Granite Industries of Vermont, Inc.

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Granite Industries of Vermont, Inc.

P.O. Box 537
Barre, Vermont 05641
U.S.A.
Telephone: (802) 479-2202
Toll Free: (800) 451-3236
Fax: (802) 479-7917
Web site: http://www.granitevermont.com

Private Company
Founded: c. 1897 as Valz Granite Company
Employees: 52
Sales: $10 million (2004 est.)
NAIC: 327991 Cut Stone and Stone Product Manufacturing

Based in the small town of Barre, Vermont, privately owned Granite Industries of Vermont, Inc. (GIV) specializes in the manufacture of granite and marble memorials. It is one of a handful of regional companies contracted by the U.S. Department of Veteran Affairs to produce marble headstones for government cemeteries, the memorials provided free to veterans' families. Responsible for the Northeast section of the country, GIV provides all of the headstones for Arlington National Cemetery. Although the bulk of the headstones are for veterans of World War II and Korea, many bear the names of soldiers killed in the war in Iraq, resulting in a great deal of publicity for the tiny company, which employs less than 60 people and does about $10 million in business each year, a third of which comes from veterans' headstones. GIV is also known for its ability to do custom work, and is especially adept at recreating historic monument styles, put to use in the making of replacement headstones, such as the thousands of deteriorating headstones in Confederate graveyards in the South. In addition, the company has won a number of high-profile projects, such as Arlington's Pentagon Victims Memorial dedicated to the people killed in Washington in the September 11, 2001 terrorist attacks, and the black marble wall of the Vietnam Veterans Memorial in Washington. In addition to veterans' headstones and war memorials, GIV also produces public and civic memorials, landscape architecture, and specialized building architecture. Whereas most of the company's raw materials come from local quarries, GIV also imports granite and marble of other colors from countries such as Sweden and South Africa. In addition, the company buys finished product from China, which is able to sell at prices far less than a rough cut GIV could buy at a local quarry. In order to compete against the Chinese, GIV is increasingly turning into a high-quality niche operation.

Emergence of the Vermont Granite Industry in the 1800s

Barre, Vermont, bills itself as the Granite Center of the World, with the industry focused around local quarries that hold an estimated 4, 500-year supply of Barre Gray granite, unique to the area, the result of the land being covered and scraped by succeeding tides of ice sheets over the course of many thousands of years. Barre Gray is a favorite material for monuments, markers, and mausoleums because it is almost as hard as sapphire and resists moisture, and so can be exposed to the elements without crumbling or staining. Moreover, it is consistent from piece to piece and the fineness of its crystals is ideal for carving.

The Barre area was settled in the late 1770s, but in the early decades the area's principal industries were dairy, lumber, and farming. But any farmer who tried to clear his land was sure to encounter granite outcroppings, which the practical Yankees used for house foundations and millstones. It was not until the 1810s that the first quarry opened in Barre. Starting in 1833 the stone was hauled by ox teams over nine miles of hills to Montpelier for use in the construction of the State Capitol completed five years later (at a cost of $400). Next, the city of Troy, New York, ordered ten million paving blocks, which inspired other Barre residents to become involved in the business and stone workers to move into the community. But the growth of the industry was hindered for decades because of transportation difficulties. For years Barre Gray had to be hauled ten miles by ox to reach the closest railroad station. The transportation costs for moving raw material to the shops, and finished work to the customer, made Barre granite and products prohibitive in cost and stunted the growth of the industry. The problem was not remedied until 1875 when the Central Vermont railroad built an extension from Barre to Montpelier. Now the industry began to take shape and the community attracted stonecutters and artisans from Europe, especially Italy, many of whom launched their own business.

Predecessor Company's Founding Likely in the Early 1900s

Two of the Italian immigrants who came to Barre were cousins Constantino and Guido Valz, both born in Montesinaro, Italy, and who founded GIV. Constantino came to the United States in his teens and learned stonecutting from his uncle in Fitzwilliam, New Hampshire. Eight years later, after completing his apprenticeship, he moved to Barre and found work. After four years he decided to strike out on his own and formed a partnership with Guido, five years younger. According to GIV, the cousins launched Valz Granite Company in 1897, but this date is contradicted by Arthur W. Brayley's definitive book History of the Granite Industry of New England, published in 1913. Brayley lists Constantino's birth date as October 11, 1878, which would make him less than 20 years of age, and his cousin (born on September 23, 1883) would have been 14 or 15 if Valz Granite was indeed founded in 1897. If Brayley's research is accurate, it is more likely that the company was founded a decade later, around 1906 or 1907. Nevertheless, the cousins did become partners, starting out modestly, working out of a shed in a meadow. They did well enough that after two years they were able to build their first plant, located on the same site as GIV's present operation. According to Brayley, they specialized in medium and large monument work.

Valz Granite remained in the Valz family until the 1940s when it was bought by Henry Vanetti, an employee of the company, and his brother Aldo. Henry was born in Italy, and Aldo, ten years his junior, was born in Barre. They elected to keep the Valz Granite name and continued the tradition of concentrating on larger work, especially mausoleums. After Henry's passing in 1963, Aldo continued to run the business. When he died in 1978, his son and daughter inherited Valz Granite. They tried running it for two years, but neither were well versed in the monument business and in 1980 they elected to sell the company.

Partners Silvio Nativi, a Barre native and second-generation Italian-American, and New York City businessman Herman Goldberg bought Valz Granite, changing the name in 1980 to Granite Industries of Vermont. Nativi was already running another company, Nativi Granite Company, founded half a century earlier by his father, specializing in monument work. Nativi and Goldberg decided to devote GIV to the construction industry, to perform "cladding" work, putting up sheets of granite or marble on the exterior of buildings. Thus they invested in European equipment such as diamond saws and polishers and gutted much of the GIV plant to make the transition from monuments to cladding. One of their first major contracts was Manhattan's AT&T Building. Ironically, the company's new cladding capabilities landed it a memorial contract that would become the most famous project in company history: The Vietnam Veterans Memorial in Washington, D.C., "the wall." GIV cut, inscribed, and polished the nearly 150 slabs of black granite imported from Bangalore, India, that made up the two separate walls that comprised the memorial. There were no joints connecting the three-inch-wide panels; they were simply pushed together, connected by stainless steel pins drilled into the sides. GIV warned the architect that the granite would expand and contract with the seasons and likely crack, but the installation was not changed. Several years later the first cracks began to appear in some of the center panels, where outer stress converged. A number of blank panels had been stored at the time the memorial was built, allowed to age at the same pace as the rest of the materials, and would likely be pulled out someday to replace the cracked sections of the wall.

GIV concentrated on cladding during the bulk of the 1980s. Then in 1988 Nativi Granite suffered a major fire and Silvio Nativi decided to get out of the business. He and Goldberg agreed to sell GIV. They found a buyer in Jeff Martell, who formed a partnership with Nativi Granite's office manager, Glenn Atherton, to buy the company.

Martell came to the granite and marble business by chance. He grew up in New Jersey, the son of an airline pilot who flew out of La Guardia. He began his college education at the University of Tampa before transferring to the University of Vermont in Burlington. He graduated in 1977 with a bachelor's of science degree in water quality and environmental science, but his dreams of ridding the world of pollution were soon dashed when he learned that the kind of positions available with the Vermont government paid a pittance. Thus he found a job with a SONY distributor, moved to Maine, and began selling electronics. A year later he returned to Vermont to attend a friend's wedding and met the owner of Cook, Watkins & Patch, a Barre granite company, and was recruited as a salesman. Martell agreed and began selling monuments throughout western Pennsylvania, Ohio, and Illinois. He enjoyed the work and over the next five years he established a solid customer base. When Cook, Watkins began experiencing financial problems, he quit in 1983, shortly before his employer went out of business, and launched Martell Memorials. He represented four different Barre granite manufacturers, selling into his established network of customers in the Midwest. He ran his own brokerage business for the next five years, until the opportunity to buy GIV arose.

Company Perspectives:

For family memorials or individual memorials, trust the people who know, understand and work with granite. Retailers with an eye for the very best memorialization select Granite Industries of Vermont for the most demanding execution of detail.

Nativi and Goldberg's asking price was in the $1.8 million range. Both Martell and Atherton put up $100, 000, but had to approach Vermont National Bank for the balance. Three times the bank rejected their loan application, prompting Nativi and Goldberg to drop their price to $1.6 million. The loan was finally granted—albeit at a steep cost, two points over prime at a time of high interest rates. Moreover, the bank kept a tight rein on the company's capital line and required a monthly look at GIV's profit and loss statement. Martell and Atherton's financial situation was made even more precarious because they soon learned that the plant was in terrible condition and required a great number of improvements. The roof was leaking, the heating was shot, and the place was such a fire hazard that the company had to pay a $60, 000 premium for fire and liability insurance. The partners would eventually install new ten-inch mains to accommodate a $100, 000 sprinkler system, which lowered the insurance premium to just $15, 000 a year.

As part of the purchase agreement, Martell and Atherton agreed to complete the construction contracts already on the books, but because Martell and Atherton's backgrounds were in memorials, they wanted to eventually focus on that business. To do so, the company had to incur the expense of leasing space for six months from another area company, Beck & Beck, until it could acquire the specialized equipment it needed to do memorial work in its own plant. With Atherton serving as plant manager and Martell handling sales and the financial responsibilities, GIV and its 26 employees generated about $3 million in revenues in the first year, producing barely enough cash flow to stay afloat.

Mid-1990s Switch to Marble Contract

Nativi Granite had been in the business of producing granite flat markers for the Veterans Administration (VA), but because of its lack of equipment, GIV was unable to pursue the business until 1990 when it won a bid to produce the military markers for the Northeast and Mid-Atlantic states. The company kept the contract for the next four years, but it was a very competitive business, and while GIV's costs continued to rise the VA paid the same price, causing GIV's margins to be compressed to a razor's edge. It was then that the company, which to this point had exclusively worked in granite, began looking at marble, and pursued the VA marble upright contract for military markers. These 42-inch high markers, of which 20 inches were above ground, came in two styles: oval top and "old style, " used to replace the markers on the graves of Confederate soldiers from the Civil War. These markers had a peak, making them difficult to sit upon—as well as for Union veterans to desecrate the graves of their erstwhile foes. GIV won the marble upright contract for the Northeast in 1994 and played a major role in the company's improving fortunes in the 1990s, accounting for about 30 percent of revenues. The year 1994 also was marked by misfortune at GIV: Atherton died of a heart attack at the age of 52 while snowmobiling. The company was able to get by until Martell hired a new plant manager, William Perry. Later an office manager was hired, Forrest Rouelle, to whom Martell would eventually sell a 5 percent stake in the company.

As sales grew so did the GIV operations. By the mid-1990s revenues totaled $4 million to $4.5 million, improved to the $6 million to $7 million range in the late 1990s, and settled around $10 million in the 2000s. When Martell and Atherton bought GIV, the plant was about 50, 000 square feet in size; over the next 15 years it grew by 50 percent. A shipping room was built in 1992, an addition to handle the veterans' markers came in 1994, an outbuilding dedicated to the preassembly of mausoleums was constructed in 1997, and in 2000 the company added a crating area and a washstand area where markers were not only cleaned but inspected. At this point, the company was told by the state that due to the lack of fire walls the facility could not make any more additions without major renovations.

In the mid-1990s, GIV and others in the granite industry began to feel pressure from imports from India, but later in the 1990s China weighed in and put the entire U.S. memorial industry under severe pricing pressure. GIV had begun taking steps to become more of a high-end niche player, producing personalized monuments and mausoleums and introducing new memorial designs. Around 1993 the company acquired Barre Draft Services, picking up specialized equipment as well as talented draftsmen who proved crucial in the company's efforts to stay ahead of foreign competition. But only a few months after GIV unveiled a new design, a Chinese company would have a copy on the market. Graveyards in the New York City area that were once 95 percent Barre product, according to Martell, were now 70 percent Chinese. The price differential was so great that GIV began to buy blank monuments from the Chinese in the 2000s, since it could not even buy raw materials from a nearby quarry at a lower price. In a 2005 interview, Martell offered an example of a massive buffalo from China, some eight feet in length and six feet high, costing just $600.

GIV lost its upright marble contract with the VA in 2000. Whereas the VA maintained that price was just one factor in awarding bids, along with quality and ability to deliver on time, Martell expressed his belief that the contract was lost on price in 2000. Two years later, the contract was won back, again on the basis of price, according to Martell. It was an important piece of business for GIV, one that would focus on providing the markers for World War II veterans who were dying off at an increasing rate, expected to peak in 2008 at around 675, 000. The company also picked up business due to unwanted reasons. It won the contract for the five-sided Pentagon Victims Memorial in Arlington cemetery, dedicated to the people killed at the Pentagon during the September 11, 2001 terrorist attacks. As the war in Iraq dragged on, the company saw an increasing number of orders for markers for soldiers whose birth and death dates were uncomfortably close in time.

Principal Competitors

Rock of Ages, Inc.; Cold Spring Granite Company; Keystone Granite; Wang Li.

Key Dates:

1897:: Valz Granite Company is founded, according to the company.
1940s:: The company is sold to the Vanetti brothers.
1980:: Valz is sold and is renamed Granite Industries of Vermont (GIV).
1988:: Jeff Martell and Glenn Atherton buy GIV.
1994:: Atherton dies.
2002:: The company regains the marble upright contract with the Veterans Administration.