Friday, June 15, 2012WELLSVILLE, Ohio -- With completion of the $6.5 million expansion of a production line at its minerals processing plant here, Cimbar Performance Minerals is looking to nearly double its workforce.
The line will produce a range of "customized mineral products" designed specifically for the oil and gas industry, said the company's president, Albert Wilson. The new products will help the company grow more in the specialty talc, calcium carbonate, magnesium hydroxide and other mineral-based product lines.
As production from the new milling circuit ramps up, the Georgia-based company will hire 27 plant workers, adding to the 34 it already employs, Wilson said.
"That market has been in growth mode for the last two years," he noted. "Currently it's a little slower that it had been because natural gas prices are as low as they are, so some of the drilling has stopped temporarily until the prices edge back up."
As activity in the Marcellus and Utica shale plays increased, Wilson noted the volume wasn't enough to justify the drilling companies building a plant similar to Cimbar's plant in the Wellsville Intermodal Terminal.
"So, we took an educated financial guess and we thought it was a good practical thing for us to go ahead and expand and cover the entire region and create some more jobs at the same time," Wilson said. "We see that based on where the market is now, in the next two to five years -- if it continues to grow -- the volume will exponentially follow it. We would expect to see at least a 10% to 20% growth in need for that market each year for the next three years."
The plant produces some 120,000 tons of mineral-product annually, and the expansion increases the annual capacity of the plant to 650,000 tons, he said. Wilson forecasts even more investment in the plant will be needed as demand increases in the other markets Cimbar serves. Among them are plastics, friction materials, ceramics, rubber, adhesives and environmental applications.
"That plant does not currently have some of the equipment that we have in our other plants to produce high-end product for those markets," Wilson said. "As long as those markets recover like we think they will, we will invest probably another $3 million in the plant to add some additional equipment to serve those markets."
In June 2011, Cimbar assumed the lease for the plant and 12 acres from Astra Minerals LLC. At the time, the plant was producing about 300 tons of material monthly. Today it is turning out 10,000 tons monthly, Wilson said.
"We feel we've done a fairly good job of coming in and increasing the labor for the area and getting things up and running," Wilson said. "And we feel like it's a good place to be going forward."
Cimbar plans to use the Columbiana County Port Authority's 60-ton river crane and barge system to bring in the raw materials needed for its processes at the plant. Wilson said the first barges will likely arrive in July.
"We're very proud to work with the company," said the CEO of the port authority, Tracy Drake. "They have world-class status."
In May, the port authority committed to borrow $3.5 million from the Ohio Department of Development's its logistics and distribution stimulus loan fund. The loan will allow construction of a bulk cargo-handling conveyor system and rail siding improvements that would support a joint effort between Cimbar and Anchor Drilling Fluids USA Inc. of Tulsa, Okla. The two companies plan to process the drilling fluid, or "mud," used to lubricate the drill during deep drilling. There have been "a few hiccups," as Wilson called them, at the state level that has delayed the project at least three months.
"I do understand that this is the first mud plant that's being constructed in Ohio," Wilson said. "From the regulatory standpoint, I think they have seen trying to determine exactly what they want to be required."
The stimulus loan was approved in 2009 to acquire land needed for the Ohio River Clean Fuels coal liquefaction plant until Planck Trading LLC of Boca Raton, Fla. could step in. That project was abandoned.
Former state Rep. Linda Bolon, D-1, helped redirect the funds for the construction of a bulk-materials handling system. The loan converts to a grant once Cimbar and Anchor complete $6.5 million worth of work on the project.
Copyright 2012 The Business Journal, Youngstown, Ohio.