A REPORT ON

EXPORT POTENTIAL OF GRANITES

(With Special Reference to Minerals and Metals Trading Corporation, Visakhapatnam)

Submitted to GITAM Institute of Foreign Trade and MMTC, Visakhapatnam

Date: 11th August 2000

P. Vijay Kumar

CONTENTS

CHAPTER – 1
State Trading
Rational of State Trading
Canalization of Imports & Exports
Need for the Study
Objectives of the Study
Methodology of the Study
Limitations of the Study

CHAPTER – 2
MMTC – Past, Present & Future

CHAPTER – 3
Granites
Granite Deposits in India
Table of Granite Deposits in India
Granites Belt in South India

CHAPTER – 4
Dimensional stone Granite – Indian Scenario
Granite Exports from India
Granite Exports from Visakhapatnam
Competition in the International Market
Problems faced by the Granite Industry in India
Future of the Granite Industry

SUGGESTIONS AND CONCLUSION

APPENDIX
List of varieties of Rough Granite Blocks
List of Granite Exports from India
List of Granite Exports from Visakhapatnam
List of Customers Abroad
List of Machinery Suppliers

1
 CHAPTER – 1

State Trading

T
here is no precise definition of state trading. There are various types of
government participation in foreign trade, all of which can be defined as state
trading. For example, in the centrally planned economies, the entire foreign
trade is nationalized and is, therefore, conducted directly by government
departments or government owned corporations. On the other hand, there are
countries, which are essentially free enterprise economies but export and import of
specific commodities are entrusted to Government Trading Organizations or
departments. For example, import of raw and unmanufactured tobacco is a state
monopoly in France, the government food agency of Japan regulates the import,
export and internal distribution of rice, wheat and barley, the Australian Wheat Board
has the exclusive rights for export of wheat. There are many such instances all over
the world. The third variety of state trading is found in mixed economies like India. In
India, the role of state trading is coming down with the coming up of liberalized
policies; private sector participation in gaining momentum day by day. The
government’s own trading corporations are, however, commercial entities registered
under the Companies Act and have the same rights and obligations as any private
sector firms. There are a number of such government trading organisations.

Rationale of State Trading

State Trading is restored for a number of reasons. In the centrally planned economies,
foreign trade as a matter of state policy is nationalised. Foreign trade in those
countries is to be conducted by state trading organisations because otherwise the
central planning mechanism will not function properly. In the developed free
enterprise economies, state trading sometimes is practiced as a source of revenue.
That is why it is found that trade in products like alcohol and tobacco is subject to
state monopoly. Similarly, trade in drugs and arms and ammunition is managed
through state bodies in the interest of health and national security of the country.
State trading in a number of agricultural products is quite common because state
intervention is necessary to avoid large fluctuations in the prices and preventing
deteriorating in the income of the agricultural producers.

State trading, however, is more commonly practiced in the developing

economies. The reason behind this are varied. First, such countries may not have
adequately developed private sector trading bodies, which can effectively participate
in international commercial, and also project the national interest.

Secondly, the private sector bodies, though possessing adequate trading

expertise, will be solely motivated by profit consideration. However, it may be
necessary from the national standpoint to promote new export items and cultivate
new export markets even by sustaining short-term losses. This can be done only by
governmental bodies having a development role and which are backed by the
government so that financial losses do not hamper the pursuit of long-term objectives.

2
 Thirdly, the centrally planned economies have emerged as important export
markets for a large number of developing countries including India. Since the foreign
trade of these countries is invariably conducted through state trading organisations,
it is found that government trading bodies are in a better position to negotiate with
their counterparties in the centrally planned economies.

Canalisation of Imports and Exports

State participation in imports is generally motivated by some other considerations.

These are:

1. To reap the advantages of bulk buying

2. To mop up any excess profit which the private sector firms might enjoy in
import business, and
3. To ensure proper internal distribution of the imported items and to maintain
stable domestic prices.

The basic objectives of state trading in exports are as follows:

1. It is observed in the case of certain products that there was secular decline in
the total value of exports. It was thought that a government trading
organisation would be able to reverse this trend by concerted action.
2. In some cases, the inner competition among the Indian exporters was resulting
in lower unit value realisation, entry of state trading organisation in the
international market through which exports were to be canalized could result
in the improvement of unit value realization.
3. Canalisation was also thought of as an instrument to improve the bargaining
power of Indian exporters.

The major state trading organisations in India are:

1. The State Trading Corporation Limited (STC)

2. The Projects and Equipment Corporation of India Limited (PEC)
3. The Minerals and Metals Trading Corporation Limited (MMTC)
4. The Mica Trading Corporation of India Limited (MITCO)
5. The Tea Trading Corporation of India (TTCI)
6. Spices Trading Corporation Limited

Need for the study

In the recent past, granite industry has established itself as a major earner of foreign
exchange for the country. The Indian granite has significant presence in the South
East Asian countries and also some European countries., but the potential of this
industry is much deeper than it is today.

The Indian granite industry has not performed to its expected levels because of
lack of information regarding availability of machinery, buyer’s abroad and suppliers
of raw blocks domestically. The study intends to explore the potential of granite

3
exports from India by finding out the suppliers in India and buyers abroad so as to
bridge the gap of unavailability for information.

Objectives of the Study

1. To find out the location of granites in India

2. To find out the varieties of granites available in different states
3. To find out the problems faced by the industry
4. To find out the foreign buyers of granites
5. To find out the machinery suppliers for granite processing units

Methodology of the Study

The sources from which the data was collected can be divided into two:
1. Primary sources
2. Secondary sources

1. Primary Sources: Data was collected by meeting persons directly and interviewing
them. Various department heads like the Dy. Director of A.P. Mines and Geology,
Visakhapatnam, H.O.D. of Department of Geology, Andhra Pradesh, were
contacted personally and their views were recorded for use in the study.

2. Secondary Sources: A major part of the information was collected from secondary
sources like books, journals and reports (such as the perspective plan of
Visakhapatnam Port Trust – 2020).

Limitations of the Study

1. A part of the information is not disclosed due to some organizational

constraints.
2. Latest information regarding exports were not available
3. Because of the vastness of the subject, an in-depth study was not possible.
Granite being a minor export component in the total array of Indian exports,
data relating to it was not available even with the concerned department.

4
 CHAPTER – 2

MMTC – Past, Present and Future

M
MTC, started in 1963, as a small canalizing agency for minerals and metals.
Today, it is amongst the first to be awarded “The Golden Super Star Trading
House” status in India and stands as a pre-eminent corporate entity with an
annual turnover of about US $ 1.2 billion.

The company’s diverse trade activities encompass third country trade, joint ventures,
link deals, etc., all of which are modern day foals of international trading.

Its vast international trade network, which includes a wholly owned international
subsidiary in Singapore, as well as two international offices in Tokyo & Dubai, spans
more than 85 countries in Asia, Europe, Africa, Oceania and America, giving MMTC a
global market coverage.

An integrated global trader with bulk handling capabilities: A comprehensive

infrastructure for bulk cargo handling, well developed arrangements for rail and road
transportation, warehousing, port and shipping operations given MMTC complete
control over trade logistics for export and import of over 15 million tonnes of bulk
products annually. MMTC’s core competencies are in the field of minerals, metals and
fertilizers, precious metals, gems and jewelry and agro products.

The company’s countrywide domestic network is spread over 85 regional, sub-

regional, port and filed officers, warehouses and procurement centers.

Broad based activities beyond trading: The process of liberalization in India has taken
MMTC from monopoly status to a competitive open market player making a strong
thrust towards broad basing its sphere of activities while consolidating its core areas
of business. MMTC has diversified for value addition and synergies its core strength
of Iron Ore operations with Iron and Steel production.

A joint venture company of MMTC Limited, Neelachal Ispat Nigam Limited (NINL) is
setting up an integrated steel plant for manufacture of 3,00,000 tpa of steel wire rods,
3,20,000 tpa of steel billets and 4,90,000 tpa of basic grade pig iron at Jajpur, Orissa,
which is extremely rich in Iron ore reserves.

The entire requirement of metallurgical coke of 5,70,000 tpa and a part of the power
requirement of 362 million units per annum wil be met through Konark Met Coke
Limited (KMCL), another joint venture company promoted by MMTC, which is setting
up a coke oven plant adjacent to the integrated steel plant. Both NINL and KMCL are
under advance stage of implementation.

MMTC, with its vast experience is procuring, marketing and selling of various
minerals, metals and other commodities in domestic and overseas markets, is the sole
and exclusive agent for procurement of all raw materials and services for NINL and
KMCL; as also the sole and exclusive agent for marketing and sale of all the products
in India and abroad.

5
India’s leading exporter of Minerals: A major global player in the minerals trade,
MMTC is the single largest exporter of minerals from India. With its comprehensive
infrastructure expertise to handle bulk minerals, the company provides full logistics
support from procurement, quality control to guaranteed timely deliveries of
minerals from different ports, through a wide network of regional and port offices in
India, as well as international subsidiary and foreign offices.

Biggest Importer of Metals: MMTC is India’s largest seller of imported Non-ferrous

metals such as Copper, Aluminum, Zinc, Lead, Tin, Nickel and other minor metals
such as Magnesium, Antimony, Silicon and Mercury, as also industrial raw materials
like Asbestos, Steel and its products.

MMTC imports quality products conforming to international specifications like

ASTIM, BSS or LME approved brands. MMTC source its metals from suppliers
including producers and traders throughout the world.

Largest buyer of Fertilizers: Being the world’s second largest importer of fertilizers
and the largest in India, MMTC has become a major fertilizer marketing company in
India, through planned forward integration of its import activities with the direct
marketing of Urea, DAP, MOP, Sulphur, Rock Phosphate, SSP, Sulphuric Acid, Liquid
Ammonia, Ammonium Sulphate, etc., and other farming and agricultural inputs.

Largest Bullion trader in the Indian Sub-Continent: MMTC is India’s largest importer
of precious metals like gold and silver, handling about 50 mt of gold and 400 mt of
silver. The company has opened a retail jewelry showroom at Maker Bhavan in
Mumbai selling hall marked gold and studded jewelry. MMTC also operates a Duty
Free jewelry sales outlet in the departure lounge at the International Airport,
Mumbai. The company has an in-house assay and hallmarking unit and a medallion
manufacturing facility at New Delhi. MMTC organizes major jewelry exhibitions in
India and abroad.

Leading player in Agro products: India offers a wide variety of agricultural products.
MMTC is amongst the leading Indian exporter and importer of Agro products like
Rice, Wheat Flour, Soya meal, Pulses, Sugar, Processed Foods and plantation products
like Tea, Coffee, Jute and other products. MMTC also undertakes extensive operations
in oilseed extracts. It also trades in edible oils.

Coal and Hydrocarbons – Growth Potential Area: As new measures in post

liberalization era, MMTC is diversifying, establishing and expanding into new areas
of core competencies in the area of Coal and Hydrocarbons and has already got a firm
footing in these activities. MMTC is supplying thermal coal to state electricity boards
and power utilities.

To cater to the needs of power sector, MMTC is already importing steam coal. MMTC
has plans to import, in the near future, coking coal and metallurgical coke to cater to
the needs of steel sector. Other products include Sko, Furnace oil, Bitumen, Naptha,
LPG, LSMS, etc.

6
General Trading: Other general commodities like textiles, mulberry raw silk, building
materials like granite, sand stone, cement, clinker, marine products, chemicals, drugs
and pharmaceuticals, software exports, processed foods, mica and mica products,
engineering items are also handled by MMTC.

7
 CHAPTER – 3

Granites – Introduction:

G
ranite is a hard, coarse-grained rock that makes up a large part of every
continent. Granite consists chiefly of three minerals – quartz, alkali feldspar
and plagioclase feldspar. These minerals make granite white, pink, or light
gray. Granite also consists of small amounts of dark-brown, dark-green or black
minerals, such as horn-blende and biotite mica. The grains of the minerals in granite
are so large that they can easily be distinguished. Many grains measure more than
0.5 centimeter width.

The minerals in granite are interlocked like the pieces of a Jigsaw Puzzle. As a result,
granite is a strong, durable rock useful in the construction of buildings. Most granite
can withstand weathering for centuries and can be polished smooth, making it
especially suitable for columns, tombstones and momentous.

Geologists classify granite as an igneous rock. They have concluded that most granite
is formed by a slow coding and crystallization of molten material called magma. This
magma has the same chemical composition as granite. It forms from rock that melts
25 to 40 kilometers below the surface of continents. These rocks melt at temperatures
between 6500c and 6000 C. The magma rises because it is lighter than the surrounding
solid rocks. As the magma rises, it cools, most granite magma cools slowly enough to
form coarse crystals and it solidifies below the earth’s surface.

Sometimes granite magma erupts from volcanoes and cools too quickly to form large
crystals. The resulting rock, called Rhyolite, has the same mineral composition as
granite but is fine grained.

Experiments have shown that many kinds of rocks yield granite when they melt.
Rocks melt in stages, and the minerals that form granite melt first, one of the reasons
that granite is so abundant may be the ease with which granite magma forms.

The continents consist largely of granite buried under sedimentary rock. Most granite
appears where deeply buried rocks are brought to the surface of the earth by
mountain building movements in the earth crust. Erosion removes the upper part of
the mountains, exposing the granite under earth.

8
Granite Deposits in India – State Wise

Sl No State Area Covered Granite Varieties

1 Kerala 1,650 Sq. Kms. 1. Topical Green
2. Paradiso
3. Kerala White
4. Pink & Grey
2 Tamil Nadu 4,400 Sq. Kms 1. Kashmir White
2. Tiger Skin
3. Raw Skin
4. Paradiso
5. Bash Paradiso
6. Pink Multi
7. Redmond
8. Hosur Grey
9. Rasipuram Blue
10. Colombo Juparana
11. Sea Green
12. Turaiyur Blue
13. Rose Verdi
14. Kunnam Black
15. Vanjinagaram Pink
3 Karnataka 5,600 Sq. Kms 1. Ruby Red
2. Fish Berry
3. Himalayan Blue
4. Chilly Red
5. Sira Grey
6. Ram Nagar Porphyry
7. Savan Rose
8. Tumkur Pink / Porphyry
9. English Teak
10. Red Multi
11. Hasan Green
12. Tiger Black
13. Black Granite
14. Magadi Pink
4 Andhra 38,300 Sq. Kms 1. Black Galaxy
Pradesh 2. Srikakulum Blue
3. Kashmir White
4. Steel Grey
5. Daisy Blue
6. American/Cobra/Emerald Green
7. English Teak
8. Kuppam Green
9. Mandanappale White
10. Pink Multi
11. Anathapur Grey
12. Paradiso
13. Spotted Red
14. Ivory Shine
15. Tan Brown
16. Pista Green
17. Black Granite
18. Silver Galaxy

9
5 Maharashtra 3,685 Sq. Kms 1. Grey Silk
2. Light Pink
3. Jhansi Red
6 Madhya 6,720 Sq. Kms 1. Black Granite
Pradesh 2. Multicoloured Granite
7 Gujarat 812 Sq. Kms 1. Sonawadi Grey
2. Balaram Pink
3. Ajapur Galaxy
4. Chhapara Grey
5. Godh Grey
6. Dhori Pink
7. Khaleda Pink
8. Maharaja Tiger Black
9. Vaghor Grey
8 Rajasthan 30,000 Sq. Kms 1. Mokalsar Green
2. Nagina Green
3. Rasy Pink
4. Yellow Galaxy
5. Grey Granite
6. Blue Pearl
7. China Pink
9 Orissa 1,250 Sq. Kms 1. Berhampur Blue
2. Pink Granite
3. Silver Grey
4. Seaweed Green
5. Chilika Blue
6. Grey Ware
7. Red Pearl
8. Jeypore Black
9. Keonjhar Black
10 West Bengal 1,250 Sq. Kms 1. Bero Pink Porphyry
2. Spotty Ribbon Gneiss
3. Purulia Black
4. Chocolate Brown
5. Birbhum Pink
6. Spotty Black
11 Bihar 2,235 Sq. Kms 1. Tiger Skin
2. Mayurakshi Blue
3. Sawan Rose
4. English Teak
5. Black Granite (Black Chitah and
Black Zebra)
12 Uttar Pradesh 3,100 Sq. Kms 1. Ruby Red
2. Jhansi Red
3. Grey Granite
4. Black Granite
13 Haryana 105 Sq. Kms 1. Steel Grey
2. Porphyry Grey
3. Pink Granite
4. Deep Pink Granite
5. Purplish Granite Porphyry
6. Pink Porphyritic Granite

10
Granite Deposits in India – Block Wise

Sl Region Granite Name Mineral Colour Area Features

No Content (if any)
1 N-S Band Closepet Quartz & Grey & 15-25 Contains
(N.N.W – Granite Feldspar Pink Kms large
S.S.E) Width amounts
of
feldspar
2 Western Tongala Feldspar, Pink Microdine
Regions Granite Manazite, being
(Vijayan Or Torianite, biotite-
Series) near Microdine Quartz, etc. horn-
Rajasthan Granite blende
gneisses
of grade
3 Travancore Microdine Quartz,
and Granite Feldspar,
Tirunelveli Monazite,
Thorinite,
etc.
4 Berach Valley Quartz, Pink to 10 Medium
(between Orthoclase, Reddish miles grained,
Chitoor and Subordinate long non-
Bilwara) Microcline faliated,
and a little non-
of ferro porphyite
Magnesian granite
minerals
5 Alwar
6 Godhwar in Hornblende Other
Jodhpur Granite names of
the
granites
in this
region
are: Idar
Granite,
Jalor
Granite
and
Siwani
Granite
7 Sarangwa More
Quarries than
1.6
Kms
long
8 Rajsamand
9 Jahazpur and
Sabalpura
10 Chilika Quartz with
Catchment in feldspar,
Orissa

11
 garnet and
some biotite
11 Delhi Biotite Granite Quartz,
Microcline,
Orthoclase,
some Ply
close,
Sphen, Iron
ore and
Fluorite
12 Dhangari and Singhbhum
Dalma Areas Granite
(Singhbhum
Granite
Craton)
13 Mayurbhanj
in Orissa
14 Ghatsila Chakradharpur
Region Granite
15 Chota Nagpur
16 North and
Northwest of
Ranchi and
Hazaribagh
(Mirzapur
District)
17 Central
Himalayan
Range and
the Zanskar
Range
18 Sub- Chor Granite
Himalayas of
Simla

Granite Belts in South India

1. Srikakulam - Vizianagaram Belt

2. Prakasam - Guntur – Nellore Belt
3. Karim Nagar – Medak – Rangareddy Belt
4. Kuppam – Chitoor – Mandanapalle Belt
5. Closepet Granite Belt
6. Krishnagiri Belt
7. Togamalai – Tanner Pandal Belt
8. Melur Belt
9. Tiruvananthapuram – Kollar – Tirunelveli Belt
10. Tindivanam – Tirunelveli Belt
11. Dharmapuri Belt

12
 CHAPTER – 4

Dimension Stone Granite – Indian Scenario

I
ndia, with an estimated resource of about 10,27,421 million cubic metres
comprising over 160 shades of DSG, accounts for about 25% of the world’s granite
reserves. Off the 300 varieties being traded in the world markets, nearly half of
them are from India. Commercially viable granite deposits are reported from A.P.,
Bihar, Gujurat, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Tamil
Nadu, Uttar Pradesh and West Bengal.

The industry is composed of the following four types of units.

1. Mining units
2. Polishing or Processing units
3. Exporting units
4. Manufacture of artifacts

The mining units are mainly located in the states of A.P., Karnataka, Tamil Nadu and
Rajasthan. These units are operating under the purview of their respective state
government department of mines and geology. The main activity of these units is to
make raw granite blocks of various sizes depending upon the order placed by the other
types of units – i.e. polishing units, export units or manufacturing of artifact units.

The polishing units are also located mainly in the above mentioned states. These are
mainly Export Oriented Units (EOUs) or units in Export Processing Zones (EPZs).
These units buy raw granite blocks from the mining units and polish them. In the
recent past these units have entered into many joint ventures and collaborations with
foreign importers and polishing units located in foreign countries for supply of
polishing machines. The cost of setting up a sophisticated state of the art granite
polishing unit is nearly Rs. 65 million (Rs. 6.5 Crores).

The exporting units are mainly concentrated near the port towns and cities. These
units get orders from the buyers abroad and then procure granite domestically and
export them to the buyers’ country. In India, there are numerous granite exporting
units. These units are small in size and operations. They deal mainly with a particular
kind of granite or granites.

Granite blocks can be processed to be formed into various artifacts such as Elevation
Pillars, Railing Pillars, Granite Cutlery, Monuments, Flower vases, Pedestals,
Telephone Tables, etc. These artifacts are very attractive and are in great demand in
the European countries. In India, a small number of firms are engaged in manufacture
and trading of artifacts.

Granite Exports from India

The first export of granite (Black Granite) from India dates back to 1925 from
Kuppam, Chitoor District, Andhra Pradesh to the United Kingdom for use as a

13
tombstone. Since then the Industry has made rapid strides, and today India ranks
fifth in the world production of raw granite blocks and third in the export of the
finished products.

Indian granite exports are 40% to Japan, 39% to European countries, 7% to U.S.A.,
and the rest to other countries. During 1996-97, the granite industry earned Rs.
1,139 Crores against a production of 13,50,000 tonnes constituting 31.7% of the total
world production. The exports registered an increase in 97-98 and stood at Rs. 1,468
Crores. Presently, there are about 200 export oriented grate cutting and polishing
units and over 2,000 small-scale units spread over India.

Exports of Granite Blocks from Visakhapatnam Port

Year Quantity (Metric Tonnes) Value (In Rs. Crores)

1992-93 12,252 N.A.
1993-94 53,964 N.A.
1994-95 64,723 N.A.
1995-96 85,189 N.A.
1996-97 75,315 N.A.
1997-98 65,171 46.80
1998-99 1,01,403 57.78

N.A. = Not Available

Competition in the International Market

The competition in the international market is intense. The competition for Indian
granites is from countries such as Taiwan, Korea, Spain, South Africa, China,
Thailand, Iran and Turkey. The units in these countries have huge capacities for
processing granites, which helps reduce their cost of production, which in turn helps
them to price their products cheaper than Indian exporters. This has led to fall in
international market prices.

The units in India are small and therefore are unable to reap the economies of scale.
The domestic units do not have the resources to build brands or innovate new designs;
this has led us to be recognized in the international market as only exporters of raw
blocks rather than exporter of value-added products.

Problems faced by the Granite Industry in India

In the recent years, the granite industry in India has been facing severe problems.
The performance of the export oriented undertakings (EOUs) of the granite industry
has fallen short of expectations and unless measures are taken to infuse confidence
and credibility in them in time, the industry will be plunged into deep crisis. The EOU
scheme was ushered in with a view to encourage manufacturing of a range of quality
products and to generate employment opportunities, policy changes at macro level

14
and procedural simplifications at the micro level were brought about to meet the
goals. The growth of the granite EOUs was mostly between 1990 and 1996 and it was
confined to Andhra Pradesh, Tamil Nadu and Karnataka. EOUs have provided better
linkages with the domestic economy in terms of use of raw material and attracting
FDI and sub-contracting. In the liberalized scenario, new schemes with extended
benefits of duty-free imports appear to have diluted the attraction to EOUs. These and
a host of other factors have affected the growth of the granite industry. Though the
market for granite products abroad has registered an annual growth of 8 percent, the
majority of the 100 percent granite EOUs, which went public, have not performed to
expected levels. The reasons for non-performance have been mainly related to finance
non-availability of quality raw blocks, fall in international prices and others.

The granite industry in the country comprise the segment of rough blocks and value
added products. Inadequate working capital has hit the majority of units, forcing them
to work at reduced capacity. The granite trade operates largely on credit terms, which
could be smooth only when there as adequate working capital. The interest burden
also has added to the woes of the industry, rendering the products costly in
comparison with international prices offered by countries having cheaper credit
facilities. When the export of value added products was conceived, availability of raw
material in sufficient quantities was envisaged. But the suppliers (quarry owners) of
raw blocks preferred to export them to avail themselves of tax exemptions under
Section 80 HHC as also to get assured payments. The situation rendered the
availability of raw blocks for EOUs hitting their delivery schedules.

The recent growth in competition from countries such as Taiwan, Korea, Spain, South
Korea, China, Thailand, Iran and Turkey, which have huge capacities for processed
granite has led to fall in international market prices. In addition, the small and
medium domestic units, due to their low production costs, could export at a lesser
price upsetting the position of 100 percent EOUs. Indian granite has substantial
presence in South-East Asia, but the economic crisis in the region has hit demand.
While foreign importers of raw blocks manager to get good quality materials, the local
EOUs are starred of them. They also have to pay higher prices even for the material
rejected by the importers. With competition remaining the driving force, the mineral
development corporations of the State Government preferred to sell large size blocks
to foreign customers. Since granite is a minor mineral, there is no uniform national
policy, resulting in serious problems in procurement and movement of rough granite
blocks from one state to another.

The commerce ministry, on its part, has to establish linkages of rough granite blocks
with export of products by processing units to ease matters. In the given
circumstance, the industry wants the Government to reduce its export commitment
for the next five years to achieve levels. The quarry leases need to be liberalized giving
preference to 100 percent EOUs. Extension of tax exemptions under Section 80 HHC
for the supply of raw blocks to EOUs, meeting of working capital requirement in full
through revised norms and exemptions of EOUs from sales and turnover taxes for
purchases made within the state are among the demands of the industry. The
industry also needs website facilities for all EOUs as a promotional tool for the
international market.

15
Future of the Granite Industry

The future of the granite industry is bright provided the government takes necessary
steps to boost exports. This optimism is based on the fact that nearly one-fourth of the
granite reserves in the world are found in India and of the 300 varieties traded in the
world 160 varieties are from India.

The problem of non-performance by the industry is due to the lack of coordination

among the various types of units (i.e. quarrying, polishing and manufacture of
artifacts). These units are very small in size and operations. They do not have the
necessary resources to pursue long-term strategies of brand building and exporting
into new markets. The degree of innovation is also very less in India.

The domestic granite industry, which is off-late showing interest to improve its image
in the international market, has sought for the creation of a special fund for
technological improvement of mining operations so that the current recovery of 5 to
10 percent can be increased to 25 percent. The granite industry felt that the
technological upgradation was feasible only with access to machinery and tools which
were available abroad. Now the government has permitted the 100 percent EOUs to
import machines, tools and consumables to enable value addition. The present
production can be doubled automatically with just one-time capital investment on
machines and equipment. The industry has also pleaded for a uniform competitive
royalty rates throughout the country. Another is the dead rent factor which the
industry feels to be unreasonably high for the granite sector.

But the above problems are likely to be solved by the recent formation of Granite
Development Council. The government has established granite Development Council
with representative from Industry and Government officials, with the aim to increase
the exports to Rs. 2,000 crores. The Development Council decided to formulate a long-
term approach for the next 20 years and evolve a national policy on Granites.

16
 SUGGESTIONS AND CONCLUSION

T
rade in Granites is lucrative, and India has the comparative advantage in
trading in Granites, because of its vast endowment of granite reserves. Since
Granites are in great demand in the European Countries and also in the Middle
East, export of granites is attractive. This can be seen from the following calculations
given below: -

Particulars Amount Amount

(Rs.) (Rs.)
Selling price of a tile of 1’ X 1’ of 10 mm thickness in 26,40,00,000
International market

($ 4 per unit X 15,00,000 Units X Rs. 44/-)

Exchange rate between USD/INR = Rs. 44/-

Less: Cost price of a tile of 1’ X 1’ of 10 mm thickness in 18,45,00,000
India

(Rs. 123 per unit X Rs. 15,00,000 Units)

Add: Port charges 57,736

(US $ 0.2187 X 2 X 3,000 X 44)

Add: Pilotage charges 83,160

(US $ 0.315 X 2 X 3,000 X 44)

Add: Wharfage charges 96,000

(32 X 30,00,000/1,000)
Add: Berth charges 18,000

(US $ 0.13618 X 44 X 3,000)

Add: Finance charges 46,12,500

Add: Transport, Admin & Miscellaneous costs 25,00,000

Total Cost 19,18,67,396
Profit 7,21,32,604

Note:
1. The calculations do not include the wagon hire charges from the supplier’s place
to Visakhapatnam Port.
2. The calculation does not include the C&F agents fee, Customs duty payable at
the port of shipment, freight charges payable to the Shippers.
3. The calculations are made assuming that the price quoted is under CFR terms.
4. The calculations are made assuming that the USD/INR rate is Rs. 44/-
5. The domestic selling price quote is the price of Galaxy variety of granite of
Srikakulam.
6. The approximate weight of a 1’ x 1’ tile is assumed to be 2 Kgs.

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 7. For a better understanding of the calculations made above, see the list of
charges given in the Appendix.

MMTC with its solid infrastructure, efficient manpower and vast exposure to
international markets is best suited to enter this business. It can also act as a link
between the domestic suppliers and the foreign buyers by exporting on behalf of the
supplier for commission. Both of these activities are going to bring additional revenue
to MMTC with less cost and effort.

Srikakulam, the largest granite belt in Andhra Pradesh, being near Visakhapatnam
provides an excellent opportunity to source Granites. Srikakulam is endowed with
wide varieties of granites and there are a number of small scale firms which are
involved in mining and polishing of granites in this region.

Considering the above, export of granites is a business which, I think, MMTC

Visakhapatnam should include in its portfolio of trading.

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 APPENDIX

List of Various Charges

Port Dues

Vessel chargeable (Sea going vessels of 15 Rate of port Frequency of payment in

tonnes and upwards) dues per GRT respect of the same
vessel
A. Vessels entering the outer Harbour: US $ 0.2633 This due is payable for
a. Vessels on foreign run each entry
b. Vessels on coastal run Rs. 3.70
B. Vessels entering the rest of Harbour: US $ 0.2187 This due is payable for
a. Vessels on foreign run each entry
b. Vessels on coastal run Rs. 3.70

Pilotage Fees

Groups Size of the vessel in GRT Unit Rate per GRT Rate per GRT
for vessels on for vessels on
foreign run Coastal run
w.e.f. w.e.f.
03.04.1997 03.04.1997
I Up to and inclusive of 3,000 GRT Per GRT US $ 0.315 Rs. 4.63
II 3,001 to 10,000 GRT Per GRT US $ 0.330 Rs. 4.85
III 10,001 to 30,000 GRT Per GRT US $ 0.344 Rs. 5.07
IV 30,001 GRT and Above Per GRT US $ 0.495 Rs. 7.28

Wharfage and Overside Charges for Granites

Code Description Unit Export cargos to Import cargoes

other countries (in rate (in Rs.)
Rs.)
0028 Black Granite Blocks 1,000 Kg 32.00 35.20

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 Berth Charges

Groups Size of the vessels in Unit Rate per GRT for Rate per GRT for
GRT vessels on vessels on
foreign run w.e.f. coastal run w.e.f.
03.04.1997 03.04.1997
I Up to and inclusive of Per day or part US $ 0.13618 Rs. 2.002
3,000 GRT thereof
II 3,001 to 10,000 GRT Per day or part US $ 0.08382 Rs. 1.232
thereof
III 10,001 to 15,000 GRT Per day or part US $ 0.05764 Rs. 0.847
thereof
IV 15,001 to 30,000 GRT Per day or part US $ 0.03663 Rs. 0.539
thereof
V 30,001 to 60,000 GRT Per day or part US $ 0.06827 Rs. 1,001
thereof
VI 60,001 GRT and Per day or part US $ 0.05764 Rs. 0.847
Above thereof

Public Bonded Warehouse Charges

Item Code Description Unit Rate (Rs.)

No
1 0703 Bags and Bales For every 50 kgs or 0.50
part thereof
2 0704 Cases and Crates 0.50
3 0705 Casks, Kegs, Drums and 0.50
Jars, if contents are liquid
4 0706 Carriage & Motor Cars 45.00
5 0707 Machinery unpacked 0.50
6 0708 Articles no enumerated 0.50

Wagon Hire Charges

Item Code Description Unit Rate Remarks

No (Rs.)
1 0954 For hiring a Railway Wagon Per trip 9.75 Calculated on the
from Merchant’s godown to Per ton carrying capacity
steamer per berth or from any of the wagon used.
point of the port railway This includes
system to any other point of haulage chares
the same system
2 0955 For detention of the Wagon Per trip 2.20 Calculated on the
beyond free period of 5 hours Per ton carrying capacity
for loading and 5 hours for of the wagon used
unloading
3 0957 Chute wagon equipment Per ton 1.0
charges

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 List of Varieties of Rough Granite Blocks

Red Granites Multi-Colour Granites Blue Granites

1. Ruby Red 1. Kanakapura Multi- 1. Himalayan Blue
2. Sentinal Red colour 2. Vizag Blue
3. BMS Red 2. Jupurna 3. Arya Blue
4. N.K. Red 3. Paradiso
5. BDG Red 4. Colombo Jupurna
6. Shahpur Red 5. Bash Paradiso
7. Jhansi Red 6. Red Multicolour
8. K.R. Red 7. Sira Multicolour
9. Jasmine Red

Porphyry Granites Green Granites White Granites

1. Tumkur Pink 1. Tropical Green (Dark 1. White Galaxy
2. Green Rose Light) 2. Kashmir White
3. Queen Rose 2. Hassan Green 3. Viscon White
3. Sea Weed Green 4. Yedapadi White
5. Madanapalli White
Grey Granites Black Granites Yellow Granites
1. Sira Grey 1. Black Galaxy 1. Sivakasi Yellow
2. Fish Belly Grey 2. G-20 Black 2. Tiruvanamal Yellow
3. Santhekalhalli Grey 3. Tiger Black
4. Grey Galaxy 4. Warangal Black
5. Chamarajanagar Black
6. Kunnam Black

Other Granites
1. Indian Mahagony
2. Tiger Skin
3. Raw Skin
4. Diana Pink
5. Star Ruby (Cat’s Eye)

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 List of Granite Exporters from Vizag

1. M/s. Kunnam Granite Works

2. M/s. Sireesha Granites
3. M/s. Enterprising Enterprises
4. M/s. Apex Granite Exports
5. M/s. Hindustan Granites
6. Sree Venkateshwara Exports
7. M/s. Himalaya Granites
8. M/s. Ajay Mining Company
9. M/s. Primus Exports

List of Customers Abroad

1. Orient Sangyo Kaisha Ltd., Japan

2. Nissho Iwai Corporation Ltd., Japan
3. Mitsubishi Corporation Ltd., Japan
4. Marble Corporation, Japan
5. TAC Corporation, Japan
6. Magti Marble and Granite Trading Inc., Italy
7. Naturtein Verkaufs Gmbh, Germany
8. Cosmic Granites and Marbles Inc., USA
9. Stalian Impex (USA) Inc., USA
10. Kurz Natursteine Gmbh, Germany
11. Kreuzert Boemringer Gmbh, Germany
12. Selerie De la Lessee, Belgium
13. Branch Hot Hermant N.V. Belgium

List of Machinery Suppliers

1. Hensel Bayreuth, Germany

2. Fickert & Winterling, Germany
3. Ferriera Di Citadella
4. Wheel Abarator Allevard, France
5. Fabio Murga, Spain
6. Samick International Industries Co. Ltd., Korea
7. Diamant Boart, Italy
8. Italdimant, Italy
9. Toolgal Degania, Israel
10. Luna Abrasives, Italy

####### END OF REPORT #######

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