The oil and gas business isn’t just about the stuff that runs our cars and heats our homes. There are countless processes and components involved with the extraction of the products so vital to our everyday lives. Some of the more esoteric of these components are proppants, and Jesse Orsini built a multi-million-dollar business on this highly specialized product.
Speaking to Dr. Laura Munoz’s Global Entrepreneurship class on February 10, Orsini detailed the history of his former company, Carborundum. Founded in 1890, Carborundum was originally a manufacturer of ceramics used in grinding operations. In the 1970s, the company began producing ceramic beads, called proppants, for use as an efficient substitute for the sand then used by drillers in the hydraulic fracking process.
“The product sold very well, and when the time came to expand,” Orsini said, “we knew we would need an aggressive marketing plan to really make a dent in the sand market.” With the help of a petroleum engineer named Steve Cobb, Carborundum not only developed ways to demonstrate the effectiveness of ceramic proppants using actual raw materials, but they also created software programs that could simulate the specific conditions of individual wells. “We couldn’t just sell on the science behind the product,” Orsini said. “We had to show our customers the actually monetary benefits.”
Over the years, as the market for ceramic proppants grew, Carborundum remained profitable, and was part of several buyouts. But as the 17-year patent coverage for the product and manufacturing process drew to a close, Orsini recognized that the time was right to retire from the business.
The market for ceramic proppants has since declined because of lagging oil prices and slowing demand. “I still believe that there is a long term benefit to ceramic proppants,” Orsini said. “But it’s hard to argue with a company that can barely keep its doors open. Sand is cheaper in the short run.” Orsini said the future of companies like Carborundum lies in the recovery of oil markets and in finding new industrial applications for the ceramic beads that make up proppants. And although we can’t always predict the future of markets, we can be sure that the creative engineers and savvy entrepreneurs, like those in University of Dallas classrooms right now, will continue to develop and market products that we never even knew we needed.
The University of Dallas Executives on Campus program was founded to further the University’s mission of providing practice-based education, by inviting successful business leaders to share their experience with graduate and undergraduate students in the classroom. Through this program, alumni, business leaders, and their companies are invited to partner with the University in our shared pursuit of management excellence. For more information click here.