en.Wedoany.com Reported - Covestro has announced a strategic investment plan for methylene diphenyl diisocyanate (MDI), including the construction of a new MDI production facility with an annual capacity of 660,000 tons at its integrated site in Shanghai, expected to commence operations by the end of this decade. The company is also conducting a feasibility study to evaluate building another facility of similar scale in the United Arab Emirates (UAE), with each project investment estimated in the low single-digit billions.
Both projects reflect Covestro's long-term growth ambitions in the global MDI market and are supported by XRG, the investment arm of the Abu Dhabi National Oil Company (ADNOC). Since being acquired by the Abu Dhabi group last year, Covestro has been part of XRG, which, as a strategic investor, brings a long-term investment perspective and global platform understanding, viewing Covestro as a core cornerstone with the goal of expanding its high-performance materials and specialty chemicals business to rank among the top five chemical companies worldwide.
Covestro CEO Markus Steilemann stated that XRG's long-term commitment lays the foundation for project implementation, enabling the company to leverage integrated value chains, enhance supply security, and succeed in global competition. He further noted that this investment plan is a clear commitment to customers and the long-term growth ambitions of the MDI market. Covestro sees strong and sustained demand, coupled with increasing requirements for supply security. Through these planned investments, the company strengthens its ability to reliably supply customers on a large scale while leveraging its technological and operational advantages.
Covestro expects global MDI demand to continue growing in the coming years, driven by applications in energy-efficient buildings and renovations, modern household appliances, and leisure and consumer goods. Markets in Asia and the Middle East are particularly dynamic, with demand growth expected to outpace capacity expansion. Covestro is one of the world's leading MDI manufacturers, with a global production network spanning Europe, Asia, and North America.
Covestro plans to expand its Shanghai integrated site with a new MDI production facility, which includes the MDI production itself as well as additional units for key precursor products and infrastructure to enhance the site's integrated value creation. The facility will utilize the company's proprietary AdiP technology, which significantly reduces production energy consumption, and the new plant is designed to be operationally climate-neutral (Scope 1 and 2). Covestro Chief Technology Officer Thorsten Dreier stated that the Shanghai integrated site combines high reliability with proven capabilities in executing complex projects. The new MDI plant will improve overall operational efficiency and emphasizes the goal of achieving operational climate neutrality, thanks to the company's own AdiP technology, which has been successfully tested on an industrial scale in Germany.
Covestro is also evaluating the construction of a new MDI facility in the UAE through a feasibility study, which builds on the previously announced collaboration with TA'ZIZ and Fertiglobe. The study will examine synergies within the emerging industrial cluster at the Al Ruwais Industrial City. It will consider access to renewable energy and the integrated industrial platform of the TA'ZIZ chemical complex, including reliable local supply of key raw materials such as chlorine and ammonia. Steilemann added that the planned expansion in China and the UAE feasibility study demonstrate how the company is seizing opportunities to enhance supply security, improve competitiveness, and reliably supply customers over the long term.
