The rise of the Koch family

Have you ever wondered what are the things you could do with the vast knowledge that you have accumulated in the field of Chemical Engineering? Read the story of the Koch family, a family of chemical engineers who are the owners of the Koch Industries and are the third most prosperous family in the world with a net worth of more than $100bn.

Early years:

Fred Chase Koch graduated from the Massachusetts Institute of Technology (MIT) in 1922, where he obtained a degree in chemical engineering. Koch began his career with the Texas Company as an engineer and later partnered with Lewis Winkler to form Winkler-Koch Engineering Company. Winker-Koch was sued by UOP for patent infringement which put Winkler-Koch out of business in the U.S. for several years. Koch spent a few years working in the Soviet Union but eventually returned to the US to join new partners and form Wood River Oil and Refining Company which was later renamed as Koch Industries.

The Hidden Opportunity:

When Fred entered the oil business, a new refining process called thermal cracking was sweeping the industry. Standard Oil of Indiana first employed this method commercially in 1913, but it didn’t come into broader use until the 1920s. Before its discovery, refineries relied on a simple, but the wasteful process for distilling crude oil into gas, fuel oil, kerosene, and other petroleum-based products.

In the late 1920s, Koch had invented a new and more efficient method for the thermal cracking of crude oil, the process by which oil has been heated to effect recombination of molecules yielding higher proportions of usable compounds, especially gasoline.

Koch started an Oil refinery, using this new method, and was initially called Wood River Oil and Refining Company which got later renamed to Koch Industries.

Apart from these oil refining industries, Koch has entered into various other fields of chemical industry such as agriculture and consumer products field.

Charles Koch, son of Fred Koch, and a chemical engineer himself took charge of the company from his father by taking as the CEO of the company and began to establish various strategic acquisitions in their oil and energy-related companies such as refineries and pipeline operations.

Later, David Koch younger brother of Charles Koch, also a chemical engineer, joined their company as a technical manager in 1970 and rose through the ranks to be the president of Koch engineering division by 1978.

Fast forward to today, Koch Industries, under the ownership and leadership of Koch’s sons, Charles and David, is the 2nd largest privately held company by revenue in the US.

Cracking of crude oil:

Thermal cracking is the process that Fred Koch improvised which he later used to start his own refinery. Cracking is the process in which heavy hydrocarbon molecules that are present in raw petroleum are broken into smaller molecules by the external supply of heat and under high pressure. Cracking has been considered as one of the most critical processes of the mid 20th century, where it had to play a major role in the field of the petroleum industry.

Refineries could double gas yields using thermal cracking. By applying the right combination of heat and pressure, the process altered the chemical makeup of petroleum, breaking it into simple molecules and “cracking” heavy hydrocarbons into lighter ones, squeezing more gasoline from each barrel of oil.

Conclusion:

Chemical engineering is built on scaling chemical reactions to the scale of industries. Thus, it naturally opens a gateway to the world of business, with importance placed on factors like the triple bottom line and efficiency of the process to maximize output.

These success stories act as inspiration for those who dream of making it big in the competitive world of businesses.

Education helps in strengthening your foundation, upon which you can pursue success by showing perseverance, hard work, and grabbing the right opportunities to create an impact in society.

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