Koch, Inc. is an American multinational conglomerate corporation based in Wichita, Kansas, and is the second-largest privately held company in the United States, after Cargill.[2] Its subsidiaries are involved in the manufacturing, refining, and distribution of petroleum, chemicals, energy, fiber, intermediates and polymers, minerals, fertilizer, pulp and paper, chemical technology equipment, cloud computing, finance, raw materials trading, and investments. Koch owns Flint Hills Resources, Georgia-Pacific, Guardian Industries, Infor, Invista, KBX, Koch Ag & Energy Solutions, Koch Engineered Solutions, Koch Investments Group, Koch Minerals & Trading, and Molex. The firm employs 122,000 people in 60 countries, with about half of its business in the United States.[2][3][4]
The company was founded by its namesake, Fred C. Koch, in 1940 after he developed an innovative crude oil refining process. Fred C. Koch died in 1967 and his majority interest in the company was split amongst his four sons. In June 1983, after a bitter legal and boardroom battle over the amount of dividends paid by the company, the stakes of Frederick R. Koch and William "Bill" Koch were bought out for $1.1 billion and Charles Koch and David Koch became majority owners in the company.[5] Charles owns 42% of the company; trusts for the benefit of Elaine Tettemer Marshall (the daughter in-law of J. Howard Marshall) and Elaine's children, Preston Marshall and E. Pierce Marshall Jr., own 16% of the company.[6][7] David Koch died on August 23, 2019, and his heirs own the remaining 42% balance of the corporation.
Charles Koch has stated that the company would go public "over my dead body" and that the company has used its freedom from the pressures of public markets to make long-term investments and concentrate on growth.[8][9]
History
Predecessor companies
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, which the company sold to many independent refineries in the United States,[10] threatened the competitive advantage of established oil companies, which sued for patent infringement. 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.[11][12] 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."[13]
Subsidiaries
Infor
Koch invested $2 billion in Infor, which focuses on cloud computing, in November 2016, another $1.5 billion in January 2019, and acquired the remainder of the company in April 2020 in a $13 billion transaction.[63][64]
Arteva Europe S.a.r.l.
Arteva Europe is an "internal bank" which is headquartered in Luxembourg and manages the European cash flows of Koch Industries.[65]
Flint Hills Resources LP
Environmental and safety record
Bloomberg reports that from 1999 to 2003, Koch, Inc. was assessed "more than $400 million in fines, penalties and judgements". The eight instances mentioned by Bloomberg include:
According to the 2016 documentary, Company Town, improper waste disposal by a Georgia-Pacific mill in Crossett, Arkansas, caused a cluster of cancer incidents in the area around the mill.[118]
In 2006, a Flint Hills Resources refinery in North Pole, Alaska[119] was fined $16,000 by the EPA for 10 separate violations and was required to spend another $60,000 on safety equipment.[120][119]
Workers at Georgia-Pacific
Political activity
Fred C. Koch was a founder of the anti-communist John Birch Society in 1958.[124] His son, Charles Koch, who has been co-owner, chairman, and chief executive officer of Koch, Inc., co-founded the Cato Institute. The company also funds the political action committee KochPAC.
According to OpenSecrets, many of Koch, Inc.'s contributions have gone toward achieving legislation on taxes, energy and nuclear power, defense appropriations and financial regulatory reform.[125] Koch Industries has been criticized by the environmentalist group Greenpeace for the role the company played in affecting climate change policy in the United States.[126][127]
Prior to 2008, a Canadian subsidiary of Koch, Inc. contributed to the Fraser Institute, a
See also
- Energy in the United States
- Koch family
- Koch family foundations
- List of largest companies by revenue
- Petrochemical industry
- Petroleum in the United States
Further reading
External links
References
- What we're about. Koch Industries^
- America's Largest Private Companies Forbes^
- Koch Industries: What We Do Koch Industries^