Koch Engineered Solutions Opens First Factory in China: a Smart Manufacturing Operation for Decarbonization Hardware

Formnext Germany

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Koch Engineered Solutions (KES), a subsidiary of Koch Industries, one of the world’s largest privately held companies, recently opened its first wholly owned manufacturing facility in China. Located in the Changshu Economic & Technological Development Zone (CETDZ) in southeastern China, the 60,000 square meter (over 650,000 square feet) factory includes a fully automated production line and is described as “one of the most sophisticated manufacturing facilities of its kind.”

Via a portfolio of over a dozen brands, KES produces a wide gamut of equipment for decarbonization in manufacturing and power generation processes. For instance, one KES subsidiary, John Zink Hamworthy Combustion, specializes in producing its trademarked Smart Combustion platform, a system for automating the digital management of industrial equipment, especially for the purposes of emissions reduction.

At the opening ceremony for the new KES facility in Changshu, China, the president of KES, Dave Dotson, said, “This investment reflects KES’ strong confidence in the future potential of the Chinese market, which has long been identified as a crucial market for our business. The Chinese manufacturing facility is integral to supporting our global operations and creates virtuous cycles of mutual benefit with our partners within the industrial value chain.”

According to the press release about the new facility, the VP of KES Equipment Technology & Services (ET&S) Asia Pacific, David Chang, “expressed his enthusiasm for aligning KES’ solutions with the evolving trends in the Chinese market, especially in the areas of energy-efficient industries and technological innovation. He emphasized the company’s commitment to forging enduring and mutually beneficial partnerships with Chinese businesses.”

For the additive manufacturing (AM) sector, specifically, this development may shed some light on what Koch Industries’ long-game is, for the hefty investment into AM that the organization has made in recent years. To name just a couple of examples of such investment, the company — through two different investment arms — led a $160 million financing round for Desktop Metal in 2019, and led a $102 million round for AM metal powders supplier 6K, a little over year ago.

With its strongest foothold being in the petrochemicals sector, Koch’s gradual rebrand into a decarbonization solutions provider is both shrewd as well as galling. It is “galling” only because, as I noted in my post from May 2022 about Koch Investments Group’s leading 6K’s Series D round, “the Koch family is well-known for contributing large amounts to organizations that deny human responsibility for climate change. …[B]eginning in 2016, Charles and David Koch reportedly started making millions of dollars of donations into efforts to kill the electric car.”

KES’ patented Twisted Tube heat exchanger

That last detail is so significant in the present context, of course, insofar as the EV market is the crux of China’s manufacturing growth. Thus, leaving aside the fact there are now vast numbers of individuals who have apparently been tricked into thinking they’re against EVs, it seems not unreasonable to wonder if all the interests pushing the anti-EV agenda were ever truly opposed to the idea of electrification. Or, was it all just a breathtakingly cynical effort to create barriers to entry for every company that wasn’t in on the ruse?

Arguing in favor of the latter interpretation is a deal reported yesterday by the Saudi state news agency: Saudi Arabia’s Ministry of Investment has signed a $5.6 billion agreement with Human Horizons Technology, a Chinese EV manufacturer. This may seem less striking than the Koch “pivot”, given that, in the past several years, Saudi Arabia’s government has shown increasing support for expanding its investments into electrification, with EVs at the forefront of that strategy. Nevertheless, it’s worth remembering that, before all the most visible opponents to taking action on climate change spontaneously, simultaneously changed their minds, their funding of disinformation campaigns on the issue did quite a lot to prevent real progress.

In that case, the lesson here is that, in fact, there is absolutely nothing genuinely left standing in the way of a renewables boom: and that probably does much to explain why, now that it is finally happening, it seems to be taking off so quickly. Companies in the AM sector with a focus on green energy should double and triple down on that business plan, even if sometimes it means collaborating with entities that you could’ve sworn were determined to stand in your way.

Images courtesy of KES

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