Testimony of Marty Davis at United States International Trade Commission

Good morning, Chair Karpel, Commissioner Johanson, and Commissioner Kearns. Thank you for having us here today.

My name is Marty Davis, and I'm the Chief Executive Officer at Cambria. I appreciate this opportunity to testify to the U.S. International Trade Commission and explain why our company and the domestic industry as a whole needs safeguard relief from this deluge of imports that has poured into our market over these last five years. 

I have led Cambria since 2000 when we first built our production facilities in Le Sueur, Minnesota. I was one of two employees when the company first started. Today, we have upwards of 2,000 employees. We are a family-owned American company and the largest producer of natural quartz surfaces in the United States. After many years of successful growth and good profitability, for the most part, Cambria's business changed dramatically after the U.S. market was overwhelmed by successive waves of dumped and IP-violating imports of quartz surfaces, a category we helped found in the United States some 20 years ago.

The first surge of quartz surface imports came from Chinese imports beginning around 2015. We filed antidumping and countervailing duty cases to address this huge surge and the violations of existing U.S. trade law. The Commission voted a unanimous 5-to-0 affirmation of our petition. And to provide final affirmative relief in June of 2019. We are very thankful that the Commission took this action because it had a tremendous impact on these illegal Chinese imports. The dumping of product was so egregious that tariff rates reached over 400 percent in some cases. 

Around this time and in response to that relief, many companies were investing heavily in building new quartz facilities in the United States or expanding their existing facilities. LX/LG, a fine Korean-owned family company, made a huge capital investments in its impressive factories in Georgia. Mohawk Daltile built a state-of-the-art large factory in Tennessee. The Guidoni family from Brazil built a beautiful new factory in Georgia as well. Cambria also made investments in a new factory of over $100 million in Le Sueur, Minnesota. American and foreign companies were activating huge capital investments in American-based quartz factories, just as I had told the panel and the Commissioners they would in 2018 when I testified here. Upwards of 400 million in new factories were developed, and American manufacturing jobs grew.

Growth investment continued just as we had anticipated following the imposition of China AD/CVD duties. Cambria more than welcomed this free and fair competition and was enthusiastic about these important investments in the U.S. quartz manufacturing industry. Cambria strongly promotes investment in American manufacturing and the creation of new jobs for hardworking Americans, jobs that are born of free and fair competition on a level playing field. 

The United States building products market leads the world. We must ensure free and fair trade in serving it. It is by far the most attractive building products industry in the world. Thus, this continued predatory behavior. American manufacturing matters and our American skilled workers must be able to pursue careers in U.S. manufacturing, support their families and their communities.

But while all this was happening in America, what we've come to call a reverse fracking was going on, that has foreign production quickly transition from China to other type countries in the Pacific Rim. China is the nucleus in orchestrating this export scheme. Unfortunately, the free and fair market relief received we received from the Trade Commission against Chinese imports back in 2019 was very short-lived, as a huge kind of second flood of imports was already in motion.

Foreign quartz factories were in operation quickly, often partnering with Chinese companies and utilizing various aspects of Chinese know-how, of Chinese trade evasion strategies and for us, a continued violation of our Cambria intellectual property, along with the deployment of Chinese production equipment to other regions of the Pacific Rim. This quartz surface production was targeted directly at the U.S. markets.

The second flood of imports came from India and Turkey, but soon after from Malaysia, Thailand, Vietnam and other countries around the globe, most especially the Pacific Rim, often with a Chinese collusive partnership. Consider the example of Leida Stone, a Chinese owned company that built a new production plant in Thailand in 2020, shortly after our AD/CVD countervailing duty awards were granted, adding 20 production lines, mostly of Chinese origin. 

This is more than double the capacity of the entire U.S. industry. This product is largely exported to the United States. These lines would be in the United States if we'd ensure free, fair and transparent trade. This is but one example of such loss for the United States. 

Foreign producers of quartz services have rapidly popped up all over the globe. They hardly existed on the Pacific Rim before 2013, 13 years after we began our company and this category had begun to blossom. Hardly any quartz products were supplied to the United States or imported into the United States prior to 2012. This second wave of imports was orchestrated in large part by U.S. importers, large importer-distributor companies such as MSI, Vadera and Arizona Tile, swiftly disconnected their existing distribution networks from the Chinese supply, while simultaneously orchestrating a new supply from various countries around the world.

In addition to building huge capacity in these new countries, Chinese companies, foreign producers and U.S.-based importers all working together continued targeting the U.S. market through evasion schemes. Quartz surfacing is often misclassified and transshipped through countries like Malaysia, Thailand, Vietnam, all evading payment of the AD/CVD duties.

Cambria has had to invest large amounts of money to combat this evasion. We've employed arduous investigative measures, taken various legal actions and filed dozens of allegations under the Enforce and Protect Act, and we're just a medium-sized countertop company in the heartland of America. Since the early 2000's, U.S. demand for quartz products has grown remarkably.

Cambria has played a key role in that demand creation, but this huge flood of imports has overtaken this demand. Throughout our history, we have invested heavily in educating our customers, including our critically vital U.S. channel partner fabricators and installers throughout the country, along with our tens of thousands of U.S. retail segment partners, constant efforts with kitchen designers, architects, homeowners, builders and many other retail segment partners, as we discuss the benefits of quartz surfaces as compared to the alternative stone products. 

We also helped grow the market through our investments in innovation and marketing to the consumers. We've continued to invest huge capital in research and development and innovations in advanced technology. Over the decades before this huge surge in imports, our investments and efforts helped create value, demand and prosperity in our markets. This truly translated into a renaissance of U.S. manufacturing jobs from vendor partners and suppliers, to new and expanded Cambria facilities throughout the United States.

This expanding market demand made it possible for us to further invest in our business and expand our company, as it did some of our competitors that had produced and built factories in the United States. This domestic market growth also ushered in investments into these aforementioned competitors, and U.S. factories were built in Georgia, Tennessee, Florida and Texas.

The unprecedented surge in imports over these last years has devastated the U.S. quartz manufacturing industry. Demand for quartz services has clearly skyrocketed, yet the domestic industry share decline rapidly, as this demand was frankly offshored for the most part. U.S. plants have had major slowdowns and some have closed. I don't know how one could debate that.

How does this make any sense? The explanation is quite simple. Well, the U.S. market exploded with 62 percent growth and imported quartz surfacing exploded along with it over both the short and long-term. The domestic quartz manufacturing industry spiraled downward. The industry is sadly and quickly becoming an industry of importers. The best example of this travesty is Caesarstone USA, one of the first companies to join Cambria's ranks as a large U.S. manufacturer of quartz surfaces.

As a competitor, they are friends of ours. I discussed with them when they were going to build their factory here. There's a big move and a big investment. How sad that they have had to abandon this $100 million plus U.S. factory after just eight short years of operation in Georgia, walking away from American workers and the community and the county and the state that helped fund it and support it. 

This was a facility that once represented, as the then-Georgia governor stated upon its opening, "an international business bringing skilled jobs to America and investments in U.S. manufacturing," just like we said when we filed our cases, our petitions in 2019 with China.

Now all of this is shuttered. Caesarstone has repurposed as an international import company. This is where our domestic quartz manufacturing industry is headed without Safeguard relief. At Cambria, we had just invested in a new $80 million plus factory in Minnesota, and we were preparing to advance another $150 million line expansion with new technology in 2023.

Such investments have been hijacked by these imports. Imports from India alone, think of this, have displaced upwards of 90 million square feet of domestic production in 2025. It's indisputable. That volume would have allowed the United States domestic industry to build six additional Cambria-like campuses somewhere in this country. That's resulted in up to $3 billion in new factory and equipment in the United States and thousands of U.S. jobs.

Our campus and our investment in factory and equipment over these 20 years exceeds a half a billion dollars, and that's just India. That's just quartz factories. Upstream vendor suppliers of raw quartz materials and resin would also have invested heavily in their United States operations.

Instead, they've downsized and some have shut down on the supply side as well. But some of them did expand their operations in India, and incidentally use Russian oil to supply them this raw material. I want to assure you, every sale of quartz surface product that involves an imported product is a sale that Cambria and other domestic companies can earn, whether it is a mass market commercial project like a high-rise condo development, or a countertop in a single family home.

You don't make this kinds of investments in manufacturing the United States to serve niche markets. We helped create the category and we have been serving it all. It is indeed these sales, a sale and opportunity that we can earn and will earn in a free, fair market and a level playing field.

With the surge of imports we face every day, U.S. manufacturers are having to compete with foreign knockoffs of quartz priced below our domestic cost of goods sold. We come from the milk business. If you pay more for your milk than you can sell your cheese for, you aren't in business very long. As a family-owned American company, it has given us great pride over the years to employ our many outstanding employees, who helped found and build our company in the heartland of America.

Our Cambria factory shares the neighborhood with cornfields and, as Senator Klobuchar so kindly mentioned, just down the road from the famous Jolly Green Giant in rural America, where manufacturing and farming combine to create robust economies in the American heartland, Le Sueur, Minnesota. And with our national brand, we have expanded our company's position in the United States and have grown to support many Cambria employees throughout the entire nation.

We will indeed continue to grow our company, work hard, invest in our nation and remain a pillar in our local and national economy. In doing that, we need final affirmative relief in this case and would appreciate your consideration in that. Thank you very much for allowing us to be here today and in particular for taking the time to listen to my thoughts. I look forward to answering any of your questions. Thank you very much.