Taming the stone

Nelson Salvador has gotten his best business ideas from his trips abroad.

"Things come together. Maybe, that’s because I’m stepping back and just observing how other people go about making money," he said.

It was during a backpack tour of Europe that Salvador and his wife got interested in marble as an export business. "There were beautiful marble sculptures and marble floors everywhere," he said.

The interest of the Salvador couple in marble is understandable. Salvador’s father-in-law is a marble processor in Pampanga, who can demand a 50 percent down payment upon order because supply cannot meet up with demand. The balance 50 percent is paid upon delivery 30 to 60 days later.

In 1988, Salvador put up N.S. Salvador Marble and Construction Corp. to make floor medallions or tiles. Its first big buyer was based in Italy.

Four years later, the company expanded its business line to table tops, the result of another trip to Italy where Salvador’s wife saw mosaic floors and walls popular during the time of the Caesars. The first table top made by the company was based on a Korean floor design that measured 2.8 meters in diameter and which was reduced to a 1.2-meter top for a four-seater table.

Today, table tops account for 50 percent of N.S. Salvador’s production.

Semi-integrated

The Bulacan-based company is semi-integrated with its own small quarrying operation to assure supply. The company, however, buys different types and colors of marble from other quarries in Bulacan and in other provinces.

"Normally, a quarry owner puts in a small amount for a start-up to get his samples. He then approaches the marble processors for orders," Salvador said.

In working out a deal with the quarry owner, N.S. Salvador asks for exclusivity or, at the very least, a guaranteed supply. In exchange for that guarantee, the company advances the quarry owner money to buy the equipment to get the marble. On the average, the advance ranges from P1.5 million to P1.8 million. The company gradually deducts the loan against delivery.

"The loan is easily repaid within six months," Salvador said. "The cost of quarrying is P1,500 per cubic meter. The quarry owner turns around and sells the marble to the processor for P3,500 per cubic meter. He can sell the same cubic meter to a Japanese processor for P6,000.

At the plant, the marble is cut and polished, increasing the marble’s value by at least 300 percent. Cutting and polishing are done with reconditioned or second-hand machines from Italy. A new but not top-of-the-line block cutter costs P3 million. A second-hand machine costs P2.5 million. Normally, there are three cutters to one polishing line.

Scraps and dust

Marble scraps are used to make the mosaic table tops favored by European buyers. In-laid tops, which are pieced together like a jigsaw puzzle, are favored by Asian buyers. Precision cutting for in-laid designs are normally done by a water-jet machine that costs at least $1 million.

"We have what we call the Philippine version of the water-jet machine," Salvador said. "We’ve developed a system of cutting and grinding blocks so precise that they fit into each other. The pieces are then glued in place with Italian glue, which is twice more expensive than local glue." Consequently, N.S. Salvador positions its table tops as hand-made specialty products.

Designs come from catalogs and brochures of floor designs. Salvador’s wife and three in-plant designers also come up with their own designs. "We try to come up with one design a day," Salvador said.

Two years ago, N.S. Salvador began experimenting with marble dust, the by-product of polishing which is normally sold to crushing and cement companies. The dust is mixed with resin and molded into religious statues. The first batch of design were based on Renaissance marble statues of the Blessed Virgin Mary.

Manuals for workers

At N.S. Salvador, only 30 percent of production is done by machines. Workers are paid a fixed rate, except for 20 precision workers who are paid per piece. The precision workers, or those who put together the table top designs, report daily at the plant and are considered regular workers. A team is assigned to each table top, making it easier to pinpoint responsibility.

The company has work manuals. A minimum level of productivity is set for each production phase. Workers who go over the minimum level are given a financial bonus. Workers who do not meet the minimum level are more closely supervised. Workers who fail to meet the minimum level after six months are asked to leave.

"I used to have regular breakfast meeting with the workers when we were just starting. It was not effective because we had a different way of thinking, a different culture," Salvador said. "Instead, I’ve put together an administrative team who shares my thinking. It is this team who deals daily with the workers, on the one hand, and whom I talk to, on the other hand."

Having the administrative team at the plant also allows Salvador to concentrate on other things. "I am constantly in touch with the plant by cell phone. I try to be at the plant every other day," he said.

The rest of the week is spent visiting the quarry site, entertaining buyers and talking to other members of the marble industry and to government officials on how to increase supply.

Salvador also represents his company in international trade fairs that specialize in floorings, both to benchmark competition and to talk to buyers. In the United States, this is held annually in Orlando, Florida; in Italy, Verona; and in Japan, Tokyo.

"I enjoy what I do 100 percent and that is reflected in the company’s bottom line," he said. "If you’re happy, you deliver the goods. If you deliver, you make your buyers happy. If you make the buyers happy, you ensure steady jobs for your workers." – MJGrey