Genesis Alkali Confirms Layoffs, County Prepares for Valuation Decrease

Genesis Alkali Confirms Layoffs, County Prepares for Valuation Decrease

Genesis Alkali photo

GREEN RIVER — Genesis Alkali confirmed it has laid off employees due to an economic downturn, however, the number of employees involved in the workforce reduction wasn’t released.

Director of Communications for Genesis Alkali, David Caplan, said he can confirm Genesis has laid off employees, but he could not provide additional comments on the subject.

According to the company’s website, Genesis employs about 950 workers at its multiple processing plants and underground mine.

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Back in mid-April, Genesis Alkali announced to its employees that they were temporarily closing the Granger location and the Granger employees were moved over to the company’s main plant. At that time, around 100 employees from the Granger plant were absorbed into Genesis Alkali’s main plant, which is located west of Green River off of I-80.

In a previous interview, Caplan attributed the temporary closure of the Granger plant to a change in the world market, decreases in fourth quarter production and impacts from the COVID-19 Coronavirus.

In the company’s first quarter report, Genesis Energy CEO Gene Sims addressed the closure of the Granger plant location and issues Genesis is having due to COVID-19.

The report states virtually every other energy and industrial companies are having “demand destruction” resulting from shut downs to deal with COVID-19. One way to deal with this “demand destruction” was to take the Granger plant temporarily offline, which reduced its production by about 300,000 tons.

“This demand destruction will, in our opinion, significantly pressure crude prices worldwide for an extended period of time, notwithstanding the apparent production cuts that are scheduled to occur,” Sims said. “It will also pressure the demand for finished products for which soda ash and sodium hydrosulfide are building blocks.”

“We expect to experience some $15-$20 million less in terms of reported margin than what we would have otherwise expected for the remainder of 2020,” Sims said in the report.

When looking toward the future, Sims stated in the letter, “The second quarter for certain is going to be challenging from a volume perspective for our sodium and sulfur businesses.” The letter also stated the third and fourth quarters may be “a challenging operating environment.”

County Valuation

According to Sweetwater County Assessor David Divis, the first-quarter valuation numbers from the Department of Revenue Production shows a decrease of about 25 percent compared to the same time last year, but this includes all hard minerals and oil and gas. In a breakdown, oil decreased by 9 percent, natural gas decreased by 9 percent, surface coal decreased by 1.5 percent and trona decreased by 4 percent, however underground coal increased by 7 percent.

Divis said these numbers are just reflective of the beginning of the COVID-19 pandemic and will change in the second quarter.

“These numbers are interesting and the next (quarter’s) numbers will be even more interesting,” Divis said.

Divis said he is concerned about the decrease in numbers. Sweetwater County has a total valuation of $2.37 billion and $500 million of that has come from the trona industry. He said money from the trona industry has always been consistent, constant and something the county could rely on it and now that’s changed. Divis said the oil and gas industry has always fluctuated, while trona remained fairly steady with a few bumps here and there.

Other big contributors to the county’s valuation from 2019 are oil with $300 million last year, natural gas with $325 million, surface coal with $140 million and underground coal with $75 million.

Divis said the county will continue to watch the valuation numbers as they come in.