Covestro A.G. is delaying work to expand its MDI plant in Baytown, a move that will halt work on the MDI-500 project for 18-24 months.
In a Jan. 21 news release about the decision the company cited “challenging global market dynamics” for the halt. However, it stressed that there were no plans to leave the MDI market, and that there was no cancelation of the project.
“The decision fully is in line with Covestro’s standard investment procedures, through which investment plans are regularly reviewed against the backdrop of changing economic and market conditions,” Covestro officials said in the release. “While this project temporarily is on hold, the company remains firmly committed to the long-term growth potential of the MDI market and will continue to provide reliable MDI supply for its customers.”
The decision to build the plant first was disclosed in late 2018, at an estimated cost of $1.6 billion. It was slated to be fully operational by 2024. Covestro added that it remains committed to Baytown as the “ideal location” for the expansion of its North American MDI capacity.
In its third quarter for the 2019 fiscal year, Leverkusen, Germany-based Covestro posted weak results in the third quarter of the year, due in part to growing competition, a pricing shift, and high prior-year comparison levels.
Over the first nine months of the year, Covestro’s sales fell 15.8 percent to $10.5 billion, mainly as a result of lower selling prices, the company said in an Oct. 28 statement.