguese building
stone can be witnessed in Portugal’s export volume in high
consumption European, African, and Latin American countries,
such as France, Germany, the UK, Angola, and Brazil. SMEs should
also capitalize on their success with these top export destinations
when approaching US companies, as knowledge of Portuguese
innovation, product quality, and legacy in global trade may not
be as prevalent in the US as it is in western Europe. However,
knowledge of Italian and French building stone production and
quality is common in the US. SMEs should embrace Americans’
preferences for these European exporters’ quality and reliability
while exploiting their lack of differentiation among European
exporters. Portuguese SMEs may find, for example, that associating
their products with those of Italy, rather than Greece, provides
better leads in the US. “We don’t do huge volumes for Greek stone;
it’s not a high volume market here for them.”111
In making presentations at trade shows or in face-to-face sales calls

or networking events, Portuguese SMEs should introduce their
companies and products with images and stories about large-scale
successes of the Portuguese ornamental rocks industry. The US
means, medians, and outliers of export volume.
110 The report suggests a highly complex “multivariate regression analysis” to indicate what
variables likely contributed to irregular export volume and to incorporate supply and value
chain analyses.

• 121
is a large market, and first impressions are essential; SMEs must
make a lasting impression on US buyers and decision makers. Any
association that SMEs can make with these large-scale successes
and their products – such as the building stone used in the
Rockefeller Center or stone mosaic tiles used in Martin Place in
Sydney or the Fridhemsplan Metro Station in Stockholm, where
appropriate – should be heavily featured (AICEP 2013).
On the contrary, SMEs should also know how and when to

distinguish their products to demonstrate superiority — for example,
how Portuguese building stone is perceived as superior in western
Europe and other parts of the world. As many US importers,
distributors, and retailers emphasized – and this is particularly true
for US chain retailers and hotels that emphasize environmental and
labor-consciousness – a product with a good story almost always
sells in the US. This is why marketing and branding is essential to
SMEs looking to gain US market access. As a Florida importer and
retailer offered:
“We have seen Portuguese building stone – marble and granite

mostly; if that is what is hot and what people want then we’ll put it
in our stores.”112
In Section 2.3, the report highlighted that the US granite market has
declined, and a possible explanation highlighted increasing use of
cheaper materials, such as quartz and quartzite, which is heavily
produced in the US. In an interview with a retailer in the state of
Maine, the report parties learned how effective marketing can create
US demand where there was no market previously. As revealed
below, this has been the case with quartz, and some US suppliers,
in turn, have developed counter-marketing in an effort to reshape
consumer preferences that effective quartz marketing has yielded.
We do steer some people towards the quartz products since

it’s made to mimic marble and granite. We’re more granite
oriented, however, and we like it better; some people really like
quartz. Something unique about quartz is that there seems to
be a lot of marketing behind it. A lot of big companies back the
production of quartz. Zodiac is made by Dupont, and they pour
money into marketing the product. In our showroom, we have a
quartz countertop that has been put through hell with scratches
and normal weather because we wanted to show what can
happen to an inferior countertop. You can’t repair quartz, but
you can repair granite.113
The influx of quartz due to effective marketing was also confirmed

by a Colorado granite quarry. “There are is a lot of quartz and
quartzite out there; it’s definitively taking a huge chunk out of that
market… we can’t match their pricing. Mostly, people buy granite
because they want granite. It’s an expensive rock to cut, polish, and

ship, but it also adds value.”114 The role of marketing in promoting
quartz and quartzite was further confirmed by a large US importer
and retailer, and he reveals that another key to effective marketing
of Portuguese building stone on the US market is through
educational awareness – the sort that could be fostered through the
National Stone Council’s check off program discussed above.
In our store, 20-25% of people walking through the door are

looking for specific materials. Marketing plays a big role, as does
the understanding people have about stone. They’re buying the
quartz or wanting to buy the quartz because they think it’s less
maintenance - easier for family living with kids spilling drinks
on it, for example. But it’s not necessarily true that quartz is less
maintenance; it’s a matter of education. So we spend a lot of time
educating our consumers.115
Finally, SMEs are also encouraged to utilize work that local and
national business chambers and trade associations have done to
support Portuguese development and growth. For instance:
»» Portugal is better: 3-minute video showcasing Portugal’s strengths

in technology, infrastructure, investment, trade, product quality,
quality of life, and business opportunity
»» Choose Portugal: 6-minute video about Portuguese natural and
human resources and continued capacity for development and
growth in various sectors
»» Invest in Portugal: 35-page PDF featuring Portugal’s competitive
advantages, including information on correction of structural
imbalances and implementation of reforms and support services
»» Web summit 2016: conference event that featured 21 sector
summit meetings, 500,000 international guests that gained
global press, including coverage by Bloomberg, the New York
Times, CNBC, and the Guardian and participation by Google,
Apple, Microsoft, IBM, Cisco, Tesla and SpaceX.
Finally, Portuguese SMEs have many report recommendations,

resources, and strengths that contribute towards building a model
for sustainable development and growth. To build a suitable
and sustainable model, this report suggests that SMEs examine
conditions that led to the following:
»» Portugal’s World Economic Forum’s Competitiveness Index

Rankings:
–– 2015-2016: 38th
–– 2014-2015: 36th
–– 2013-2014: 51st
–– 2012-2013: 49th
–– 2011-2012: 45th

• 123
–– 2010-2011 46th.
»» Portugal’s exports outcompeting:
–– Croatia
–– Finland
–– Ireland
–– Belgium-Luxemburg.
»» Portuguese exports being outcompeted by:
–– Bulgaria
–– Estonia
–– Latvia
–– Lithuania
–– Slovakia.
»» Portugal’s exports being similar to:
–– The Czech Republic

–– Greece
–– Poland
–– The UK.
The core competitiveness issues that SMEs should consider in

building this model are:
»» Ensuring export volume consistency to improve competitiveness

»» Understanding why:
–– Countries with considerably lower GDPs outcompete Portugal;

Portugal is consistently outcompeted by countries with an
average GDP of $45.3B;
–– In consideration of the above: Portugal, with $199B GDP,
outcompetes countries with an average GDP of $143.5B; and
–– Portugal exports in similar volumes to countries with a much
higher average GDP of $925.4B (IMF 2015).
This report has taken an in-depth examination to Portuguese

SMEs’ opportunities for export development on the US building
stone and ornamental rocks and has found excellent prospects.
The projections for SMEs that are able to quickly become export
ready, develop sustainable relationships with US suppliers, and offer
quality products at competitive prices while also giving consistent
consumer and product service are overwhelmingly positive for
business growth. SMEs’ sustainable US export development will
not only serve their own interests but will also enhance Portuguese
competitiveness and GDP. In turn, Portuguese export levels will
continue to rise rapidly to pre-2008 levels, demonstrating the
extensive role SMEs play in Portugal’s continued economic recovery

and independence.

• 125
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THE US MARKET FOR ORNAMENTAL

ROCKS AND OPPORTUNITIES

Produced by Marq Consulting Group and CH Academy

THE US MARKET FOR ORNAMENTAL ROCKS

4 • USA NEXT CHALLENGE

THE US MARKET FOR ORNAMENTAL ROCKS

Section 1 introduces the report, report parties, and the report

Section 2 assesses US import competition, top exporting countries,

THE US MARKET FOR ORNAMENTAL ROCKS

Section 5 fosters an “insider’s perspective” of how

8 • USA NEXT CHALLENGE

THE US MARKET FOR ORNAMENTAL ROCKS

Figure 2.14 Top Ten US Marble Slabs Producers Volume Two: 3

THE US MARKET FOR ORNAMENTAL ROCKS

Figure 2.19 Top Ten US Granite Slabs Producers Volume Two: 6

12 • USA NEXT CHALLENGE

Table 2.2 - Inconsistencies Among Top Ten US Volume One: 27

Table 2.3 - Inconsistencies Among Portugal and Volume One: 28

Table 2.4 - Portugal’s Most Similar and Target Volume One: 31

Table 5.1 - Select Bedspreads Product Volume One: 65

Table 5.2 - Select Bedspreads Product Volume One: 67

Table 5.3 - Non-printed and Printed Cotton Bed Volume One: 69

Table 5.4 - Window Dressings Subsector and Volume One: 73

Table 5.5 - Iron Housewares Subsector and Volume One: 76

Table 5.6 - Aluminum and Copper Housewares Volume One: 78

THE US MARKET FOR ORNAMENTAL ROCKS

Table 5.8 - Porcelain Tableware US Import Volume One: 81

Table 5.9 - Ceramic Tableware US Import Volume One: 82

14 • USA NEXT CHALLENGE

1.1 Report Parties

As one of five market reports in the Next Challenge USA project,

1.2 Report Focus

This report reflects on general and specific issues that shape

THE US MARKET FOR ORNAMENTAL ROCKS

Painting a general economic landscape of Portugal’s current

Figure 1.1 – Portuguese Net Contributions to Real GDP Growth

Source: Statistics Portugal and Banco Portugal.

Next Challenge USA’s goal is to improve Portuguese export

16 • USA NEXT CHALLENGE

Portugal’s position within the top 50 most competitive export

»» limestone – from cream to reddish

Looking at a sample of Portuguese ornamental rocks exports, there

Total [US] imports of dimension stone3 increased in value to about

Targeted, sustainable ornamental rocks export strategies for the

2 “Consistently outcompetes” is measured by competition in all 4 or 5 years of the trend

THE US MARKET FOR ORNAMENTAL ROCKS

1.3 Report Methods

This report presents a market analysis for Portuguese SMEs looking

»» Internal (US) competition

The analysis of these factors produces an assessment of Portuguese

»» one-on-one interviews with US companies

These methods were selected based on their appropriateness

The OEC, a project conducted by the Massachusetts Institute

18 • USA NEXT CHALLENGE

An expansive discourse exists on varied methods for collecting

1.4 Report Subsectors and Product Categories

The report assesses export development and growth opportunities

THE US MARKET FOR ORNAMENTAL ROCKS

The report is structured by the five analytical factors presented in

Following the complete competition analysis, Section 4 transitions

20 • USA NEXT CHALLENGE

The US, the largest single-country import destination for goods

A frequency analysis is used to determine the top overall competitors.