Koch Industries

In 1925, Fred C. Koch joined MIT classmate Lewis E. Winkler at an engineering firm in Wichita, Kansas, which was renamed the Winkler-Koch Engineering Company. In 1927, they developed a more efficient thermal cracking process for turning crude oil into gasoline. This process threatened the competitive advantage of established oil companies, which sued for patent infringement.[19] Temporarily forced out of business in the United States, they turned to other markets, including the Soviet Union, where Winkler-Koch built 15 cracking units between 1929 and 1932. During this time, Koch came to despise communism and Joseph Stalin's regime.[19][20] In his 1960 book, A Business Man Looks at Communism, Koch wrote that he found the USSR to be "a land of hunger, misery, and terror".[21] According to Charles Koch, "Virtually every engineer he worked with [there] was purged."[19]

In 1940, Koch joined new partners to create the Wood River Oil and Refining Company. In 1946, the firm acquired the Rock Island refinery and crude oil gathering system near Duncan, Oklahoma. Wood River was later renamed the Rock Island Oil & Refining Company.[22] Charles Koch joined Rock Island in 1961, having started his career at the management consulting firm Arthur D. Little. He became president in 1966 and chairman at age 32, upon his father's death the following year.[13][23]

Wood River Oil and Refining Company was renamed Koch Industries in 1968 in honor of Fred Koch, the year after his death. At that time, it was primarily an engineering firm with part interest in the Pine Bend Refinery in Minnesota, a crude oil-gathering system in Oklahoma,[19] and some cattle ranches.[24] In 1968, Charles approached Union Oil of California about buying their interest in Great Northern Oil Company and its Pine Bend Refinery but the discussions quickly stalled after Union asked for a large premium.[20] In 1969, Union Oil began trying to market their interest in Great Northern by telling potential buyers that Koch's controlling interest could be thwarted by currying favor with another owner, J. Howard Marshall II. When Marshall discovered this he threw his lot in with Koch, they together acquired a majority interest in the company and ultimately bought Union's interest.[22] Ownership of Pine Bend refinery led to several new businesses and capabilities, including chemicals, fibers, polymers, asphalt and other commodities such as petroleum coke and sulfur. These were followed by global commodity trading, gas liquids processing, real estate, pulp and paper, risk management and finance.[20]

In 1970, Charles was joined at the family firm by his brother David Koch. Having started as a technical services manager, David became president of Koch Engineering in 1979.

In 2005, the company acquired Georgia-Pacific.[25][26]

In 2008, the company discovered that the French affiliate Koch-Glitsch had violated bribery laws allegedly securing contracts in Algeria, Egypt, India, Morocco, Nigeria and Saudi Arabia after an investigation by Ethics Compliance officer, Egorova-Farines.[27] After Koch Industries' investigative team looked into her findings, the four employees involved were terminated. According to journalist Jennifer Rubin, Koch Industries’ general counsel stated that Egorova-Farines failed to promptly share the findings, choosing instead to give the information to a manager at Koch-Glitsch who was later fired for bribery. According to Koch Industries’ general counsel, "Egorova-Farines was not fired but instead ran into performance problems, left the company to go on leave and never returned." Egorova-Farines sued Koch-Glitsch for wrongful termination in France, lost, and "was ordered to pay costs for bringing a frivolous case".[28]

In 2010, the company was among the first group of nearly 2,000 employers that applied for and were granted federal reimbursements from the U.S. Department of Health and Human Services, under the new Early Retiree Reinsurance Program established by the Patient Protection and Affordable Care Act, for providing health insurance to retirees too young to be eligible for Medicare.[29]

In 2013, the company acquired Molex, a provider of electronic components, for $7.2 billion.[30]

In September 2014, along with the private equity arm of Goldman Sachs, the company acquired Flint Group, a printing ink producer, for $3 billion.[31][32]

In June 2014, the United Negro College Fund announced a $25 million grant from Koch Industries and the Charles Koch Foundation to go towards merit-based scholarships and general support of historically black colleges and universities.[33][34][35]

In December 2014, the company acquired Oplink Communications, an optical networking device maker, for $445 million.[36] In 2015, the company joined the "Ban the Box" movement by removing questions about prior criminal convictions from its job application, making it easier for ex-offenders to find work.[37]

In November 2015, the company "signed a Statement of Support with Employer Support of the Guard and Reserve (ESGR) that pledges Koch will provide supervisors with the tools to hire and support employees serving in the National Guard of the United States".[38]

In November 2017, Koch Disruptive Technologies was established, the corporation's venture arm, led by Chase Koch, son of Charles Koch. [39]

Infor, headquartered in New York City, NY, released a statement on February 4, 2020, that Koch Equity Development LLC, the investment and acquisition subsidiary of Koch Industries, would be purchasing the rest of the equity stake from Golden Gate Capital following an initial investment of over 2 billion USD in November 2016 and over 1.5 billion USD in January 2019.[40] On April 6, 2020, Koch Industries closed the deal to acquire Infor for nearly 13 billion USD.[41][42]

Arteva Europe is an "internal bank" which is headquartered in Luxembourg and manages the European cash flows of Koch Industries.[43]

Flint Hills Resources LP, originally called Koch Petroleum Group, is a major refining and chemicals company based in Wichita, Kansas. It sells products such as gasoline, diesel, jet fuel, ethanol, polymers, intermediate chemicals, base oils and asphalt. It operates oil refineries in six states. Flint Hills has chemical plants in Illinois, Texas and Michigan. The firm is also a major manufacturer of asphalt used for paving and roofing applications. It operates 13 asphalt terminals located in six states including Alaska (2 terminals), Wisconsin (2), Iowa (3), Minnesota (4), Nebraska (1), and North Dakota (1).[44] The firm manages the purchasing of domestic crude oil from Texas and Colorado offices, has five ethanol plants across Iowa and one in Nebraska, has a refinery terminal in Alaska, and operates a refinery in Alaska, Texas, and Minnesota. The Minnesota refinery can process 392,000 barrels (62,300 m³) of crude a day, most of which comes from Alberta, Canada, and handles one quarter of all Canadian oil sands crude entering the U.S.[45] It also operates fuel terminals in Wisconsin (4 locations), Texas (6), and one each in Iowa and Minnesota.[44]

On July 16, 2014, Flint Hills Resources acquired PetroLogistics, a Houston-based manufacturer of chemical and polymer grade propylene.[46][47]

Georgia-Pacific is a paper and pulp company that manufactures a wide variety of household products under the brand names Brawny, Angel Soft, Mardi Gras, Quilted Northern, Dixie, Sparkle, and Vanity Fair. The Atlanta-based company has operations in 27 states.[48]

Guardian Industries is an industrial manufacturer of glass, automotive, and building products based in Auburn Hills, Michigan. The company manufactures float glass, and fabricated glass products for commercial, residential and automotive applications. The company employs more than 18,000 people and has present activities in North and South America, Europe, Asia, Africa and the Middle East.[49]

Acquired from DuPont, Invista is a polymer and fibers company that makes "Stainmaster" carpet products, amongst many.

When the $4.4 billion deal was announced in 2003, Koch planned to make Invista a part of KoSa, its polyester business,[50] which Koch became owner of as of November 14, 2001, after buying the 50 percent stake owned by IMASAB S.A. of Mexico.[51]

The "Lycra" fiber brand was sold to Shandong Ruyi Investment Holding in 2019.

Koch Ag & Energy Solutions, LLC and its subsidiaries, including Koch Fertilizer, LLC, Koch Agronomic Services, LLC, Koch Energy Services, LLC and Koch Methanol, LLC, globally provide products including fertilizer and other plant nutrients for agricultural turf and ornamental plant markets, as well as other enhanced efficiency products and technology for the energy and chemical markets.[52][53]

Koch Fertilizer, LLC, is one of the world's largest makers of nitrogen fertilizers.[54] Koch Fertilizer owns or has interests in fertilizer plants in the United States, Canada, Trinidad and Tobago, Venezuela, and Italy, among others.[55][56] Koch Fertilizer was formed in 1988 when the Koch companies purchased the Gulf Central Pipeline and ammonia terminals connected to the pipeline. The next year, the Koch Nitrogen Company was formed in order to market ammonia. The next few years saw purchases of various ammonia facilities in Louisiana, Canada, and elsewhere, and ammonia sales agreements with firms in Australia, the UK, and other countries. The year 2010 saw the founding of Koch Methanol, LLC, and Koch Agronomic Services, LLC. In October 2010, a plant in which Koch had a 35% stake was nationalized by the Venezuelan government.[57] In 2011, the firm acquired the British fertilizer firm J&H Bunn Limited. Koch Fertilizer has change its name to Koch Ag and Energy Solutions (KAES)[58]

Koch Chemical Technology Group, Ltd. and its subsidiaries design, manufacture, install and service process and pollution control equipment, water purification and desalination equipment, and provide engineering services for various industrial applications and municipalities around the world.[53][59][60]

Koch-Glitsch is an entity of Koch Industries. Koch-Glitsch engineers mass transfer and mist elimination equipment for refineries and chemical plants around the world. As world leaders in process systems, Koch-Glitsch has two joint ventures under its umbrella: The Eta Process Plant and Koch Modular Process Systems.[61]

Eta is the leading supplier of deaeration plants around the world, with over 400 plants worldwide. The majority of seawater deaeration plants supplied by Eta use vacuum stripping.[62]

Koch Modular Process Systems specializes in modular mass transfer systems. Typical applications for these systems include chemical purification, solvent recovery, and liquid-liquid extraction. Koch Modular Process Systems also runs a state-of-the-art pilot plant.[63]

Koch Minerals, LLC through its subsidiaries, is one of the world's largest managers of dry-bulk commodities, and is also involved in oil and gas exploration and production, the production of oil field products, investments in steel and other markets.[53][64]

Koch Pipeline Company LP, which owns and operates 4,000 miles (6,400 km) of pipeline used to transport oil, natural gas liquids and chemicals. Its pipelines are located across Wisconsin, Minnesota, Texas, Missouri, Iowa, Oklahoma, Louisiana, and Alberta, Canada. The firm operates offices in Wichita, Kansas, St. Paul, Minnesota, and Corpus Christi, Texas.

In 1946 Wood River Oil Co. (a precursor company to Koch Industries) purchased Rock Island Oil and Refining Co. As a part of the transaction, it acquired a crude-oil pipeline in Oklahoma. As a result of construction and investments, Wood River acquired other pipelines in the US and Canada. "In the ensuing years," according to Koch Pipeline's website, "the company bought, sold and built pipeline systems transporting crude oil and refined products, as well as natural gas, natural gas liquids and anhydrous ammonia (for fertilizer)."[65] Koch Pipeline and its affiliates currently maintain a 4,000-mile network of pipelines.

In October, 1994, a pipeline broke and discharged over 90,000 gallons of crude oil into Gum Hollow Creek, in Refugio County, Texas. Heavy rains carried the oil to the Nueces River and on into Nueces and Corpus Christi Bays. The discharge oiled terrestrial and aquatic vegetation, birds, sediments, soils, and other biota. The Consent Decree was held up for some time, due to a DOJ criminal case with Koch Pipeline regarding non- and under-reporting of discharges. The criminal case was settled in March 2000 and the assessment completed.[66]

In 1996, an 8-inch-diameter steel LPG pipeline operated by Koch Pipeline Company ruptured near Lively, Texas, a community about 50 miles southeast of Dallas, and began leaking butane gas. The vapor cloud ignited when two residents drove their pickup truck across a creek near a pipeline, the existence of which locals were at the time unaware,[67] while on their way to a neighbor's house to call 9-1-1 and report the smell of gas. The two were killed in the explosion, and approximately 25 families were later evacuated from the neighborhood without injury, including a parent who had witnessed his daughter's death.[67] An investigation conducted by the NTSB found that the pipe section which failed had not been shown to have excessive corrosion in a 1995 inspection. Regulations at the time did not provide criteria for "adequate cathodic protection".[68] Koch also stated that the bacteria-induced corrosion acted quicker than had ever previously been recorded in the industry. The explosion was the only event of its kind in the company's history. In 1999, a Texas jury found that negligence had led to the rupture of the Koch pipeline and awarded the victims' families $296 million.[27]

Koch Supply & Trading companies around the world trade crude oil, refined petroleum products, gas liquids, natural gas, liquefied natural gas, power, renewables, emissions, and metals.[69]

The Matador Cattle Company division operates three ranches totaling 425,000 acres (1,720 km²) located in Beaverhead, Montana; Matador, Texas; and the Flint Hills of eastern Kansas. There are more than 15,000 head of cattle raised on the ranches.[70]

The Matador Land and Cattle Company was founded in 1882 by Scottish investors, whose acquisition included 2.5 million acres in four Texas counties. In 1951, the company was sold to Lazard Frères & Co., which in turn sold some of the Texas land to Fred C. Koch. In 1952, Koch formed Matador Cattle Company, and later one of his companies purchased part of Matador Ranch, which was brought together with other Koch ranches in Montana and Kansas.[71]

In 2010, Matador Ranch in Texas received the Lone Star Land Steward award, an award sponsored by Chevron Corporation, Toyota, and the Texas and Southwestern Cattle Raisers Association for outstanding natural resource management.[72][73]

In addition to pin-and-socket Molex connectors, Molex also produces specialized connectors and sensors for equipment used in data transmission, telecommunication, industrial applications, solar power, automotive electronics, commercial vehicles, aerospace and defense, medicine, and solid-state lighting.[74][75]