Canadian Plastics

Covestro to build new world-scale MDI plant in Texas

The project, which is expected to cost approximately US$1.72 billion, is the largest single investment in Covestro's history.

October 12, 2018   Canadian Plastics

German polymer supplier Covestro AG has announced plans to build a new production unit for methylene diphenyl diisocyanate (MDI) at its existing site in Baytown, Texas.

The project, which is expected to cost approximately US$1.72 billion, is the largest single investment in the company’s history, Covestro said in a statement.

The new unit will have total capacity of 500 kilotons of MDI per year. It’s expected to start production in 2024, at which time Covestro will close an older, less efficient MDI unit with production capacity of 90 kilotons.

MDI is used in the manufacture of polyurethanes.

“Demand for innovative MDI materials will continue to grow for the foreseeable future and likewise promises attractive capacity utilization rates,” Covestro CEO Markus Steilemann said in the statement. “We have already announced a significant increase in capital expenditures; now it’s time to put it into action. With the new MDI train in Baytown, we will further strengthen our global leading position in polyurethanes.”

The global MDI market is expected to grow by about five per cent per year, Covestro said, with key market drivers including the substitution of materials that do not perform as well and do not have a good sustainability profile as well as global megatrends, such as increasing demand for energy-efficient insulation solutions.

Covestro is the former Bayer MaterialScience.


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