Exhibit : The UK Market

Be Part of the UK Success Story

State of Trade March 2016

Professor Noble Francis, Economic Director at the Construction Products Association, projected in March 2016:

‘Our forecasts anticipate that output will increase 3.6% in 2016, with growth in the three largest sectors of construction, private housing, commercial and infrastructure’.

Stéphane Couteaud, the area sales manager for French stone machinery manufacturer Thibaut, summed it up when he said: “What’s going on in the UK and Ireland is very positive. It’s the spark that I hope will ignite all Europe”… and what is going on in the UK and Ireland is faster construction growth than anywhere else in Europe.

Sales of Thibaut (and all other) stone processing machinery in the UK have taken off again as the economy has rapidly improved over the last few years and stonemasonry companies need efficiency improvements to keep up with demand.

The UK economy has grown strongly across the board quarter on quarter, with the construction leading the way as one of the largest industries in the UK employing more than 2million people in 250,000 businesses.

Future Predictions

All predictions are for continued growth. Using a mixture of forecasts from Glenigan and the Construction Products Association as an indication of the future growth of the stone industry, suggests a growth of nearly 20% between 2011 and 2017. A growth that will see sales of stone back above their 2008 peak (see graph) by the end of 2017.

Additionally, this may underestimate growth in the natural stone sector, which has been taking sales from other sectors since the mid-1990s. At that time, limestone and travertine floors were a rarity, especially in domestic property; granite and engineered quartz worktops only appeared at the highest end of the market; hard landscaping was predominantly concrete with some clay. Even then, the best commercial buildings were clad in natural stone, but many more of them are today, with marble, granite and limestone in the public interiors and restrooms.

The Millennium gave clients and specifiers a longer-term perspective on their work and now customers have seen the quality and beauty of stone they do not want to go back. There is no indication that the appreciation of stone is dwindling.

Graph showing growth of UK stone sales from 2011-2017

Driving the UK Stone Market

One of the drivers of the increased use of stone was falling prices, with the Far East, particularly India and China, taking a rapidly increasing share of the market, driven by their price advantage. There are still those who want the distinctive quality of indigenous and European stones, but there are plenty more who like the economy of imports from further afield.

Unable to compete with the low prices from the Far East, Italy in particular has striven to add value to its stone with elaborate cutting and finishing – and with some success. Although the average price of stone from Italy last year was £952 a tonne, compared with £148 a tonne from the Far East, there are still those who want Italian style and quality of production and are prepared to pay for it.

In the UK, there are also those who want to use British stones because they are eminently appropriate in historic and sensitive settings… and some people also want to support local industry and people, especially in a recession. In fact, many British quarries have not suffered as much as importers, what has been built has tended to be at the higher end of the market by clients who are more sensitive to the materials they use… or who want to build in areas where planners are more sensitive about it.

With UK construction set to continue growing, and stone still a much sought after commodity in all areas of construction, there is every indication that, as Stéphane Couteaud suggested, the UK will indeed be the spark to ignite the recovery of Europe.