Portrait of Charles Koch

in a Pandemic

When we announced our intention to acquire Georgia-Pacific in 2005, it caught many people by surprise. After all, Koch was considered an oil company and had no background in pulp and paper. But as I explained in my booklet on virtuous cycles last year, we believed GP fit with our process industries capabilities. More than 15 years of ownership have validated that belief.

Steve Feilmeier, our new CFO at the time, had a bit of fun explaining all this to the media and analysts: “Two things are for certain: death and taxes. But the next most certain thing seems to be toilet paper. We believe demand should be fairly steady, regardless of what is going on in the economy.”

Never in my life did I imagine people would hoard toilet paper. But last spring, as fears of COVID-19 prompted lockdown orders, it seemed like every roll on every shelf vanished overnight. Canned soup disappeared, too, along with diapers, bottled water, hand sanitizer and disinfectant. The changes didn’t stop there. 

Fewer planes took off and fewer cars were on the road, lowering demand for FHR’s production of gasoline, ethanol and especially aviation fuel. A steep drop in automotive sales did the same thing to INVISTA’s air bag fibers and polymer businesses. The sudden halt in new commercial and industrial construction dealt a severe blow to the markets for Guardian’s architectural glass and KES’s design/build services.

illustration of man running with toilet paper
Quotation Mark

“Never in my life did I imagine people would hoard toilet paper.”

Charles Koch

At the same time, the need for coronavirus testing technology soared, as did requests for PPE and medical equipment. Millions of people forced to stay home decided it was a good time to remodel or repair. A spike in online orders for home delivery heightened demand for packaging and boxes. These developments greatly accelerated demand for the products and services of GP, Molex and Koch Disruptive Technologies.
2020, the year that will always be remembered for the coronavirus pandemic, could have been disastrous for Koch Industries in so many ways. Instead, because of your diligence in keeping each other safe and your contributions at work, 2020 ended up being the company’s third-best year ever. What made the difference? Time and time again, it was your demonstrated ability and willingness to transform. 

I believe 2020 would have been a year of transformation for us even without the pandemic. But because of it, we were pressed to innovate even faster, to focus on bottom-up solutions more effectively, to improve and to empower more people in more ways. 

Thanks to your efforts and transformations — especially those of you on the front line of our manufacturing sites — 2020 was far better than it might have been. That’s something to be proud of and to perpetuate.