Covestro Announces Plans for New World-Scale MDI Train in China and UAE Feasibility Study

Covestro has announced a strategic investment programme to strengthen its global leadership in the MDI market and enhance long-term supply security for customers worldwide. The initiative includes plans to construct a new MDI production train with an annual capacity of 660 kilotonnes at its integrated site in Shanghai, China, with operations expected to commence by the end of the decade. In parallel, the company is undertaking a feasibility study for a similarly scaled MDI facility in the United Arab Emirates. Supported by XRG, both projects underscore Covestro’s long-term growth strategy and leverage its global chemicals platform to strengthen integrated value chains and improve regional supply resilience.

Supporting the Growing Global MDI Market

“This investment program is a clear commitment to our customers and to our long-term growth in the MDI market,” said Dr. Markus Steilemann, Chief Executive Officer of Covestro. “We see strong and sustained demand, and at the same time increasing requirements for supply reliability. With these planned investments, we are strengthening our ability to serve our customers at scale while leveraging our technology and operational strengths. XRG’s long-term commitment provides the right foundation to execute these projects and enables us to leverage integrated value chains, strengthen supply resilience and compete at a global scale.” 

Global demand for MDI (methylene diphenyl diisocyanate), a key raw material used in polyurethane rigid foams, is expected to increase steadily over the long term. Growth will be driven by rising demand across the building and construction sector for energy-efficient insulation; the appliance industry through modernisation and improved food chain efficiency; and expanding sports and lifestyle applications, particularly in Asia and the Middle East. As demand is projected to outpace future capacity additions, it will become increasingly important to ensure a reliable, large-scale supply. Covestro is well positioned to meet this need through its global network of MDI production facilities across Europe, Asia, and North America.

China: Building on Proven Manufacturing Excellence

Covestro is preparing to expand its existing manufacturing site in China with a new MDI production train. The investment will include the main MDI unit, upstream facilities, and supporting infrastructure to produce key intermediates on site, creating a fully integrated production complex. The new facility will utilise Covestro’s proprietary MDI AdiP technology, which significantly improves energy efficiency. It is also designed to operate with net-zero greenhouse gas emissions across Scope 1 and Scope 2.

“Our Covestro Integrated Site Shanghai combines strong reliability with proven capabilities in delivering complex projects,” said Dr. Thorsten Dreier, Chief Technology Officer of Covestro. “The new MDI train will improve overall production efficiency and underlines our ambitions to reach operational climate neutrality. This is also achieved thanks to our proprietary AdiP technology, which has been successfully demonstrated at industrial scale in Germany." 

UAE: Assessing Strategic Ecosystem Benefits

Covestro's feasibility study for a potential MDI production facility in the United Arab Emirates will evaluate opportunities to leverage the emerging industrial ecosystem in Al Ruwais Industrial City, building on its previously announced partnership with TA’ZIZ and Fertiglobe. A world-scale facility in the region would complement the company's local-for-local production strategy while enhancing supply security for customers across global markets.

The study will assess access to renewable energy sources and the benefits of the integrated industrial platform at the TA’ZIZ chemicals hub, including a reliable local supply of key raw materials such as chlorine and ammonia. If approved, the project would build on the proven design and technology blueprint developed for the Shanghai facility.

XRG Supports Covestro’s Long-Term Growth Strategy

Both initiatives underscore Covestro’s commitment to pursuing long-term growth opportunities in the global MDI market through disciplined investments and sustainable value creation. As Covestro’s strategic investor, XRG provides a long-term investment perspective and global platform expertise to support this next phase of growth.

“The planned expansion in China and the feasibility study in the UAE show how we are targeting opportunities to strengthen supply resilience, enhance competitiveness and support customers over the long term”, Steilemann added. 

Source: COVESTRO