Second is U.S. Silica Holdings Inc. (NYSE:SLCA), which provides silica—industrial grade sand—chiefly to energy companies; we own it in Ariel Fund as well as our small cap separate account. When many look quickly at the company, they see a straightforward supplier of a pure commodity product, which therefore has no barrier to entry from competition. We believe, on the other hand, that Silica has a substantial competitive advantage due to its top-notch distribution network and its low costs. Two thirds of its customers are oil and gas producers and another third are industrial companies. In both cases, Silica’s customers need continual supplies of industrial sand or else they must idle their operations, costing a significant amount of time and money. In addition, Silica has 75% of its volume under contract, with an average weighted contract life of two years. In our view, Silica’s customers are highly unlikely to simply switch providers based on price.
From John Rogers' November 2013 commentary.