K. C. Irving

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Kenneth Colin Irving, OC, ONB (March 14, 1899-December 13, 1992) also known as K. C. Irving was born in Bouctouche, New Brunswick. He was one of Atlantic Canada's foremost entrepreneurs of the 20th century and ranks as one of the world's leading industrialists. Today the Irving group of companies are owned and operated by his three sons, James, Arthur, and Jack, and their respective children.

As a youngster, K.C. Irving was viewed as a tough kid from a rough sawmill town on the Northumberland Strait. There are many accounts of his rough and tumble attitude in schoolyard fights. He began his entrepreneurial streak early, but this was tempered by the dawn of the First World War. K.C., along with several friends attempted to enlist but his father put an end to it by enrolling him at Acadia University - an association continues between this institution and the family to this very day. Irving left Acadia before graduation and took a cross-country adventure to British Columbia before returning to Bouctouche. His father did not oppose his second attempt to enlist and Irving entered the Royal Flying Corps as a fighter pilot, although he never saw action as the war ended shortly thereafter. Following the war, he returned home to Bouctouche and began a series of events that would change the course of history in the Maritimes forever.

In 1989, he was made an Officer of the Order of Canada.

Contents 1 Irving Oil Limited 2 J.D. Irving Limited 3 Diversification and vertical integration 4 Privately owned 5 Criticism 6 Irving family wealth

[edit] Irving Oil Limited

As a young man, K.C. Irving sold Ford automobiles in Kent County and founded Irving Oil in 1924 during the infancy of the automobile age before moving to Saint John. Irving Oil would expand from a small network of rural gas stations into the primary petroleum retailer in Atlantic Canada, eastern Quebec and northern New England, with several thousand gas station/convenience stores, the largest oil refinery in Canada, a fleet of ocean-going tankers, and a network of bulk oil storage terminals throughout the region.

[edit] J.D. Irving Limited

It was the growth of Irving Oil which largely financed K.C. Irving's other endeavours. Several years after starting Irving Oil, K.C. took over his father's sawmill company in Bouctouche, J.D. Irving Limited, which was subsequently expanded many times. Today JDI is the largest single landowner in New Brunswick, Nova Scotia and Maine (JDI has also been identified as being one of the largest foreign land-owners in the United States). These forest lands feed several pulp and paper plants and sawmills which in turn feed the company's newsprint, tissue, and diaper factories throughout New Brunswick, Nova Scotia, Maine, New York, Quebec and Ontario.

[edit] Diversification and vertical integration

As the Irving industrial empire expanded during the Second World War and the post-war era, K.C. Irving purchased shipyards and started various construction, food processing, media, hardware, building supplies, transportation, engineering and construction companies - all of which are vertically integrated, meaning that each Irving company purchases the services of other Irving companies, keeping profits wholly within the conglomerate.

[edit] Privately owned

Irving companies are completely privately owned, and therefore all major business decisions are made by the family-members/owners. This has traditionally been a weakness among many family-owned empires. However, the Irvings have proven their ability to react to market situations much more quickly than their publicly traded competitors, a primary reason for their maintaining market share in so many industries throughout northeastern North America. An example can be seen in the fact that Irving Oil undertook significant upgrades and expansions to its refinery in the mid-1990s to produce low-sulphur gasolines, fully a decade ahead of the rest of the North American oil industry. As a result, Irving has been able to capitalize on the growing need for low-emission fuel in California and other U.S. markets (delivered by its own ships).

The conglomerate operates with considerable latitude which the Irving family's wealth permits—operating somewhat as a maverick to the consternation of many of Central and Western Canada's business leaders. Irving Oil, J.D. Irving and all subsidiary companies are actively supporting Canada's ratification and implementation of the Kyoto Protocol, since the family has invested considerable funds into environmental controls and alternative energy for its operations and wishes to capitalize on these investments at the expense of its slow-to-respond publicly traded competitors. J.D. Irving's food processing plants in Prince Edward Island are looking to build one of the largest wind farms in Canada in that province to completely power their operations, and many Irving-owned sawmills and factories in the rest of northeastern North America are rapidly adopting co-generation and solar/wind power to complement current energy usage. The Irving family is also hoping to take advantage of deregulation of utility markets in the region by building natural gas-fired electrical generating stations and is currently building a liquified natural gas terminal near its Saint John refinery.

[edit] Criticism

The Irving group of companies, while incorporating state of the art technology which helps to keep their edge in a competitive market, are notorious for being cheap with suppliers and are extremely demanding for their management and line workers.^{[citation needed]} Organized labour is tolerated (and sometimes encouraged) so long as each company's profits and the family's objectives come first.

The Irvings have an almost complete monopoly in print media in New Brunswick, owning all English and French daily newspapers but one (L'Acadie Nouvelle) and most English weekly and community papers. In the 1970s, when this concentration was limited to only 4 English daily newspapers, a federal commission of inquiry into media concentration took aim at the Irving family's control. Today print media across Canada has experienced a much higher degree of concentration than existed with Irving in New Brunswick during the 1970s, and the case with Irving was one of the first in the nation. The Irving family ostensibly allows their media holdings to operate relatively independently with the only oversight supposedly being in their finances. All Irving print media sole source the purchase of newsprint from J.D. Irving's newsprint mill in Saint John.

Irving did have a near monopoly in media in New Brunswick well into the 1980s when they owned several English radio stations and CHSJ-TV, the only CBC affiliate in the province. Irving also started MITV (Maritime Independent Television) as a competitor across the Maritimes with the ATV network. The CBC affiliate was sold to the public broadcaster in 1994 at the same time as MITV was sold to Global Television.

Many of the forest management practices at J.D. Irving have come under fire from environmentalists. While JDI has received praise from its lumber retailers and from government regulators, environmentalists point out that the company's tree farming practices have led to an unprecedented industrialization of the forests of northeastern North America, and in turn have led to a decline in tree species variety.^{[citation needed]} Logging roads and erosion problems are also frequently criticized.

The Irving family has long been identified politically with the Liberal Party of Canada and the New Brunswick Liberal Party—a tradition dating to K.C. Irving's father, James Dergavel Irving. It should be noted that the Irvings are extremely private in such matters; however, their tremendous wealth holds sway over politicians of all stripes, federally and provincially. As well, it is estimated that 1 in 10 New Brunswickers are employed by an Irving subsidiary, so it is as reasonable for governments to give tax and other concessions to the conglomerate as it is for the Irvings to work to remain friendly with the government of the day.

K.C. Irving fought many battles with the federal government over income tax, business tax and inheritance tax policies. In 1972, following a particularly tough series of battles, K.C. left Canada suddenly, established himself as a resident of Bermuda, and left his sons in control of the daily operations of the conglomerate, although he remained as majority shareholder. From 1972 until his death, K.C. would visit New Brunswick for "6 months, less a day" each year. K.C. Irving died at home in Saint John and was buried alongside his first wife in Bermuda. After his death, it was revealed that he had willed the conglomerate to his three sons only upon condition that they become non-Canadian residents for tax purposes. Since all three sons have remained in Canada, it is assumed that this part of K.C.'s will has been reinterpreted somehow.

[edit] Irving family wealth

Many business magazines place the combined book value of the Irving empire at an estimate of approximately $4–5 billion (CAD), ranking it third in Canada. However, since the conglomerate is privately held and the family is private with respect to financial matters, no information on net worth or possible partial ownership by other parties is available. Observers have only the tangible values of real property and industrial assets upon which to base their estimates without any ability to assess the value of cash reserves or outstanding debt and obligations. It is quite likely that the actual net value of the Irving family is much higher than current estimates once offshore holdings and investments are taken into account, placing the family among the world's wealthiest.

The family has long maintained their secrecy while actively supporting many community initiatives. Their philanthropy has long been rumoured in many projects, but the first time it was publicly acknowledged was during the early years of the Université de Moncton, an institution that K.C. came to support in recognition of the support that members of the Acadian community had given to his companies. Since the mid-1980s, the Irving companies have become much more visible in their charitable actions, partly out of a public relations strategy; however, there are many examples of daily philanthropy which continue to this day that are not made public.^{[citation needed]}