Rock of Ages

Like many domestic companies, Rock of Ages, a granite quarrier, manufacturer and retailer, got into the export business out of necessity.

Historically, the 117-year-old company’s principal product has been granite memorials used in cemeteries. It markets its memorials on four quality and price points. But with increased competition from foreign competitors, Rock of Ages saw its U.S. market share on basic memorials shrinking. Foreign competitors were importing simple finished monuments for a fraction of the price Rock of Ages charged.

Knowing it couldn’t compete on price with companies paying workers $40 a month, Rock of Ages shifted gears. According to Robert Campo, director of sales and marketing, after going public in 1997, the company used the infusion of cash to: emphasize its niche market in the U.S. making larger, more complicated monuments; buy new granite quarries so it could offer the broader range of colors the market demanded; and strengthen its exports of granite blocks used in construction.

The company employs 1,000 people in the United States and Canada and owns and operates 10 quarries in several U.S. states, Canada and Ukraine. The firm (ticker symbol: ROAC) does about $90 million in sales a year, and exports $14 million in granite blocks, or 15 percent of company sales.

Rock of Ages makes a point of buying only quarries with exclusive stones, Campo said. “Fortunately, we have some high-end granites,” he said. “We don’t want to buy a quarry where there are others just like it.”

Granite can sell for anywhere from $300 to $2,500 a cubic meter, delivered to a customer’s port. Because of their rarity and quality, all the granites that Rock exports sell for $1,700 to $2,000 a cubic meter, delivered, he said.
But Campo said the firm broke a basic rule by relying too heavily on one market.
Rock of Ages was exporting $2 million in block granite a year to Japan, when that country’s economy collapsed in the early 1990s. “Our exports went to basically zero,” Campo said.
Rock of Ages saw the fall coming but its partner in Japan, Rock of Ages Asia, didn’t want to believe it.

“We kept telling them, the market is shifting. They were saying, ‘We have to protect our Japanese manufacturers,’ ” he said. “We saw it coming and we tried to push them into soliciting building people and other aspects of the stone market. They were focused on monuments. We listened to them and sales went to nothing.”
But Rock of Ages recovered. In 1998, the managing director of a European distribution firm was laid off at about the same time Rock’s contract with his former employer expired. Rock decided to hire the manager, sell directly to its existing customers and work to get more, Campo said.

That manager, Carlo Kirsch, was made director of international sales and is based in Luxembourg. As they began creating a distribution network, Kirsch and Campo hit the road. They made two four-week trips to Asia and three trips to Europe each year. Initially, when visiting mainland China, they brought along a few Taiwanese associates to act as interpreters. The associates also served as guides, helping Campo and Kirsch travel around China to visit the plants of potential customers.
After a while, language wasn’t as much of a barrier has they had expected. “I can’t speak Mandarin except to ask for a cold beer,” Campo quipped. But they found most of the companies had someone on staff who could speak English.
Today, Rock of Ages has a strong foundation in China – literally. As China gears up for the 2008 Olympic Games in Beijing, Rock of Ages will be supplying the granite building materials for the added infrastructure such as airports, hotels and bridges.
“We’ve already gotten business from that. We expect Asia to be a strong export destination until at least 2010,” he said.

Company officials know that consumer tastes change, even on something as permanent as a gravestone. “Right now our stone is flavor of the month,” Campo said. “You try to just follow the market trends and try to stay one step ahead. We’re never going to put ourselves in the position we did. We need to control our own destiny.”