Covestro build €1.5 bn world-scale MDI plant
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Covestro to build €1.5 bn world-scale MDI plant

7:14 AM, 10th October 2018
Covestro’s Baytown site.
Covestro's Baytown site.

LEVERKUSEN, GERMANY: Covestro has approved an investment of around €1.5 billion to build a new world-scale methylene diphenyl diisocyanate (MDI) plant in Baytown, Texas. This investment at the existing site in Baytown is the largest single investment in the history of the company.

Total capacity of the new train will be 500 kilotons MDI per year, start of production is expected in 2024. At the same time an older, less efficient MDI unit of 90 kilotons production capacity will be closed. Thus, total MDI capacities of Covestro in the NAFTA region will reach around 740 kilotons per year making Covestro the industry capacity leader in the region by 2024. With that, Covestro will also strongly underline its global industry capacity leadership position.

The global MDI market is expected to grow by about 5 percent per year in the long-term, outgrowing the world's global domestic product (GDP) by about 2 percentage points. Key MDI market drivers include the substitution of less performing and less sustainable materials as well as global megatrends such as an increasing demand for energy efficient insulation solutions.

Though Covestro is doubling its MDI production capacity in Brunsbuettel (Germany) from 200 to 400 kilotons per year in the second half of 2019, the strong growth in demand creates further significant market opportunities.

Thus, the investments – which are part of the already announced investment increase of up to €1.2 billion per year for the next three years – will help Covestro to maintain and strengthen its leading position and support further profitable growth. Moreover, Covestro aims at further capitalizing on its technical and innovation capabilities as well as on its leading cost position.

"Demand for innovative MDI materials will continue to grow for the foreseeable future and likewise promises attractive capacity utilization rates. With the new MDI train in Baytown, we will further strengthen our global leading position in Polyurethanes, even better serve our customers and create long-term shareholder value,” said Dr Markus Steilemann, CEO, Covestro.

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