Urethane Blog

Covestro Pauses MDI Plant

November 7, 2022

Covestro Pauses Investment Project for World-Scale MDI Plant

Published: Nov. 7, 2022 at 5:42 a.m. ET

By Pierre Bertrand

Covestro AG said Monday that it has paused an investment project for a new world-scale methylene diphenyl diisocyanate, or MDI, plant.

Citing disruptions to the global economy caused by the war in Ukraine, Europe’s energy crisis and growing inflation, the German polymer manufacturer said its decision means it hasn’t yet decided where the plant will be built.

“Facing an increasingly volatile economic environment, we must ensure that we make the best decision for the company economically and strategically”, Covestro Chief Executive Markus Steilemann said. “Thus, we pause the project for the moment and reassess it at a later time,” he said.

It is the second time since early 2020 that the company has paused the project. When it had resumed in 2021, the company said it was considering building the plant in either the U.S. or China with commission planned for 2026.

The suspension of the investment doesn’t represent a change in Covestro’s long-term growth strategy, the company said Monday, adding that it continues to see significant growth in global demand for MDI driven by energy-efficient construction trends.

MDI is a raw material used for the production of polyurethane insulation which can reduce a building’s heating and cooling needs by up to 70%, according to Covestro.


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