Acquisitions and Internal Growth Position Koch Industries as a Major Player in the Chemical Industry

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Researched by Industrial Info Resources (Sugar Land, Texas)--In recent years, Koch Industries Incorporated (Wichita, Kansas) has acquired multiple chemical plant assets, adding to its growing list of successful businesses and increasing its position in the Chemical Processing Industry (CPI). Koch now has an estimated 37 chemical plant sites in operation across the United States and Canada with future capital and maintenance spending estimated to exceed $400 million over the next couple of years, based on active projects identified as part of Industrial Info's North American Plant Database. More than 30 projects make up this spending, and they cover a large spectrum of the CPI segments, including fertilizers, olefins, petrochemicals, fibers and much more.

One of the largest future chemical projects currently identified could be an expansion of a polyester intermediates plant located in Wilmington, North Carolina, owned by the INVISTA Incorporated subsidiary. This estimated $200 million project will include a sizeable amount of new equipment as well as assets being relocated from other sites.

Producers of ammonia, urea and other agricultural chemicals have benefited greatly in the last two years from an increase in demand. Koch Nitrogen Company continues invest in new capacity within this market segment and plans for completion of a nearly $60 million urea unit expansion at its Enid, Oklahoma, plant by latter this summer. Further expansion of the site's ammonia capacity for sometime in 2009 is already in the design stage.

In the petrochemical business, INVISTA is nearing completion of major adiponitrile (ADN) and hexamethyldiamine (HMD) expansions at its Victoria and Orange, Texas, plant sites at a cost of nearly $30 million each. In the olefins business, Flint Hills Resources LP will complete a major turnaround of its ethylene and linear low density polyethylene units in Odessa, Texas, in the coming months.

The acquisition of Huntsman Corporation's (NYSE:HUN) (Salt Lake City, Utah) olefin business last year and the purchase of Georgia Pacific's resin business three years ago are just a couple of examples of how Koch has successfully diversified itself in the chemicals market. Across the United States and Canada, Koch owns and operates industrial plants in at least eight different industries, employing more than 40,000 people. Koch has consistently reinvested in most all of the businesses it has acquired in recent years and applied the principles of their successful market-based management (MBM) approach to these assets.

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