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FHR: a Vision for Innovation Discovery april 2010 THE QUARTERLY NEWSLETTER OF KOCH COMPANIES FHR: a vision for innovation Flint Hills Resources is not the only Given these challenges, FHR’s manage- FHR is one of the few Koch companies private refining and chemical company ment team believed the company needed of significant size without much of an in the United States with several decades an updated vision that would drive international presence. “We process of refining experience. innovation and emphasize flexibility for lots of imported feedstock, but our It is unique, however, in its commit- it to react quickly and profitably to this focus has been on optimizing and oper- ment to Market-Based Management® ever-changing landscape. ating assets in the United States. That needs to change,” Razook said. and its ability to succeed during dif- “Create, sustain and continuously improve ficult times. long-term competitively advantaged Thrive, not just survive In 2009, a year when many U.S. petro- businesses that generate superior returns.” Several FHR leaders, including chemical companies lost hundreds of Razook, have been hitting the road millions of dollars, Flint Hills Resources - From FHR’s vision statement (photo above) so they can speak remained profitable. directly to employees about the com- Thanks to its comparative and competi- “We needed to rethink our vision in a pany’s new vision. The essence of their tive advantages, FHR has been able to way that allowed us to have competitively message is simple and straightforward: grow and succeed despite the brutal advantaged businesses for the long term. “We need to sustain and boom-and-bust cycles of the petro- “At the same time, we would never continuously improve chemical industry. change our commitment to our MBM® those businesses that have Even so, FHR is focused not on what it Guiding Principles, especially 10,000 a competitive advantage has accomplished in the past, but what it percent compliance.” and can do well over a must accomplish in the future. New vision long period of time, and Challenges we need to create new Flint Hills Resources’ vision, which business opportunities Brad Razook, president of FHR, believes focused on growth when last updated in that can do the same,” 2006, now adds an emphasis on innova- the company has entered one of the most Razook said. challenging periods in its history. tion and aggressively pursuing more “To achieve that, we need “There’s no doubt that our industry as global opportunities. to innovate more and think FHR has been recognized a whole is facing serious challenges,” “We want to innovate in at least two as one of the “World’s more globally, but never Razook said. “Markets are changing ways,” Razook explained. “The first is Most Ethical Companies” waver from our commit- and domestic demand for our products in optimizing traditional commodity three years in a row. ment to integrity, compli- is down significantly. chemicals and refined products. But we ethisphere.com/wme2010 ance and our MBM® culture. “On top of that, there is a lot of political also need to look for new opportunities “That sounds easy, but I assure you, it and regulatory uncertainty. Any num- in new or emerging markets, such as ber of proposals – including emissions renewable fuels. requires considerable effort. trading systems, greenhouse gas regula- “That will help us to protect and en- “Every one of our employees, myself tions, low-carbon or renewable fuel hance our competitive position while included, has an important role to play standards, and green chemistry – could also positioning us to take advantage of in building our future by making this dramatically reshape our business.” step-out opportunities,” he said. vision a reality,” he said. www.fhr.com this issue… Koch Fertilizer goes global pg 3 Top product for 2009 pg 6 Energy leaders pg 4 Perspective: Steve Feilmeier pg 8 Postal Pipeline Letters may be edited for length or clarity I am ashamed that my former organi- zation [Greenpeace, which released a report criticizing KII on March 30] is harassing you in such an abusive manner. I long ago left Greenpeace when I real- ized I could no longer influence their science policy even though I was the only International Director with any formal science education. My small firm, Greenspirit Strategies, is Friends and family now have an easy way to access market-based perspectives on public policy issues important to dedicated to developing an alternative Koch companies and all of us as employees. Just visit www.kochind.com and click on Viewpoint. Employees will environmental policy platform based find even more information at http://kcief.khc.local/. on science and logic. Conservancy’s recent effort to bring in On behalf of WSU, I want to express We do not believe there is any cause for the bison from South Dakota. our gratitude for Koch companies’ alarmism about the earth’s climate and Thank you for all you and the Founda- recent contribution to support the we are skeptical about the assertion that tion have done to help the Tallgrass global warming is caused by human activity. Kansas Science Olympiad. Park. You are a tremendous asset for The generosity Koch has provided this We work with a wide range of compa- Kansas with the support you provide for nies and industry associations in energy, so many worthy projects and programs. program is greatly appreciated, and your agriculture, forestry, mining, fisheries and dedication to our young people and Dolph C. Simons, Jr., publisher chemicals. their future is beyond measure. Lawrence Journal-World Even though one of our aims is to reduce Lawrence, Kan. Again, thank you for all you do for the dependency on fossil fuels, we are well university and our students. aware of the important role they play, and will continue to play, in supporting our On behalf of the Mendota Heights and Donald L. Beggs, president civilization. West St. Paul Police Departments, we Wichita State University would like to thank you for giving your Wichita, Kan. Patrick Moore, Ph.D. time to make our Citizen’s Police Acad- Chairman and chief scientist emy a success. Greenspirit Strategies Ltd. We very much appreciate the Founda- Vancouver, British Columbia Our students really enjoyed their experi- tion’s grant of $76,000 to continue our ence at Flint Hills Resources. Your pas- education programs. sion for your work and the facility This grant will be allocated to two profes- really shines through. sional teacher seminars in spring and fall We look forward to coming to this year, a Saturday Academy, and a com- FHR again next year. munity forum with an eminent historian. Brian Convery We thank you for your confidence in us John Hinderscheid and your increased support. Citizen Police Academy Mary Caslin Ross, executive consultant West St. Paul, Minn. The Gilder Lehrman Institute of American History Thank you for your participation New York, N.Y. and for helping sponsor the Wild- life Habitat Council’s 21st Annual Symposium. Discovery April 2010 | Volume 16 | Number 2 Editorial Board Questions? Comments? I received a Christmas card from Koch Your support greatly contributed toward Philip Ellender Contact: Rod Learned with a great picture of several bison on the excitement and success of this Rich Fink 316.828.6136 Jeff Gentry [email protected] the front of the card. member-driven event. Dale Gibbens Mary Beth Jarvis Publication Design: I have been particularly interested in Jared Mott Charles Koch Deanna Bauman Jim Mahoney Koch Creative Group the Tallgrass Prairie National Preserve Wildlife Habitat Council Dave Robertson for many years, and in the Nature Silver Spring, Md. www.kochind.com ©2010, Koch Industries, Inc. Koch is an EOE. M/F/D/V 2 International News Geelong - Koch Fertilizer has leased a large storage Ariake - This Japanese-built reactor was recently installed at Flint Hills Resources’ Corpus Christi, Texas, refinery. FHR will soon facility at this Australian port. be able to upgrade high-sulfur diesel to ultra-low-sulfur diesel as well as handle additional feedstocks. Australia – Koch Fertilizer’s global Across the equator in Brazil, Koch Japan – A Japanese-built reactor is now expansion plans have taken a major step Fertilizer and Rocha TOP are building part of a new diesel desulfurization unit at forward with the announcement of four a warehouse facility in Paranagua where FHR’s West Plant in Corpus Christi, Texas. new projects in Latin America, Europe Koch Fertilizer will have 57,000 metric The enormous reactor was built at the and Australia. tons of dedicated storage space for urea. Hitachi-Zosen Ariake Works. It weighs These projects follow on the heels of an Construction on that project should be about 347 metric tons and is 100 feet long. complete early next year. announcement earlier this year involving It was shipped from Ariake to Shimono- a Koch Fertilizer facility in Sète, France. And in the U.K., Koch Fertilizer and the seki, Japan, where it was transferred onto “We’re assembling a truly global, deep- Bristol Port Co. have agreed to more a merchant vessel. water terminal network,” explained Steve than triple the storage space of an exist- ing fertilizer facility in Avonmouth. Getting the reactor across the Pacific Packebush, president of Koch Fertilizer. was a multi-national effort. The vessel “This will allow us to meet different kinds When completed later this year, that for this voyage, the Leopold Staff, is of demand throughout the year and expansion will include new blending co-owned by the Chinese and Polish greatly diversify our product offerings.” facilities, electronic weighbridge systems governments. and computerized product handling. Koch Fertilizer has traditionally focused It took five weeks to ship the reactor across on the North American market, where “Thanks to all of this,” Packebush said, the Pacific, through the Panama Canal and demand is highly seasonal and the range “we believe our terminal distribution up to the Gulf Coast.
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