Charles Koch : His companies, Net Worth, Early Life and Business Career
The more books I read the more
passionately I embraced the truth that widespread human well-being demands a
system that clearly defines and protects private property rights, allows people
to speak freely without intimidation or legal repercussions, refrains from
interference with private parties’ agreements and exchanges, and allows human
action—rather than arbitrary notions about how much things ‘should’ cost—to
guide prices.
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Charles Koch
Charles Koch
is an American multibillionaire, businessman, and philanthropist. Together with
his late brother David Koch, Charles Koch inherited Koch Industries, a
multibillion conglomerate where he has since 1967 served as the co-owner,
chairman, and CEO of the conglomerate. Charles Koch ranks No. 18 on Forbes 2020 World's Billionaires list. He is also known in the industry
for his refusal to make the Koch Industries a public company.
Net Worth
$47.5 billion as of May 27, 2020
Early life and education
Charles de
Ganahl was born on the 1st of November 1935 to Clementine and Fred
Koch in Wichita, Kansas. In 1940, His father, Fred Koch made a new discovery
called thermal cracking, a process of converting petroleum into lighter
gasoline and oils. It then became the ticket to his early fortune. This new
discovery would later determine the Koch brothers’ (Charles and David) choice
of study at the University.
Charles Koch
graduated from the Massachusetts Institute of Technology with a bachelor's
degree in General Engineering in 1957. And, by 1958 and 1960, he bagged his
Master's degree and a second degree in Nuclear Engineering and Chemical
Engineering, respectively.
Career
After
graduating in 1960, Koch headed back to Wichita to join his father’s company,
Rock Island Oil & Refining Company (now Koch Industries). Charles Koch
assumed the position of president of the company in 1967 after the death of his
father. In that same year, he renamed the company Koch Industries in honor of
their father. His brother, David joined the company as the executive vice
president in 1968, and by 1983, the pair bought over their brothers’ (William
and Fredrick) holdings of the company for $1.1 billion. By reason of that,
Charles and David became majority shareholders of the company with a 42% stake.
Koch Industries
Under the
leadership of Charles and David Koch, Koch Industries has expanded beyond
engineering to other fields such as refining, petroleum distribution,
manufacturing, energy, minerals, fertilizers, fiber, pulp and paper, finance,
trading commodities, investing, and ranching. The company which started off as
a little oil business has since expanded into a major conglomerate with an
employee base of at least 120,000 in over 60 countries. Koch Industries has
since become the second-largest private-run company in the U.S., and the largest
landowner in the Athabasca oil sands. The company runs as a private company and
has an annual revenue record of at least $110 billion. It was stated that Koch
Industries would have ranked 17th in the Fortune 500 list if it went
public as of 2013. Going public according to Koch would have to be “over my
dead body”.
At the
inception of Koch Industries, more of the company’s focus was on engineering
and crude oil collection. In 1968, Koch approached the Union Oil of California
with the interest of purchasing their shares in Great Northern Oil Company and
the Pine Bend Refinery, the interest was short-lived as Koch backed out from
the offer due to the premium demand of the Union.
Acquired companies
●
Molex, an electronic
distribution company – acquired for $7.2 billion in 2013
●
Flint Group, a printing
ink manufacturer- acquired for $3 billion in 2014
●
Oplink Communications, an
optical device manufacturer – acquired for $445 million 2015
Subsidiaries
Flint Hills Resources LP: this company majorly deals with
refining crude oil and chemicals. It was initially known as the Koch Petroleum
Group. Its products include; diesel, ethanol, gasoline, jet fuel, intermediate
chemicals, polymers, base oils, and asphalt.
Guardian Industries: the company deals with the
industrial manufacturing of glass, building materials, and automotive for
residential, commercial, and automotive applications.
Arteva Europe S.a.r.l: an internal bank which manages the
European revenue of the Koch conglomerate. Its headquarters is at Luxemburg
Georgia- Pacific: a paper and pulp company that deals
with the manufacturing of household products. Brands like Angel Soft, Quilted
Northern, Brawny, Dixie, Vanity Fair, Mardi Gras, and Sparkle are listed under
this company.
Invista: a polymer and fibers company
acquired at $4.4 billion from DuPont. Koch later fully acquired the company by
purchasing the 50% owned by IMASAB S.A. of Mexico.
Matador Cattle Company: The initial founders of The Matador
Land and Cattle Company were Scottish investors who founded it in 1882. The
company was later purchased by Lazard Freres & Co., which later sold a part
of the land to Fred Koch. Later in 1952, Fred Koch created the Matador Cattle
Company. The cattle company operates three ranches of 425,000 acres in total
with over 15,000 herds of cattle raised on the ranches.
Molex: manufacturing of specialized
connectors and sensors for all kinds of equipment used in industrial
applications, commercial vehicles, data transmission, solar power, telecommunication,
automotive electronics, etc.
Koch-Glitsch: incorporation of Koch industries
with its French affiliate, The Eta Process Plant. The company focuses on
engineering mass transfer and mist elimination equipment for chemical plants
and refineries globally.
Koch Ag & Energy Solutions: a subsidiary of Koch Fertilizers,
Koch Energy Services, Koch methanol, and Koch Agronomic Services, deals with
the production of fertilizers, plant nutrients, and ornamental plants. The
company also deals with the production of energy and chemical technologies.
Koch Chemical Technology Group: deals with the designing,
manufacturing, and installation of water purification and desalination
equipment, service process and pollution control equipment, and other
engineering services for industrial applications.
Koch Minerals: deals with the management of
dry-bulk commodities and the exploration and production of oil and gas. It also
deals with steel investments.
Koch Pipeline Company LP: A pipeline oil transport company
located at Wichita, Kansas which transports crude oil and refined products such
as natural gas and anhydrous ammonia across major cities in the U.S. – Texas,
Iowa, Wisconsin, Oklahoma, Minnesota, Louisiana, and Alberta.
Koch Supply & Trading: responsible for the supply and
distribution of Koch petroleum and chemical products such as natural gas, crude
oil, liquefied natural gas, renewable emissions, and refined petroleum,
globally.
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