Covia idles the former Unimin plant in Utica; 65 out of work

Last fall, Covia insisted the Utica plant was not being idled – but that was before the novel coronavirus worsened market conditions.

Covia Corp. announced Tuesday the idling of the Utica plant, formerly Unimin Corp., resulting in 65 individuals left without work.

“The idling is a result of reduced market demand for proppant (sand used in the hydraulic fracturing of oil and gas wells),” said company spokesman Matthew Schlarb. “Lower oil and gas prices, due in part to the pandemic, are the main reason for the reduced market demand for proppant.”

A press release issued on Covia’s investor relations page announced the idling of two plants, including Utica and one in Kermit, Texas along with “de-rating capacity at several other facilities.”

Covia said the changes were implemented to ensure infection control, reduce capacity and cut costs.

“Unfortunately, the pandemic, combined with the collapse of oil prices, has had a negative impact on the markets we serve, forcing us to take painful, but necessary steps, to adjust our operations to better align with market demand,” said Richard Navarre, chairman, president and chief executive officer, said in the release. “These actions better position Covia to successfully navigate the current market without impacting our ability to meet the needs of our customers.”

The press release provided no indication, and Schlarb did not elaborate, as to whether the idling is temporary or permanent.

However, a Covia employee, speaking on condition of anonymity, said he believes the idling of the plant will be permanent. The employee said workers were given severance pay — those with 10 or more years got 500 hours’ paid time — wheras a short-term furlough would have meant unemployment compensation.

“If this were a temporary layoff,” he said, “none of this would be happening.”’

Utica’s mayor said he didn’t get an answer, either. Mayor David Stewart said Covia notified him Tuesday of the idling but Covia gave him no indication as to the duration of the plant’s closing.

“My major concern and thoughts are with the employees and their families who are impacted by this. Covia has been around for a long time and has always been a great working partner with the village. We’re very sad to hear this.”

The idling of the plant will have sweeping repercussions for Utica, and one area worth watching is the revenue from Covia’s property taxes. The La Salle County Treasurer’s Office reported Covia last paid roughly $1.9 million in taxes, which were distributed to the county, IVCC, schools and the village.

Covia still is responsible for the county tax bill but could, at a later date, ask the Board of Review to lower its assessment on the grounds that idling has devalued the property. Buzzi Unicem, Green Thumb Industries and Peru Mall all have so argued for reduced assessments and with varying degrees of success.

The idling of the plant marks a reversal of fortunes for Covia in recent years. In 2014, the Utica plant underwent improvements and added 45 jobs.

Market conditions soured, however, and 65 workers were laid off before the holidays last year, including 25 discharged on Nov. 8.

“Covia has no plans to idle the Utica plant and our intention is to continue to do business in Utica well into the future,” a company spokesman said in a statement issued at that time. That, however, was before the pandemic.

The Utica plant was run by Unimin Corp. until the company merged with Fairmount Santrol in late 2017. The following spring the merging partners announced the combined company would be known as Covia Holdings Corp.