- Highly attractive MDI market with long-term growth prospects
- New 500 kilotons MDI plant to satisfy demand and accompanyindustry growth
- NAFTA MDI capacity to reach 740 kilotons per year by end of 2024
- Extending Covestro´s regional and global MDI leadership position
Covestro accelerates its investment activities to capitalize on the strong MDImarket growth. Today, the Supervisory Board of Covestro has approved aninvestment of around EUR 1.5 billion to build a new world-scale MDI plant inBaytown, USA. This investment at the existing site in Baytown is the largestsingle investment in the history of the company. Total capacity of the new trainwill be 500 kilotons MDI per year, start of production is expected in 2024. At thesame time an older, less efficient MDI unit of 90 kilotons production capacity willbe closed. Thus, total MDI capacities of Covestro in the NAFTA region will reacharound 740 kilotons per year making Covestro the industry capacity leader inthe region by 2024. With that, Covestro will also strongly underline its globalindustry capacity leadership position.
“Demand for innovative MDI materials will continue to grow for the foreseeablefuture and likewise promises attractive capacity utilization rates. We havealready announced a significant increase in capital expenditures, now it’s time toput it into action”, said CEO Dr. Markus Steilemann. “With the new MDI train inBaytown, we will further strengthen our global leading position in Polyurethanes,even better serve our customers and create long-term shareholder value.
”MDI market with attractive prospects
The global MDI market is expected to grow by about 5% per year in the longterm,outgrowing the world’s global domestic product (GDP) by about2 percentage points. Key MDI market drivers include the substitution of lessperforming and less sustainable materials as well as global megatrends such asan increasing demand for energy efficient insulation solutions. MDI is aprecursor for rigid foam, which is an excellent insulation material and is used, forexample, in buildings and refrigerators. The expected global MDI demandgrowth translates into the need for approximately one additional world-scaleplant per year.
Although Covestro is already doubling its MDI production capacity inBrunsbuettel (Germany) from 200 to 400 kilotons per year in the second half of2019, the strong growth in demand creates further significant marketopportunities. Therefore, the investments – which are part of the alreadyannounced investment increase of up to EUR 1.2 billion per year for the nextthree years – will help Covestro to maintain and strengthen its leading positionand support further profitable growth. Moreover, Covestro aims at furthercapitalizing on its technical and innovation capabilities as well as on its leadingcost position.