“Our products need to contain value-added content like quality and service”

 

Son of the founder of Ingemar Group, Lucas Aranzamendi has spent his professional career in the family business. His time at the helm has been marked by the impetus and development that has led this group of companies to its current position at the forefront of granite production and sales worldwide, establishing companies and quarries in Spain and abroad in the process. Meanwhile, he remains alert to the new threats besetting the granite sector as he endeavours to further consolidate the organization.

 

What are the day-to-day tasks of an executive like yourself responsible for running the world’s leading granite quarrying and sales company?

 

I believe my daily work to be just like that of any other executive heavily involved in the direction and management of their company. It consists of constantly analysing situations that arise in the market in which we operate, making decisions on the basis of those analyses, and importantly, bringing together and motivating a loyal and devoted executive team, which is something that every organisation of a certain magnitude should be based on.

 

What is your assessment of the granite sector in Spain? What are the main problems facing it, and in your opinion, what could be done to resolve them?

 

The granite sector in Spain is threatened by the arrival of material produced in countries such as Brazil and India that, in the past, only exported blocks. Naturally, these are joined by the arrival of products made in China that, as is the case in other industrial sectors, has entered the market with very low prices and products that do not always offer sufficient quality. In order to tackle this situation, our products need to contain value-added content like quality and service. We also need to develop new product lines and finishes and make even greater efforts to open up new markets overseas, offering appropriate service whilst, at the same time, continuing to consolidate our presence in the domestic market.

 

What is Ingemar’s current production capacity and which main materials are gaining greatest acceptance among the company’s customers?

 

Our group’s granite production stands at 350,000 m2 of slabs per month. Acceptance of one material or another depends to a certain extent on the market that they are aimed at, as in some countries there is a demand for certain types of granite that simply does not exist in others. In general, black granites are in great demand. Grey granites also sell well. The trend for granites in yellow tones is also continuing and, in general, there is also demand for more exotic types of granite that have been less well known up until now.

 

Why does there remain a clear difference in the sector between granite quarriers and granite producers, a situation that is not seen between companies specializing in other types of stone?

 

It is certainly true that in the granite sector these two types of company differentiated themselves from one another in the past and, since then, have progressively specialised in their own particular fields. In general, quarriers, with a few exceptions, are probably more comfortable in their field, which does not require such diversified production and human resources and instead depends on in-depth knowledge. However, over time, stone producers have steadily combined their business with quarrying, as for them it has not been difficult to enter this field and, moreover, it has meant that they have been able to guarantee their own supply to a large extent.

 

We are currently witnessing the arrival of venture capital and investment funds in the natural stone sector. What is your assessment of operations of this type in this industry?

 

Venture capital reached Spain quite a few years ago. However, it is true that we have recently seen an increase in these organisations’ activity and there have been both take-overs and operations to gain shareholdings in some of the companies in the sector. We need to bear in mind that over the last few years there has been a very strong increase in the amount of venture capital in Spain throughout all of industry and, not unsurprisingly, interest has also been shown in our sector.

 

Has Ingemar considered carrying out similar operations, as other companies have done?

 

Our company has no plans to carry out any operations of this type. We have a very stable group of shareholders who are satisfied with our Group’s positioning within the global industry.

 

Another phenomenon being produced is that of concentration among companies in the sector as a result of international competition. What is your assessment of these processes?

 

Concentration among companies is a common phenomenon in many sectors. It is one of the fruits of globalisation and greater competition and the stone sector is just as likely to be affected by it as any other. Within the current global context, this type of move to combine companies that lack the capacity, vocation or opportunities to grow by themselves is always likely to be produced. Through this process, certain departments within companies can be developed and strengthened to the extent demanded by the current conditions in the market, which it would otherwise be impossible for such companies to aspire to under their existing circumstances.

 

 

 

Ingemar Group is a company with a clear international dimension and is present in the leading natural stone markets. Is having distribution warehouses in various countries, such as England, one of the products of this success?

 

Ingemar Group’s sales network is certainly extensive and does not consist solely of our network of distribution warehouses, although this is obviously one of our great strengths and something to which it is possible to attribute our position in the marketplace. The service that we offer our clients through the distribution centres is vitally important and highly appreciated. Nevertheless, this process of establishing distribution centres in both Spain and abroad not only represents a considerable investment, it also involves a certain degree of complexity as many aspects related to site selection need to be carefully analysed and weighed up.

 

Of all the buildings that Ingemar has been involved in across the globe, which would you pick out in particular?

 

The list of major projects is pretty extensive as for the last 30 years, without ignoring the strong development of our slab and tile sales, we have specialised in supplying cut-to- measure material for large-scale projects worldwide. If we are talking in terms of meterage supplied, some of the projects we have worked on have involved 100,000 m2, as in the cases of the Istanbul and Singapore airports. By the same token, we have also worked on projects that have stood out for their singularity. One of them was to supply the granite for the exteriors of what was “probably the only new castle built in the 20th century” For this project, which was built on a tiny private island in the English Channel, we supplied around 1,000 m3 of cubic material and a large quantity of mouldings, special ornamental parts and curves. It was like building a small cathedral, but instead of having tens or even hundreds of years to finish it as was the case in the past, we had to perform all of the work in barely 18 months and that represented a significant challenge for us. Another big 50,000 m2 project was supplying material for the Hotel Grand America opened to coincide with the Winter Olympics in Salt Lake City (USA) in 2002. For this project blocks of Bethel White granite were brought from Vermont (USA) to our plant in San Sebastián, from where, after processing, the material produced was sent back to the United States. In Spain, it is also worth mentioning the granite we supplied for BSCH’s Ciudad Financiera complex in Madrid, which is another large-scale project that we have worked on recently.

 

The economy is increasingly globalised. What challenges does Ingemar set itself to ensure that it continues to perform at its current level?

 

Strengthening our position with distribution centres in various foreign countries will constitute a key part of our policy, as will monitoring supply carefully. Furthermore, our Research and Development Department, which concentrates on enhancing machinery and finishes, is also going to play an important role in the future.

 

How is Ingemar affected by competition from emerging countries, such as China, as they become ever more involved in international trade?

 

As I said earlier, China is a problem that now affects a great many industries, one of which is ours. Given that under current conditions it is not possible to compete with them on price, the need to specialise and offer greater added value in our products is becoming especially relevant. We need to create elements that differentiate us from our competitors.

 

Ingemar takes part in the world’s leading trade fairs and, as result, constantly receives information about how the international natural stone market is developing. Could you tell us which direction the sector is heading in?

 

It is indeed true that our participation in the major trade shows helps us to develop our understanding of the situation in our sector. Our contact with our clients and suppliers also provides a rich source of information and enables us to find out about the situation in the various different markets, and this data helps us to plan our future strategy.

 

If the Spanish construction market were to suddenly decline, do you believe that the industry could be sustained by exports? Is it sufficiently well-balanced or would the sector witness an abrupt halt in its development if this were to occur?

 

I do not believe that an abrupt halt is likely in the construction industry, although a gradual slowdown is already occurring that will force companies to adapt to the new situation. Given that companies have been created and developments have been made during the bonanza in this sector in recent years, we would probably all be affected to some extent. Obviously, exports would help companies to withstand such a negative situation, but given the instability of foreign markets it is difficult to predict to what degree they would serve to palliate any effects produced by a slump in the sector in Spain. Over the 55 years that our company has been in business we have seen, as is only to be expected, better and worse market situations, all of which we have always addressed positively and, as a result, we are prepared to deal with any eventuality like the one suggested.

 

What is your view of the role of associations and in particular that of an organisation such as the FDP (Federación Española de la Piedra Natural - Spanish Natural Stone Federation) in the development of a sector like the stone industry?

 

The role performed by the FDP is undoubtedly important because, as we know, it channels and defends the interests of a sector that is fairly fragmented and whose components, on an individual level, find it difficult to present their cases, requests and suggestions to the Government. It is through this approach that its importance is best appreciated, as its very existence means that the sector has a valid representative through which to channel and transmit its opinions and perspectives.