CEO LETTER

The connection between the safety of our people—the unwavering foundation of our company—and the success of our business is undeniable. But our Zero Harm culture goes beyond the safety of our people. We also have a responsibility to drive our impact on the environment to Zero. We owe it to ourselves, our families, our communities and our world to behave in an environmentally responsible manner of the highest standard.

The spirit of collaboration and innovation that brings our Zero Harm / Zero Waste culture to life fosters efficiency and process excellence, decreases our impact on the environment and allows us to create value for our stakeholders today and tomorrow. This was clearly reflected in 2018, which saw our company achieve our highest safety rating ever, our highest sales ever and our highest adjusted profitability ever. In addition, we continued our trend of greenhouse gas and energy usage reductions. Greenhouse gas emissions decreased 48 percent, and energy usage declined 41 percent, respectively, from our 2012 baseline.

The theme of this report is “Our Success Is Circular.” Why?

As a world-leading supplier of wood treatment solutions, the circular nature of our business starts with our raw materials, the majority volume of which are waste streams generated by other industries (including scrap copper and coal tar) and renewable resources (trees). In fact, we purchase 35 million pounds of scrap copper or other compounds containing copper, all of which is postconsumer or post-industrial in nature. This places Koppers in the center of what is known as the “circular economy” that emphasizes the “reduce, reuse, recycle” mentality that continues to frame global conservation efforts.

“We are flipping the assumption that in business, profit drives behavior. At Koppers, we put people first. People drive behavior, and profit follows.” – President and CEO Leroy Ball

Our wood-treatment solutions, while playing an incredibly important role in our global infrastructure across multiple industries, also play an important role in the carbon cycle. Treating wood significantly increases its useful lifespan, allowing the carbon stored within the wood to be immobilized for up to 50 years, keeping it out of the atmosphere and limiting carbon’s adverse effects on the environment.

In 2018, we advanced our circular business model even further through our acquisitions—M.A. Energy Resources (renamed Koppers Recovery Resources) and Cox Industries (renamed Koppers Utility and Industrial Products). Both businesses add product life cycle management capabilities to help solve our customers’ challenge of responsibly disposing of end-of-life crossties and utility poles by repurposing used wood products—including as a fuel source. This reduces the end-of-life impact of our ties and poles, contributing to greater product sustainability.

In this report, you can learn more about how our 2,200-plus employees bring the benefits of our circular business model to life as they turn unusable byproducts into wood-treatment solutions, utilize renewable resources, convert end-of-use products into sources of fuel and reduce carbon in the atmosphere—all while keeping safety at the forefront and ensuring that our culture of Zero Harm / Zero Waste continues to grow in the years to come.

Sincerely,


Leroy M. Ball
President and Chief Executive Officer