Covestro plans world-scale MDI expansion in China and considers second plant in UAE

Covestro has announced plans to invest in a new world-scale methylene diphenyl diisocyanate (MDI) production train at its integrated site in Shanghai, China, while also launching a feasibility study for a similarly sized facility in the United Arab Emirates.

The strategic investment program is intended to reinforce the company's position in the global MDI market and improve long-term supply security for customers. The Shanghai expansion will add a production train with annual capacity of 660 kilotonnes, with start-up targeted for the end of the decade. The UAE study will assess the potential for a comparable facility based on Covestro's existing partnership with TA'ZIZ and Fertiglobe in Al Ruwais Industrial City.

According to Covestro, both new production trains are designed to achieve operational net-zero greenhouse gas emissions for Scope 1 and Scope 2 emissions.

"This investment program is a clear commitment to our customers and to our long-term growth in the MDI market," said Dr. Markus Steilemann, chief executive officer of Covestro. "We see strong and sustained demand, and at the same time increasing requirements for supply reliability. With these planned investments, we are strengthening our ability to serve our customers at scale while leveraging our technology and operational strengths. XRG's long-term commitment provides the right foundation to execute these projects and enables us to leverage integrated value chains, strengthen supply resilience and compete at a global scale."

Covestro said long-term demand for MDI is expected to continue growing, driven by applications including energy-efficient building insulation, household appliances and sports and lifestyle products, particularly in Asia and the Middle East. The company believes demand growth will outpace new industry capacity, increasing the need for reliable large-scale production.

The planned Shanghai investment includes not only the main MDI production unit but also upstream plants and supporting infrastructure to manufacture key intermediates on site. The facility will employ Covestro's proprietary AdiP technology, which the company said significantly reduces energy consumption.

"Our Covestro Integrated Site Shanghai combines strong reliability with proven capabilities in delivering complex projects," said Dr. Thorsten Dreier, chief technology officer of Covestro. "The new MDI train will improve overall production efficiency and underlines our ambitions to reach operational climate neutrality. This is also achieved thanks to our proprietary AdiP technology, which has been successfully demonstrated at industrial scale in Germany."

For the UAE project, Covestro said the feasibility study will examine opportunities to integrate with the developing industrial ecosystem at Al Ruwais. The company said a facility there would complement its existing regional manufacturing strategy while strengthening supply security for customers worldwide.

"The UAE offers unique opportunities to build an efficient and future-oriented production ecosystem," said Dreier. "By evaluating a new world-scale MDI facility in close collaboration with our local partners, we are exploring ways to complement our global asset network and capture long-term growth with competitive and sustainable operations."

Photo: an aerial view of Covestro's Integrated Site Shanghai Credit: Covestro

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