Covia Holdings Corporation provides diversified mineral-based and material solutions for the industrial and energy markets in North America and internationally.
Segments
The company operates through two segments, Energy and Industrial.
Energy
This segment offers the oil and gas industry a portfolio of raw frac sand, value-added proppants, well-cementing additives, gravel-packing media and drilling mud additives. Its products serve hydraulic fracturing operations in the U.S., Canada, Argentin...
Covia Holdings Corporation provides diversified mineral-based and material solutions for the industrial and energy markets in North America and internationally.
Segments
The company operates through two segments, Energy and Industrial.
Energy
This segment offers the oil and gas industry a portfolio of raw frac sand, value-added proppants, well-cementing additives, gravel-packing media and drilling mud additives. Its products serve hydraulic fracturing operations in the U.S., Canada, Argentina, Mexico, China, and northern Europe.
Energy Products
The company offers a suite of proppant products designed to address all well environments and related down-hole challenges faced by its customers.
Northern White Frac Sand: The company’s Northern White frac sand is produced from geologically mature quartz arenite sands mined from deposits located primarily in the northern half of the U.S. These reserves are characterized by structural integrity, significant roundness and sphericity, and low turbidity.
In-Basin Local Frac Sand: The company’s in-basin local reserves are located in West Texas and Oklahoma. Its local frac sand has less crush strength, less sphericity, and lower silica content relative to its Northern White products, and is suitable in certain well environments. These reserves are in close proximity to the Permian and Mid-Continental basins.
Value-Added Products: The company coats a portion of its sand with resin to enhance certain performance characteristics as a proppant using proprietary resin formulations and coating technologies.
The company’s resin coated sand products are sold as both tempered (or pre-cured) and curable (or bonding) products. Curable coated sand bonds down hole as the formation heat causes neighboring coated sand grains to polymerize with one another locking proppant into place. This mitigates the risk of proppant from flowing back out of the fracture when the oil or natural gas well commences production. For certain resin products, the resin’s chemical properties are triggered by the introduction of an activator into the frac fluid. It formulates, manufactures, and sells activators, which work with the specific chemistry of its resins.
The company’s patented Propel SSP product utilizes a polymer coating applied to a proppant substrate. Upon contact with water, the coating hydrates and swells to create a hydrogel around the proppant substrate. The hydrogel layer, which is primarily water, is attached to the proppant particle and provides an increase in the hydrostatic radius of the proppant.
The company’s DST Dust Suppression Technology is a coating applied to sand, which results in reduced respirable crystalline silica exposure.
The company’s silica-based well cementing additives keep cement strong, bonding cement together even under acidic conditions, and prevent strength retrogression in well temperatures approximately 230°F. The company markets these additives as SilverBond.
The company’s silica-based gravel packing sands are monocrystalline and prevent the production of reservoir sands while still producing hydrocarbons. It markets these sands as Accupack.
Industrial
This segment provides raw, value-added, and custom-blended products to the glass, construction, ceramics, foundry, coatings, polymers, sports and recreation, filtration and various other industries, primarily in North America. This segment sells products to the glass, ceramics, construction, coatings, polymers, foundry and various other industries.
Industrial Markets and Products
Glass: The glass market includes four primary sub-markets: container glass; flat glass; fiberglass; and specialty display glass.
The main products the company supplies for container glass production are whole grain silica, feldspar and nepheline syenite. Container glass is primarily comprised of bottles and demand in the U.S. tends to follow U.S. gross domestic product growth and has driven stable volumes for suppliers of silica, feldspar and nepheline syenite.
The main product the company supplies into the flat glass industry is whole grain silica. The main products the company supplies to the fiberglass industry include ground silica and fiberglass grade kaolin. Its primary product for sale to the glass market is produced from high silica content sand deposits throughout North America, however the company also supplies the glass industry with nepheline syenite and other mineral additives.
Ceramics: The ceramics manufacturing market includes a mix of products. Among the main types of ceramics produced are sanitaryware (toilets, wash basins, pedestals, bidets, urinals, sinks and bathtubs), clay brick and tiles (frequently used in residential construction). Sanitaryware is made primarily with clay (ball clay or China clay), quartz and feldspar.
The company supplies the ceramics market with nepheline syenite, granular silica, potassium feldspar, pressing clays, ceramic casting clays, refractory grade clays, plastic forming clays and sodium feldspar. Additionally, the company distributes Ukrainian ball clay, potassium feldspar from India and French pebbles used as grinding media. These products are used in the production of white wares (tableware and/or sanitary ware) and tiles.
Construction: The construction market, driven by urbanization, new home construction, remodeling and repair, and commercial buildings, drives demand for many of the company’s products.
Coatings: The company’s coatings products in North America include nepheline syenite, microcrystalline silica, kaolin and silica.
Polymers: Polymers are chemical compounds or a mixture of compounds formed by polymerization and consisting essentially of repeating structural units.
The usage of the company’s products, particularly nepheline syenite, in polymer markets has been growing due to a number of factors, including an expanded customer base as a result of approval of food-contact applications by the U.S. Food and Drug Administration and development of new products in composites, color concentrates and building and construction products (window and door frames, vinyl sidings and fencing). Its products for the polymers market include nepheline syenite, calcium carbonate, crystalline silica and kaolin.
Foundry and Metallurgical: The company supplies the foundry market with multiple grades of sands for molding and core-making applications, with products sold primarily in the U.S., Canada, Mexico, Japan, and China. It also supplies resin binders which provide the necessary bonding of molds and cores in casting applications. It supplies foundries with metallurgical consumables, which are required by all metal refining and casting operations. Its quicklime additions are an essential component in the refining process to control slag chemistry and protect and extend furnace refractory life.
The company’s silica sand foundry activities are typically local by nature and developed in conjunction with other industries. Foundry sand availability in North America is strongly influenced by heavy industries, including glass, automotive, equipment and oil and gas. The company serves the foundry market through multiple product offerings, including its silica, resin coated sand, Alpha Resin Systems, lime, and refractory grade clays.
Sports and Recreation: The company supplies various turf and landscape infill products to contractors, municipalities, nurseries, and mass merchandisers. Its turf-related products are used in multiple major sporting facilities, including First Energy Stadium and Progressive Field in Ohio, PNC Park in Pennsylvania, Notre Dame Stadium in Indiana, and ADPRO Sports Training Center Fieldhouse in New York. In addition, the company supplies bunker sand, top dressing sands, and all-purpose sands to golf courses and landscape contractors throughout North America. Its sands are also supplied to horse tracks and training facilities. The company also provides colored sand to various major retailers for use as play sand and arts and crafts.
Other Industrial Applications: The company markets a mineral portfolio for a group of industrial and commercial applications, including water filtration and treatment, soil stabilization and neutralization applications.
Customers
The company serves approximately 2,000 customers across various industries in the U.S., Canada, Mexico and the rest of the world.
Seasonality
The company’s business is affected to some extent by seasonal fluctuations that impact its production levels and its customers’ business needs. Demand for many of the products the company sells in the construction and coatings sectors tends to correlate with construction activity, which is lowest in the fourth quarter (year ended December 31, 2018). Additional volumes sold into the Energy markets tend to be slower in the first and fourth quarter compared to the second and third quarter. A majority of its facilities are all-weather facilities capable of providing a consistent supply source to customers.
Intellectual Property
The company’s intellectual property primarily consists of patents, trade secrets, know-how, and trademarks. Its trademarks include its name Covia and products, such as Unifrac, Minex, Glassil, Propstar, Imsil, Granusil, Puresil, PowerProp, Propel SSP, HyperProp, and CoolSet. It holds various U.S. and foreign-granted patents that are still in force as well as many U.S. and foreign patent applications that are pending. The majority of its patents have an expiration date after 2025. The company received various patents on Propel SSP proppant technology and have additional patents pending.
The company operates laboratories in the U.S. and Mexico, which provide mineral processing, analytics and materials research for product and application development across the oil and gas, glass, ceramics, coatings and polymers industries.
Competition
The company’s main competitors in the raw frac sand industry include Badger Mining Corporation (which owns Atlas Resin Proppants LLC), CARBO Ceramics, Inc., Emerge Energy Services LP, Hi-Crush Partners LP, Preferred Sands LLC, Smart Sand Inc., Superior Silica and U.S. Silica Holdings, Inc. Its main competitors in the coated products industry include Atlas Resin Proppants LLC, CARBO Ceramics, Inc., Momentive Performance Materials Inc., Preferred Sands LLC, Vista Sands and U.S. Silica Holdings, Inc.
In its Industrial segment, the company competes primarily against U.S. Silica Holdings, Inc., Short Mountain Silica, J.R. Simplot, A.F. Gelhar Co., Inc., Badger Mining Corporation, The Nugent Sand Co., Inc., Manley Bros. of Indiana, Inc., G3 Enterprises, Lane Mountain Company, Florida Rock Industries, Whibco of New Jersey, Inc., Sierra Silica, Mavisa, Astra, Imerys, Active Minerals, Old Hickory, Minerali, 3M, Carmeuse Lime, Lhoist, Granite Mountain, J.M. Huber, Cimbar, Omya and Custom Grinders.
Regulation and Legislation
The company is subject to the requirements of U.S. Occupational Safety and Health Administration and comparable state statutes that regulate the protection of the health and safety of workers. The company is subject to regulatory programs pertaining to the storage, use, transportation, and disposal of these substances, including Spill Prevention, Control and Countermeasure planning requirements.
History
Covia Holdings Corporation was founded in 1970.
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