If you go through the interview links in one of the interviews he clarifies this. The earlier idea when they setup the machines was to develop their own brand but post crisis when they were in trouble they changed the strategy to supply to local American guys.
2 Likes
Bullish commentary for Engineered Stone prospects by ASI Industries. The co has recently completed new Engineered Stone plant at Jaipur using Bretonstone technology.
- 50 units globally use Bretonstone technology
- Three such units in India -
- 1)) Pokarna / Quantra, 2) ASI Industries / Artizia and 3) ???
Source: https://www.bseindia.com/bseplus/AnnualReport/502015/65857502015.pdf
9 Likes
QUARTZ: I have met a few dealers of quartz in Bengaluru today. Just limited information may not add much as Pokarna gets revenue from exports.
BABA quartz and Johnson quartz are into the export market and sell in India also. Baba quartz quality is good. AGL brand is well known and many dealers commonly sell it.
Other quartz manufacturer are: Camrola and Kalinga
Around 65 colours of quartz are available.
One dealer who said they have their own manufacturing has quartz starting from Rs.240/sq ft but it was limited designs and not exotic.
Quartz used in kitchen countertops, table tops, reception areas, hotels,hospitals and marriage halls(not used for floor). Now essentially most builders, interior designers will recommend and use quartz for kitchen countertops. It doesn’t absorb moisture and is non-porous.
Quartz price starts from 300 to 1200 sq feet based on brand, colour, design and thickness. Thickness of quartz used in kitchen countertops is thicker (20mm)
Total cost for some products( including cutting,designing and installation in kitchen):
BABA quartz: 57sq ft slab will cost 10,000( 175 per sq ft)
Johnson 48sq ft slab will cost 8,000(160 per sq ft)
Some quartz price noticed:
Quartizo :?imported . Rs 750 /sq ft
AGL: Rs.430/sq ft
Baba: Rs.590/sq ft
Johnson: Rs.415/sq ft
AGL and Quaritzo colour and designs were good.
All dealers have heard the pokarna name and told that its highest standard quality for export. A dealer mentioned Pokarna can not run business in India by selling at Rs.2000/sq ft.
(I will try to meet few more, probably next week)
11 Likes
Incidently, Asian granito formed a JV with Camrola (at times referred as Camrolla in AR) in 2018 with 30 crs investment for 51%stake. Think this was divested in 2020.
Tarun
1 Like
Hi Spartan
Thanks for that initial scuttlebutt.
Let’s try and take this further w.r.t. what we can learn more about products from the 3 Indian Bretonstone players. And how differentiated the new Pokarna plant (supposed to be the most advanced anywhere in the world) is going to be versus Other Breton plants in India.
The next port of call could be this? As you are based in the same Bengaluru
2 Likes
Sure Donald Bhai. Will definitely try to visit.
Some notes from Caesarstone AR CY19
IKEA and Home Depot (HD)
First the most interesting point -
Caesarstone has exclusive license agreement with IKEA for US and Canada market from 2013-2019. There seems to be hints that exclusivity might go away in near future. Opportunity for Pokarna to tie up with IKEA global?
IKEA contribution to Caesarstone comes to around 10% of total revenue of ~500mn $ i.e. 50mn$. Caesarstone has US sales of ~250mn$ - so IKEA contribution comes to around 20% in US.
It looks like Caesarstone has E2E agreement with IKEA and then it supplies the slab and outsources the fabrication/installation. Assuming revenue is for E2E service, 50mn$ rather seems small.
Caesarstone introduced its product range in HD in Q4 CY19. The product is sold under its own brand vs. as private label in IKEA. In this case, fabrication/installation is handled by HD and not Caesarstone.
(How is HD → MSI/WilsonArt relationship ?)
RM SIDE STORY
Overall pretty good read on overall RM side story in Quartz business.
Quartz contributes 1/3rd, Polyester contributes 1/3rd of total RM costs. Pigments have smaller costs but there can be price fluctuations there as well. Titanium Dioxide is the principal white pigmentation agent.
Quartz
Polyester
Pigements
It looks like cost of RM for Caesarstone is around 40%, while that number is around 30% for Pokarna.
Caesarstone imports 61% of its Quartz RM from Turkey - 2 main companies - Mikroman (30%), Polat (19%). They have annual pricing contract framework.
Overall, it looks like availability of Quartz deposits is a big advantage for all Indian players as Israel, Brazil and China do not have this advantage. Further, with Pokarna’s increasing scale, they should get better deal in Quartz sourcing. Plus they have own Quartz quarries which are not explored yet.
Turkey
The EU countries are Belgium and Portugal - which supply Quartz to company. Compac - another contract manufacturing firm for WilsonArt, like Pokarna - is based out of Portugal (TODO - size/capacity of Compaq ?).
OTHER POINTS
- 60-70% business comes from home renovation & remodeling (R&R) market and 25-35% business comes from new construction.
- Silicosis is condition where lungs are scarred due to fine silica particles. Caesarstone is battling several lawsuits in Israel, Aus, US etc. in regarding to this. Any media attention for prolonged time - might result in either customer moving to a different surface or additional costs for compliance etc. Any incident with Pokarna might result in contract termination as 90% revenue is contracted.
- Caesarstone built 2 lines in Richmond Hills, Georgia at the cost of $135mn but capacity utilization remains low. Reasons mentioned are - lack of experienced workspace, inability to do engineering optimizations etc.
11 Likes
New and differentiated products / technologies by Breton -
Biolenic, Kreos, Bioquartz and Eterial are registered names of Breton
Bioquartz
- Has equal properties of natural quartz, and thus it can be used as a raw material to replace natural quartz or cristobalite granules and powders for the fabrication of Bretonstone
Kreos
- Can produce quartz slabs down to 5 mm thickness
- Substantial redesign of the quartz slabs manufacturing process
- Provides an additional color complexity in the pattern design
- Reduces the raw material and energy consumption
Eterial
- An ultralight panel, from 2 cm to 4 cm thick, with a mineral base and specific gravity of around half that of wood
- Sustainable logistics through weight reduction
- Satisfies the need for panels that combine very low weight with high strength, giving birth to a new generation of composite slabs
Biolenic
- To replace polyester resin with an innovative styrene-free organic binder mainly produced using vegetable resources
Gautam Jain gives some hint of Bioquartz and Kreos will be game changers here.
High probability Pokarna Hyderabad new plant will have some of these technologies.
13 Likes
Coffee with Gautam Chand Jain - 18 November 2020
Source: https://www.breton.it/en/engineered-stone/news/coffee-with-quantra
Quantra 2nd Bretonstone Hyderabad Plant
- The plant is 99% ready
- The mechanical and electronic parts are fine and Breton technicians just need to do the final - connectivity and software arrangement
- Hope to inaugurate our second Bretonstone plant by the end of November (?)
Design Trends
- Veined products are trending today but ours are different from everyone else (question for management to elaborate this)
- Believe in neutral colors and nude tones; white, creams and grey
- In relation to the design and look of the slabs, co avoid doing loud products
Future of Quartz industry
- Bioquartz® and Kreos® will be game changers (few more details in the previous post)
8 Likes
I tried speaking to some people who are tracking this industry. Few inputs:
-
Post the high anti-dumping duty on China, lots of Indian players are importing machines from China and doing quick installation. Basically whole setup of China is getting shifted to India quickly. And there are fantastic deals available.
-
Quartz is now a natural extension for stone/granite players and several cos are entering this and its very competitive.
Apart from this, in ref to above, Pacific Ind is listed and they did expansion in Quartz a couple of years back and claim to be having Breton technology. Surprisingly their capex cost is just about 50 Cr - https://www.screener.in/company/523483/consolidated/#balance-sheet materially lower than that for Pokarna. I was quite concerned to see this and later some people informed that the cost is lower as its not full breton technology…the quality is very different. Many people write breton technology but they have only breton polishing etc. So one needs to explore more about this.
11 Likes
Was trying to figure out the frequency of new design collections for an established player like Caeserstone. Doesn’t appear that daunting a task anymore, for Pokarna?
Here’s some more on the efficacy of the natural-stone-design-looks vs exotic attempts.
https://sec.report/Document/0001178913-15-000862/#i4
Update from the latest AR
We introduced our original product collection, Classico, in 1987, and today, this collection still generates more revenue than our other collections. Our Concetto and Supernatural collections are marketed as specialty high-end product collections. The Concetto product collection, launched in 2003, features engineered quartz surfaces with hand-incorporated semi-precious stones. In 2012, we launched our Supernatural collection, which offers designs inspired by natural stone and which are manufactured using proprietary technology. In 2018, we launched our new Metropolitan collection, inspired by the rough and unpolished textures found in industrial architecture. In 2020, we introduced Solaris, an innovative product category, which provides a luxurious outdoors collection of highly durable material proven to withstand the elements.
Here’s some data on R&D Spends/Capabilities
2 Likes
https://www.cosentino.com/news/dekton-slim-awarded-by-architectural-products-magazine/
December 18, 2020
Dekton® Slim has won Architectural Products magazine’s Product Innovator Awards in the Surface Materials category.
The judges commented on the product’s innovation specifically noting, “This product is gorgeous and opens the doors to innovation by others; it can easily be applied in unexpected ways.”
Following its 2019 launch, the 4mm Dekton Slim has received tremendous acclaim from A+D professionals, contractors and fabricators alike. At half the thickness of the thinnest slab the brand previously offered, Dekton Slim offers new solutions for projects demanding high-performance, while boasting easy installation in an array of applications: Furniture, cabinetry doors and drawers, backsplashes, wall cladding and more.
This recognition from Architectural Products further demonstrates Cosentino’s global leadership in the architecture and design communities and innovation in the surfacing industry.
Silestone is Consentinos Quartz-based brand (based on Breton)
Cosentino is the biggest producer of Bretonstone quartz in the world with 11 Breton engineered stone plants.
Dekton is made from a proprietary blend of natural quartz stone, porcelain, and glass. These raw materials are fused and compressed under high pressure to create a slab material that is very dense and compact.
@rupaniamit - for Scuttlebutt
60 available stores in Charlotte, NC, USA
2 Likes
@Donald - I saw Dekton’s latest Ultra Compact Quartz sample at Home Depot which was regular thickness stone. They didn’t have any samples for new Slim product, but I will keep it in mind and try to check it out on my next HD or Lowe’s visit.
Dekton claims that their Ultra Compact Quartz is UV rays resistant and scratch proof. Designer challenged me to take a screwdriver and make scratches on their Ultra Compact stone. I tried, but it indeed was scratch proof product. It’s high end stone for now and no other manufacturer had a product which was scratch proof like Dekton.
My understanding is that Dekton is Cosentino group’s high-end brand for non-Quartz stones. I believe it should also be using Breton but I am not sure. The other brand of Cosentino is Sileston which serves mid-range market.
2 Likes
Have set-up a call for this Friday with COO of one of the largest US stone wholesaler/importer, to get some industry insights. They have been in business for last 30 years with 8 warehouse and distribution locations mainly on east coast in the US. They have done business with Pokarna in the past so we will get feedback about Pokarna directly from someone who has dealt with them.
I know most in this group have been following Pokarna for last few years. I want to make sure everyone gets an opportunity to get their questions answered by an industry stakeholder and also to have a robust list of questions.
Once we have compiled list of questions posted, folks working on Pokarna idea will take it from there. We shall wordsmith/structure/sequence/prioritize for the management. Please share your questions.
Below is the first stab at list of questions that I have put-together:
Pokarna Related Questions:
- When was the last time you purchased stone from Pokarna Limited?
- What kind of stone did your company buy from Pokarna? Quartz or Granite?
- Why have you stopped buying stone from Pokarna?
- How has been your experience of doing business with Pokarna?
- What is your feedback about their Granite and Quartz stone quality designs? How would you rate their Quartz quality and designs with other peers?
Importer Related Questions:
- How is business post Covid? Is current business back to pre-Covid levels?
- How’s current Quartz demand scenario in the market?
- How’s current Quartz supply scenario in the market? Are you getting enough Quartz supply from your manufacturers? What is the existing turnaround time by your manufacturers?
- Were you buying Quartz from China before China got hit with ADD in 2019?
- How much of your business contribution comes from fabricators? And how much from builders for new construction?
- Are most of your manufactures’ using Breton lines for manufacturing Quartz? Does it matter to you that the Quartz you buy comes from Breton line on non-Breton line because end customer doesn’t care if product is manufactured on Breton line?
Quartz Product & General Industry Questions:
- How do you see Quartz demand for next 3-5 years? Can demand continue to grow at historical growth rate (> 25% CAGR) for next 5 years given Quartz is eating away Granite’s share in counter-top market?
- So far which segment has been the biggest consumer of Quartz after 2015? Is it residential renovation or New Construction market?
- Where is the bulk of demand going to come from in next 2-3 years? Is it from residential renovation or new construction demand?
- How much would high-end luxury segment contribute to overall Quartz market? Would it be safe to assume that rest of the contribution comes from mass mid-tier, low-tier segment?
- How difficult would it be for Quartz manufacturers to bypass distributors like you and work directly with big box stores like Lowe’s and Home Depot or fabricators?
Quartz Product Questions:
- How different is Quartz product quality that is made on Breton line compared to non-Breton line?
- Latest Quartz products developed by Breton – Kreos and Bioquartz – do you have feedback for them? How different are they from current products from Breton’s older lines?
- What’s your take on Cosentino’s Dekton UltraSlim Quartz product in 5mm size? Is that a game changer in Quartz market with that new smaller size?
- Does 5mm slim Quartz stone open up other new applications outside of countertops?
7 Likes
Just a few inputs from my end feel free to incorporate/reject:
a) What are the key factors that decide your choice of partner when buying Quart/Granite?
b) How does the purchase/decision making of an institutional guy differ from a retail guy?
c) Instead of direct questions which will anyways be answered I would rather ask how the entire quartz value chain work and from thereon ask the question as to why Pokarna can/can’t sell directly.
3 Likes
Yes. Initially it’s better to get the guy to talk openly, as there will be many more nuances than we are aware of/can think of. But always good to open with an interesting observation/fact - that shows that one has also done the research. if that gets the conversation going, and the guy talks, we let him keep talking, but gently steer the direction of the conversation from time to time towards untouched areas. In our experience, close-ended questions are better left for the last 15 minutes.
You may like to consider adding some open-ended questions from my side:
- Do you see newer players challenging the space occupied by Silestone, Caesarstone, Cambria in the next 2-3-5 years? Why or why not?
- What are the key success factors for any new player in increasing marketshare apart from a good product (Bretonstone) and competitive pricing?
- Can you cite recent examples of any newer player coming out with designs that matched and/or created market-leading/path-breaking categories. Or, this has been the preserve of the Consentinos and Cambrias of the world?
- How big do you think is the Sales/Potential of Counter-tops segment from IKEA, Home Depot, Lowe?
- Quartz slab prices are wholesale-only and confined to the supply chain between manufacturer and approved dealer/installers. What makes for the price differential between brands? Only if there’s enough brand-pull?
- How important for brand-push/pull is the communication to Architects, Interior Designers, Kitchen and Bath Remodelers, and End-Consumers from individual brands/manufacturers? Who is usually the primary sales Lead Influencer?
- How important are Trade-shows like KBIS, Coverings, C100 and Other such trade shows to generate the buzz for new players with a good product?
- How often have you found new designs categories creating breakthroughs? Or is it the same old studied path of natural colours and nude tones - creams, whites and grey? Everyone copies/comes out with slight variations of what has worked before, and avoid what hasn’t - like embedded semi-precious stone patterns
- Why haven’t we seen product extensions more often from decently established players - say Quartz sink players getting to Counter-tops and vice-versa? Aren’t they the same sales and distribution channels?
- How does the private-label Quartz industry work? Who are the biggest private label manufacturers for US brands? Which brands source private-label? How big can this market be for an efficient producer with the latest technology and competitive designs?
And a few closed-ended questions to add to your queue, if there is time
- What do you think of a player like Vicostone? They have reportedly gone upto a 7.5% marketshare in 2019 (in the absence of Chinese/Indian plays). Can they sustain at these levels or will cede back market share?
- Where do LG Viatera, Dupont Corian, Hanstone, and MSI Q sit in the pecking order of consumer preferences/Architect/Fabricator preferences versus a Quantra?
Other avenues for Scuttlebutt
- https://www.toulmincabinetry.com/
- @spartan https://tabquartz.com/about-us-tabquartz/ (Bangalore/Tamilnadu)
these guys also seem to be in the business for a long time, impressive designs, and updated at StoneWorld
5 Likes