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Marble and Granite Sector

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Marble and Granite Sector Ministry of Industry and Commerce Islamic Republic of Afghanistan AFGHANISTAN’S NATIONAL EXPORT STRATEGY 2018-2022 AFGHANISTAN • • AFGHANISTAN MARBLE AND NATIONAL EXPORT STRATEGY - MARBLE AND GRANITE SECTOR • 2018-2022 GRANITE SECTOR The cornerstones of the Afghan economy ITC is the joint agency of the World Trade Organization and the United Nations. As part of ITC’s mandate of fostering sustainable development through increased trade opportunities, the Chief Economist and Export Strategy section offers a suite of trade-related strategy solu- tions to maximize the development pay-offs from trade. ITC-facilitated trade development strategies and roadmaps are oriented to the trade objectives of a country or region and can be tailored to high-level economic goals, specific development targets or particular sectors, allowing policymakers to choose their preferred level of engagement. The views expressed herein do not reflect the official opinion of ITC. Mention of firms, prod- ucts and product brands does not imply the endorsement of ITC. This document has not been formally edited by ITC. © International Trade Centre 2018 ITC encourages reprints and translations for wider dissemination. Short extracts may be freely reproduced, with due acknowledgement, using the suggestion citation. For more extensive reprints or translations, please contact ITC, using the online permission request form: http: / / www.intracen.org / Reproduction-Permission-Request / The International Trade Centre ( ITC ) Street address : ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland Postal address : ITC Palais des Nations 1211 Geneva, Switzerland Telephone : + 41- 22 730 0111 Postal address : ITC, Palais des Nations, 1211 Geneva, Switzerland Email : [email protected] Internet : http : / / www.intracen.org Layout: Jesús Alés – www.sputnix.es AFGHANISTAN NATIONAL EXPORT STRATEGY 2018-2022 MARBLE AND GRANITE SECTOR Ministry of Industry and Commerce Islamic Republic of Afghanistan This project is funded by the European Union iii ACKNOWLEDGEMENTS The Marble and Granite Sector Export Strategy forms an integral part of Afghanistan’s National Export Strategy (NES). It was developed under the aegis of the Islamic Republic of Afghanistan, the leadership of the Ministry of Industry and Commerce ( MoIC ) and the Afghanistan Chamber of Commerce and Industry (ACCI), in close collaboration with the Afghanistan National Standards Authority (ANSA). The Strategy builds on the work and priorities established by the Ministry of Mines and Petroleum (MoMP), and benefited from the contribution of sector stakeholders and associations. This Strategy was elaborated thanks to the technical assistance of the International Trade Centre (ITC) and falls under the framework of the European Union (EU)-funded ‘Advancing Afghan Trade : EU Trade-Related Assistance’ project. This document reflects the ambitions of the public and private stakeholders who defined the enhancements and future orientations for the sector with a view to in- creasing export performance and social dividends. iv NOTE TO THE READER Afghanistan’s NES was developed based on a participatory approach during which over 500 Afghan industry leaders, small business owners, farmers and public sector representatives held consultations to reach consensus on key sector com- petitiveness issues and priority activities. These inclusive consultations were held throughout the country, including in Mazar-e-Sharif, Herat, Kandahar and Kabul, with participation of stakeholders coming from Nangarhar Province. Besides in-depth research and value chain analysis, these consultations were com- plemented by : Factory visits through which supply chain assessments were carried out to gain further knowledge on key issues such as quality procedures, technical skills, lean management, quality of raw materials, access to market, etc. Interviews with domestic, regional and international buyers to guide the NES with strategic insights and market intelligence as well as buyers’ requirements in terms of quality standards, food safety, packaging, buying cycles, distribution channels, prices, etc. Donor coordination meetings to identify synergies with ongoing / planned ini- tiatives of development partners to eventually result in collaboration during the implementation phase. In spirit and in action : The NES is aligned with existing national and sector-specific plans and policies and builds on ongoing initiatives in areas related to private sector development, regional integration, investment, and youth and women’s economic empowerment. Equally important, the NES initiative already accommodates budgeting to support implementation of critical pilot activities identified during the design process. This will ensure that impact and momentum are generated from early on, and support further resource mobilization and confidence-building. v The principal outputs of the NES Afghanistan design initiative are endorsed, coherent and comprehensive export Strategy documents with a five-year detailed plan of ac- tion ( PoA ) and implementation management framework. These documents include : 1. A main NES document, which contains Trade Support Functional strategies, offering critical support across value chains and acting as enablers for sector development. 2. Individual NES priority sector strategies packaged as separate documents but in alignment with the main NES findings and overarching strategic objectives. NES Afghanistan Main NES document comprising Trade Support Functional Strategies : Quality management Trade facilitation Trade information and promotion Skills development Business and professional services Access to finance Individual NES priority sector documents : Saffron Fresh fruits and vegetables Dried fruits and nuts Carpets Marble and granite Precious stones and jewellery vi CONTENTS Acknowledgements iii Note to the reader iv EXECUTIVE SUMMARY 1 MARBLE AND GRANITE’S PRESTIGIOUS POSITIONING IN THE GLOBAL STONE SECTOR 5 PRODUCT MAP 5 GLOBAL PLAYERS 6 Global exporters 6 Growth of Asia and the Middle East as importing regions 9 GLOBAL TRENDS 11 Cracking the growth of global demand 11 Significant competition from regional quarries 13 Re-export stimulated by worldwide demand for high-quality stone 14 Bricks and clicks : emergence of e-commerce as a distribution channel 16 AFGHANISTAN : BETWEEN A ROCK AND A HARD PLACE 17 NOT YET CARVED IN STONE : A SECTOR OFFERING BEAUTY AND HOPE FOR AFGHANISTAN 17 PRODUCTION CRAVING FOR ROCK-SOLID INVESTMENTS 19 CASTING THE FIRST STONE : A VALUE CHAIN WITH HIGH POTENTIAL 20 A brick-and-mortar production 20 Pebbly distribution 21 PROMISING EXPORT PERFORMANCE 23 POLISHING THE KNOWLEDGE OF KEY COMPETITIVENESS CONSTRAINTS 25 Compete 25 Change 31 MARKETS : SHAPING STRATEGIC DIRECTION 33 MARKET POSITIONING : THE REAL GEM IN PREMIUM AND HIGH-QUALITY SEGMENTS 33 Short-term priorities ( 1-3 years ) : Increase production quality and volume of existing plants 33 Medium-to-long-term priorities ( +3 years ) : Move up the value chain 33 vii EXTRACTING FACTORS DRIVING GROWTH 34 Short-term : polish product quality and cultivate relationships with leading importers 34 Long-term : capitalize on established brand and advance up the value chain 35 THE PHILOSOPHER’S STONE : VISION AND STRATEGIC OBJECTIVES 37 VISION 37 STRATEGIC OBJECTIVES 37 Strategic objective 1 : Improve supply-side capacity and quality management to ensure adequate volume and supply consistency. 38 Strategic objective 2 : Improve the business environment and reduce costs of doing business 40 Strategic objective 3 : Improve market access by providing market intelligence 42 LEAVING NO STONE UNTURNED : MOVING TO ACTION 45 KEY REQUIREMENTS FOR EFFECTIVE IMPLEMENTATION 45 STRATEGIC PLAN OF ACTION 47 REFERENCES 55 viii FIGURES Figure 1 : Theory of change 3 Figure 2 : Marble and granite products 6 Figure 3 : Top marble and granite exporting countries 2016 ( US $ millions ) 7 Figure 4 : Imports by world regions, 2006 and 2016 ( US $ millions ) 10 Figure 5 : Top 10 importing countries by imported value in 2006 and 2016 ( US $ millions ) 10 Figure 6 : World exports of marble and granite, 2005–2016 ( US $ millions ) 11 Figure 7 : Performance of regional competitors of Afghanistan, 2005–2016 ( US $ millions ) 14 Figure 8 : Exports of marble ( left ) and granite ( right ) in different stages of processing, 2005–2016 ( US $ millions ) 15 Figure 9 : Re-exporting hubs of marble and granite 16 Figure 10 : Costs of processing of marble and granite 19 Figure 11 : Current value chain 22 Figure 12 : Trade balance of Afghan marble and granite, 2005–2016 ( US $ thousands ) 24 Figure 13 : Comparison of exported value of Afghan natural stone, 2010 ( left ) and 2015 ( right ) ( US $ thousands ) 24 Figure 14 : Compete problem tree 27 Figure 15 : Connect problem tree 30 Figure 16 : Change problem tree 32 Figure 17 : Future value chain, strategic objective 1 39 Figure 18 : Future value chain, strategic objective 2 41 Figure 19 : Future value chain, strategic objective 3 43 ix BOXES Box 1 : Main industries related to marble and granite 5 Box 2 : Marble and granite forecast 12 Box 3 : Implications for Afghanistan 12 Box 4 : Quality and price determinants of marble and granite 18 Box 5 : Standard machinery required for quarrying and processing 20 Box 6 : Quarries in Afghanistan 23 Source: ITC xi ACRONYMS The following abbreviations are used : ACCI Afghanistan Chamber of Commerce and Industries MoCIT Ministry of Communications and Information Technology ACIM Afghanistan Chamber of
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