Koch, Inc.

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, 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. 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". According to Charles Koch, "Virtually every engineer he worked with [there] was purged."

In the 1930s Winkler-Koch built refineries in nine different countries across hundreds of projects. In 1933 when several American companies were doing business in Germany, in a joint venture with William Rhodes Davis, Koch assisted in the design and construction of the third-largest oil refinery in Germany at the time. It was also one of the few refineries capable of refining fuel for airplanes, and was later a strategic bombing target for Allied forces when World War II broke out. The project was stalled for some time as Davis sought approval, which was granted by the Nazi government. The war commenced six years after the refinery was completed. Koch’s business, and the Koch family, supported the American war effort against Adolf Hitler and his government.

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. 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.

Koch Industries

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 a 35% interest in Great Northern Oil Company, which owned the Pine Bend Refinery in Minnesota, a crude oil-gathering system in Oklahoma, and some cattle ranches.