U.S. Silica Holdings increases capacity in response to rising demand for sand

Excavator loader
Source: DollarPhotoClub

U.S. Silica Holdings, Inc. (NYSE: SLCA) announced plans today to add approximately 3.8 million tons of new capacity in response to the surging demand for northern white frac sand.

The Company is planning an 800 thousand ton-per-year expansion at its Pacific, MO. plant. The decision to expand the Pacific plant was driven primarily by the oil and gas market’s increased use of fine grade products. The $33 million project also includes a new flagship transload to support the additional volume. The Pacific plant has exceptional logistics, with access to both the Union Pacific and BNSF railroads as well as barge. It is also closer to the Eagle Ford and Permian shale basins, which results in lower freight costs. The project is expected to come online in the third quarter of 2015.

Additionally, the Company has begun development of a new 3 million ton-per-year frac sand mine and plant in Wisconsin and associated in-basin transloads. The project will require a capital investment of approximately $150 million. The facility will be located on a highly-desirable Class 1 railroad and is expected to come online by the middle of 2016.

“Based on conversations with our customers, we believe that a step change is occurring with regard to the volumes of sand being used per well, which translates into significant demand for our products,” said Bryan Shinn, president and chief executive officer. “These new capacity expansions will enable us to keep pace with the market and ensure that our customers have ample products to satisfy their needs.”

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