Covestro announced on Tuesday that it will proceed with work on a world-scale methylene diphenyl diisocyanate (MDI) plant after suspending plans to build a unit in the US in early 2020.
The company had announced in January 2020 that it would halt work on its planned 500,000 tonne per year MDI plant at its Baytown, Texas, production complex, in the face of challenging global market conditions.
Work on a plant will move forward, Covestro CEO Markus Steilemann said on Tuesday, but the location is under review, with China mooted as a potential alternative to the US.
A decision will be announced at the next stage of project development, he added, with the plant expected to be commissioned in 2026, two years after the original forecast start date for the Baytown project.
The firm is also planning to expand its toluene diisocyanate (TDI) production by de-bottlenecking facilities in Dormagen, Germany, expected to be complete by 2023.
Raising Investment in Sustainable Growth
Also earmarked for investment are coatings and adhesives, and specialty films, with planned expenditure of €300 million and €200 million apiece by 2025, while the firm is planning more investment in the circular economy.
“In order to achieve our ambitious objectives and become fully circular, we are planning targeted capex spending of around €1 billion ($1.2 billion) on circular economy projects over the next ten years,” said Covestro CFO Thomas Toepfer.
Covestro is planning to increase capital spending over the next few years, with an estimated €800 million of investment this year expected to expand substantially in the near future, according to Toepfer.
In this context, Covestro expects global demand growth for the rigid foam precursor MDI and the flexible foam precursor TDI to increase to 6% per year until 2025. For MDI in particular, demand is meeting an already high utilization of industry-wide capacities, the company said.