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U.S. Silica Cuts Workforce, Raises Prices

U.S. Silica Holdings, Inc. has cut 230 employees as it grapples with the current challenges in its energy markets.

Staffing reductions at the Katy, Texas-headquartered company count for 10% of the company’s total workforce and includes corporate employees as well as the idling of mines in Utica, Ill., and Tyler, Texas. It will also impact Crane County in Texas, Sparta, Wis., and Festus, Mo.

The job cuts in operations will reduce staffed oil and gas capacity by 7 million tons. The company anticipates annual SG&A savings from the staff reductions as well as other cost reductions to total $20 million.

Severance costs related to the workforce reductions will be $1.7 million and incurred by U.S. Silica in the fourth quarter of 2019.

“The difficult decisions announced today are an important element of our plan to protect margins and generate free cash flow in an increasingly competitive oil and gas completions market,” CEO Bryan Shinn said in a company statement. “The actions taken realign our operational footprint and cost structure to more efficiently serve energy customers while simultaneously supporting the expected growth of our Industrials & Specialty Products segment.”

The company also said that part of its Industrial and Specialty Products business will increase prices for most of its non-contracted silica sand, aggregate diatomaceous earth and clay products used primarily in foundry, paints, coatings, elastomers, roofing, chemicals, recreation, building products, agricultural, pet litter and other applications.

Price increases will range up to 6%, depending on the product and grade. Additionally, prices for whole grain sand used in glass applications will increase by up to 5%. The increases for aggregate diatomaceous earth and clay were effective for shipments started Nov. 1, 2019. The increases for silica sand are effective for shipments starting Jan. 1, 2020.

The price increases are being made to support the continued investments the company is making in upgrading its capacity to meet the growing demand for its products and to offset rising production costs.

U.S. Silica Holdings Inc. delivers more than 1,500 diversified products to customers across its multiple end markets. U.S. Silica's wholly owned subsidiaries include EP Minerals and SandBox Logistics.