On July 1, Covestro revealed it will construct a new MDI production facility with an annual capacity of 660,000 tons at its integrated production site in Shanghai. The facility is expected to begin operations by the end of the 2030s. The company is also conducting a feasibility study for a similar-sized MDI production facility in the United Arab Emirates (UAE).
This investment is part of a long-term strategy to respond to increasing global demand for MDI and to strengthen regional production networks. The initiative is supported by strategic investor XRG.
MDI is a key raw material for rigid polyurethane foam, used in applications such as building insulation, home appliances, food preservation, automotive, and sports and lifestyle products. Covestro noted that demand in Asia and the Middle East is rising, necessitating an expansion of production capacity.
Markus Steilemann, CEO of Covestro Group, stated, "We will expand our production capacity and establish a stable product supply system to meet the growing global demand."
Covestro plans to build an integrated production system in China that includes not only the main MDI production facility but also upstream processes for key intermediates and related infrastructure. The company aims to enhance energy efficiency by applying its proprietary AdiP process.
The new facility is designed to operate with net-zero emissions based on Scope 1 and 2 standards. The facility under consideration in the UAE will also be developed on a low-carbon production structure.
Thorsten Dreier, Chief Technology Officer of Covestro Group, remarked, "The Shanghai integrated production site is a major production hub with experience in executing large projects. The new MDI facility will enhance production efficiency and support our operational carbon neutrality goals."
The feasibility study in the UAE will explore collaboration possibilities with TA’ZIZ and Fertiglobe, based on the chemical industry ecosystem within the Al Ruwais industrial complex. Key considerations include access to renewable energy, stable supply of essential raw materials like chlorine and ammonia, and the potential for an integrated chemical production platform.
Covestro currently operates production sites in key regions across Europe, Asia, and North America. Through this investment program, the company aims to expand its global production network and strengthen its supply chain alongside existing facilities, such as the Baytown site in the United States.
Additionally, Covestro announced last month that it will begin developing technology for the continuous production of bio-based aniline.
* This article has been translated by AI.
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