U.S. Trade Representative
Quartz Surface Products Safeguard Hearing
Testimony of Andrew Eich

Good morning Chair DiPlacido and members of the Trade Policy Staff Committee. Thank you for the opportunity to appear today. My name is Andrew Eich, and I am the President and Chief Operating Officer of Cambria.

Marty Davis has explained the history of this case, the injury caused by the import surge, and why the domestic industry needs a 50% tariff and a hard quota. I want to address the same issue from a different perspective: what these steps would mean inside a U.S. manufacturing business, and what Cambria is prepared to do if the President provides strong relief and restores fair market conditions for the domestic industry.

Quartz manufacturing is a highly capital-intensive business. Cambria has invested hundreds of millions of dollars in our Minnesota production facilities, equipment, workforce, distribution network, product development, and brand. Those investments were made because demand for quartz surfaces was growing rapidly in the United States and we believed American manufacturers would have a fair opportunity to participate in that growth.

That is not what happened. As imports captured more and more of the growth in the U.S. market, Cambria’s production volumes declined. Historically, we experienced steady annual growth in production and sales, often in the range of 15 to 35 percent. That growth supported continued investment and justified expansion. But as imports surged, we were forced to reduce production from a seven-day schedule to four or five days per week, and our capacity utilization fell to roughly 60 percent.

That loss of utilization has a direct and serious financial impact. In our business, many costs are fixed. The cost of the plant, the equipment, the technical workforce, maintenance, and many other operating expenses do not disappear when production declines. They are simply spread over fewer quartz slabs. That means lower production volumes increase our per-unit costs, reduce profitability, and make it much harder to justify the next round of investment. For a manufacturing business like ours, restoring volume is not just about selling more product. It is about restoring the economic viability of producing quartz surfaces in the United States.

That is why effective relief is so important. If relief restores commercially viable production levels, Cambria is prepared to move forward. First, we would work to return to fuller production schedules and increase utilization of our existing capacity to at least 85%. That would immediately improve our cost structure and financial performance and support additional hiring in our manufacturing operations.

This would also enable us to further support domestic raw material suppliers such as U.S. based resin suppliers as well as our partners at Covia.  Not only do foreign slab producers take jobs from U.S. slab factories, they off-shore the entire supply chain, taking opportunity to compete from domestic raw material suppliers.

Second, we would invest further in our distribution network across the United States, which allows us to serve customers quickly and reliably in markets across the country. We were forced to slow our distribution investments massively when foreign importers were allowed to seize the  growth that should have supported U.S. production.

Third, we would accelerate our innovation program. Innovation is one of the areas where American manufacturers can and should lead. But innovation requires confidence in the market. When imports have seriously injured an industry, resources that should go toward new products, new designs, new technology, and new jobs are instead consumed by the fight to keep existing operations healthy.

Finally, we would revisit the growth plans that we were previously forced to abandon. Before imports derailed our expansion, Cambria had begun planning major additional production investments in Minnesota. Those plans contemplated expanding from six production lines to twelve production lines, representing more than $500 million in total investment and the potential to create more than 500 new manufacturing jobs.

These were not speculative ideas. They were real plans that were being developed and that we are prepared to revisit if the market conditions are restored. Cambria is ready to invest, ready to hire, ready to innovate, and ready to expand American quartz manufacturing. But those decisions require relief that gives us confidence that the U.S. market will not remain flooded by imports at volumes and prices that prevent domestic producers from operating at sustainable levels.

And finally, let me close my prepared remarks with this.  The relief we are seeking will spur substantial investment into the entire domestic quartz industry – this includes our upstream suppliers, manufacturers like Cambria and the many many companies that support our operations.  These businesses operate in large and small communities across the country. 

And these investments will create jobs there as well – good paying manufacturing jobs that serve as the bedrock for so many of these wonderful communities - communities that depend on companies like Cambria for their livelihood.   

For these reasons, I respectfully urge USTR to recommend strong and effective safeguard relief. Thank you for your consideration, and I look forward to answering your questions.