Oxane Materials to close Van Buren plant, estimated 70 jobs lost

Officials with Houston-based Oxane Materials plan to close their Van Buren proppant manufacturing facility on Jan. 23, 2015. The closure will result in the loss of an estimated 70 jobs.

Notice of the closure was a letter dated Nov. 24 to Van Buren Mayor Bob Freeman from Chris Coker, president of Oxane Materials.

“Please be advised that on January, 23, 2015, Oxane Material, Inc. expects to permanently close its business operations located at 3003 Industrial Park Road, Van Buren. … The result of this action will result in the termination of employment for all employees working for the Company at this location,” Coker wrote.

Freeman told The City Wire that he was shocked at the news. Prior to the letter, there was no hint of problems at the company.

“We received notification this morning that Oxane Materials expects to close the facility in Van Buren on January 23, 2015. The news was completely unexpected. Oxane has been a vital part of our community and we have been proud to be the home of their operations. It is most unfortunate for their employees and the families affected and our thoughts and prayers go out to them,” Freeman noted in a statement. 

Jackie Krutsch, president of the Van Buren Chamber of Commerce, also said the news was a surprise.

“The notice received this morning that Oxane Materials is closing its operation in January is both unexpected and disappointing. We had no prior knowledge of any planned closing. Oxane Materials has been an important part of the community since opening here in Van Buren. The Van Buren Chamber has not received  information on the details of the closure. We will work closely with all parties as more information becomes available regarding the circumstances of this closure,” Krutsch said in a statement.

The company uses a patented nanotechnology process to produce ceramic proppants that are injected into geologic formations to “prop” open fissures and allow oil and natural gas to be drawn out. The technology was first developed at Rice University. Company officials have said the Oxane proppant is lighter and stronger than most other proppants and is often used with traditional proppants to reach deeper into shale formations.

News of the closure is certainly a departure from what Coker was saying earlier in 2014. In a May story at Rigzone, Coker said the company was unveiling its new “OxThor” proppant product for use in high-pressure, high temperature wells. Many of those type of wells are drilled by deepwater rigs.

Coker said in the story that the new proppant would be produced in Van Buren beginning in June. He also said the company posted record production of 40 million pounds of proppant in 2014.

As of August 2011, Oxane employed 60 at the plant which produces proppants for the energy exploration (natural gas and oil) sector. The company said in 2010 it would initially invest $15 million in the Van Buren plant. In late 2011 the company said it had plans to invest up to $100 million in Van Buren and possibly employ 350 by the end of 2013. That expansion never fully materialized.

Obviously, the closing will not help a Fort Smith metro labor market that has not recovered from the Great Recession.

The size of the Fort Smith regional workforce during September was 126,104, up from 125,739 during August, but below the 130,684 during September 2013. The labor force reached a revised high of 140,253 in June 2007, meaning the September workforce size is down 10% from the peak number.

The number of employed in the Fort Smith region totaled 118,911 in September, up from 118,030 in August, and an estimated 1,987 jobs below the 120,893 employed in September 2013. The September employment is also 11.1% below peak metro employment of 132,779 in November 2007.