The special properties of commercial silica – chemistry, purity, grain size, colour, inertness, hardness, and resistance to high temperatures – make it critical to a variety of industries. Due to the unique properties of commercial silica, it is an economically irreplaceable raw material in a wide range of industrial applications.
Our major end markets include:
The Industrial & Specialty Products segment consists of over 250 products and materials used in a variety of industries including container glass, fibreglass, specialty glass, flat glass, building products, fillers and extenders, foundry products, chemicals, recreation products, and filtration products. New end markets include solar panels, specialty coatings, wind turbines, polymer additives, and geothermal energy systems.
Commercial silica is a critical input and accounts for 55% to 75% of the raw materials in glass production. The glassmaking markets served by commercial silica producers include containers, flat glass, specialty glass, and fibreglass. Demand typically varies within each of these end markets.
The container glass, flat glass, and fibreglass end markets are generally mature end markets. Demand for container glass has historically grown in line with population growth. Flat glass and fibreglass tend to be correlated with construction and automotive production activity, both of which have been improving during the past couple of years.
To the extent that construction and domestic automotive production activity continues its growth in the coming years, demand in these end markets will continue to increase.
Commercial silica is used in the manufacturing of building products for commercial and residential construction. Whole grain commercial silica products are used in flooring compounds, mortars and grouts, specialty cements, stucco, and roofing shingles. Ground commercial silica products are used by building products manufacturers in the manufacturing of certain fibreglass products and additionally as functional extenders and for adding durability and weathering properties to cementious compounds. In addition, geothermal wells are an alternative energy source that requires specialized ground silica products in their well casings for effectiveness.
The market for commercial silica used to manufacture building products is driven primarily by the demand in the construction markets. The historical trend for this market has been one of growth, especially in demand for cementious compounds for new construction, renovation, and repair. The housing construction market began to see an increase in permits and housing starts in 2012, gains that have continued during 2014.
Commercial silica products are used in the production of molds for metal castings and in metal casting products. In addition, commercial whole grain silica is coated internally or sold to coaters of foundry silica, who then sell their product to foundries for cores and shell casting processes. The demand for foundry silica primarily depends on the rate of automobile and light truck production, construction, and production of heavy equipment like rail cars. In 2010, foundry demand decreased significantly as a result of the decrease in automotive and heavy equipment production. However, we began seeing increases in foundry demand in 2011 and throughout 2012. In 2013 and 2014, the foundry market growth appears to have leveled off, with growth more in line with the general economy. To the extent that production levels continue to strengthen in the coming years, which is difficult to predict given the current economic uncertainty, increase in demand in this end market is expected.
Both whole grain and ground silica products are used in the manufacturing of silicon-based chemicals, such as sodium silicate, that are used in a variety of applications including food processing, detergent products, paper textile, specialty foundry applications, and as inputs for some precipitated silicas. This end market is driven by the development of new products by the chemicals manufacturers, including specialty coatings and polymer additives as well as the growth of “green” tires.
FILLERS AND EXTENDERS
Commercial silica is sold to producers of paints and coating products for use as fillers and extenders in architectural, industrial, and traffic paints and is sold to producers of rubber and plastic for use in the production of epoxy molding compounds and silicone rubber. The commercial silica product used in this end market is most often ground silica, including finer ground classifications. The market for fillers and extenders is driven by demand in the construction and automotive production industries as well as by demand for materials in the housing remodelling industry. Demand is expected to improve in these end markets.
In recent years a number of attractive new end markets have developed for high-margin, performance silica products, including high-performance glass, specialty coatings, polymer additives, and geothermal energy systems. The recent economic recovery has significantly increased demand in these same end markets.
Industrial & Specialty Products sales YOY growth of 8% is projected.
OIL AND GAS PROPPANTS
Commercial silica is used as a proppant by companies involved in oil and natural gas recovery in conventional and unconventional resource plays.
Unconventional oil and natural gas production requires hydraulic fracturing and other well stimulation techniques to recover oil or natural gas that is trapped in the source rock and typically involves horizontal drilling. Frac sand is pumped down oil and natural gas wells at high pressures to prop open rock fissures in order to increase the flow rate of hydrocarbons from the wells. Additionally, every 4 to 5 years, proppants may be used to “re-fracture” the reservoir and keep the fractures open.
Oil and Gas market is 650 miles closer to the major Texas and Louisiana shale-plays than Wisconsin sand mines, offering approximately $15/ton savings per ton(T) in transportation costs.
United States – Six regions account for 90% of oil growth and virtually all gas growth in the US. The Arkansas Asset is strategically located close to Texas and Louisiana, thereby able to supply three of the southern USA’s largest oil & gas basins.
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