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Oxane reneges on jobs, is sued

Van Buren firm shuts operation by Brian Fanney | March 10, 2015 at 2:28 a.m.

Oxane Materials, which once said it would bring up to 350 jobs to Van Buren, has shuttered operations and is a defendant in court over $260,000 the state says the company owes.

The Arkansas Economic Development Commission said in a complaint that the Houston company fell short of the hiring promises it made in exchange for $500,000 in grant funding for infrastructure improvements.

The company was supposed to create 150 full-time jobs with an average salary of at least $17.72 an hour by 2012, but the state says that never happened.

Oxane discontinued operations in Van Buren in January. The company makes ceramic material used in oil and gas extraction -- a sector of the economy hit hard by falling oil prices.

Saint-Gobain NorPro, a French company that makes similar materials, discontinued its operations in Fort Smith the same month because of market pressure.

"This difficult action has been brought on by a global drop in oil prices and a sudden drop in demand for proppants," Jack Larry, general manager of Saint-Gobain's proppants, said in a news release at the time. "Fort Smith remains a key part of the future of Saint-Gobain's proppants business, and we anticipate resuming production as soon as market conditions allow."

Oxane did not respond to requests for comment.

The development commission notified Oxane that it was in default of the agreement on Dec. 10, asked for the money on Jan. 20 and filed the lawsuit Feb. 13, according to court filings.

Scott Hardin, spokesman for the commission, said it had given Oxane an extension in June 2012 to May 2013.

"Once Oxane announced it was shutting down the Van Buren facility, AEDC made repeated requests to work with the company to obtain the money owed due to the fact terms of the grant agreement were never met," Hardin said in an email. "When the money was not received, AEDC had no choice but to file suit."

According to the agreement, the AEDC provided $500,000 from the U.S. Department of Housing and Urban Development to Van Buren and in turn the city provided the grant money to Oxane for infrastructure improvements.

Oxane had agreed to repay $3,333.33 for every job short of 150, meaning the company only filled about 72 qualifying positions.

"As a condition of receiving the grant proceeds, the company agreed to create at least 150 new, full-time positions within two years of receiving the grant," Hardin said. "If Oxane was unable to meet the grant conditions, clawbacks would apply to the grant funding."

Business on 03/10/2015

Print Headline: Oxane reneges on jobs, is sued


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