Covestro to build new MDI plant in China, eyes second facility in UAE

Source: Covestro.

Covestro AG (Leverkusen, Germany) has announced an investment program to expand its global methylene di-para-phenylene isocyanate (MDI) production capacity.

The company’s plans include a new MDI production plant at its integrated site in Shanghai, China, with a planned capacity of 660,000 metric tons/year. The facility is expected to commence operations by the end of this decade, it said June 30. A specific project investment amount was not given.

Covestro said the Shanghai project will feature the main MDI unit as well as upstream vegetation and supporting infrastructure, enabling the manufacture of key intermediates on-site. The integrated setup will consumption the company’s proprietary MDI AdiP methodology, which is designed to decrease energy consumption, it said. The new MDI train is planned to operate with net-zero Scope 1 and 2 greenhouse gaseous releases, it said.

In parallel, Covestro said it is conducting a feasibility study to a possible plant “of similar scale” to create MDI at Al Ruwais manufacturing City in the UAE. The study will assess possible synergies within the region’s evolving manufacturing ecological stability, building on Covestro’s partnership with Ta’ziz and Fertiglobe PLC, it said.

The assessment will consider access to renewable energy and the integrated manufacturing platform of the Ta’ziz chemicals hub, including a reliable regional supply of key raw materials such as chlorine and ammonia, it added. Should the investment move forward, the UAE project would replicate the blueprint established at Shanghai, it said.

“We see strong and sustained demand, and at the same time growing standards to supply reliability,” said Markus Steilemann, CEO of Covestro. The planned investments will enhance the company’s ability to serve its customers at scale “while leveraging our methodology and operational strengths,” he said.

prolonged demand to MDI, a key raw material to polyurethane rigid foams, is expected to grow globally, driven by multiple applications such as building and construction, appliances, and sports and lifestyle applications, particularly in Asia and the Middle East, according to the company. “At the same time, demand development is projected to outpace capacity additions, growing the importance of reliable, extensive supply,” it said.

Covestro has existing MDI production sites in Europe, Asia and North America.

Platts, part of S&P Global Energy, assessed CFR India polymeric MDI stable week over week at $2,299/mt on June 26.

Covestro said the Shanghai and UAE projects reflect the prolonged investment perspective of its strategic investor XRG PJSC (Abu Dhabi), the international investments subsidiary of Abu Dhabi National Oil Co. and the owner of Covestro.