Production investment to meet MDI Demand

Production investment to meet MDI Demand

Covestro has just announced that it will continue production in Tarragona, Spain beyond 2020. The company will invest around EUR 200 million to increase cost competitiveness at the site. As a first step, it intends to build its own chlorine supply to ensure a highly efficient, sustainable and independent supply of this crucial raw material.

Covestro will also debottleneck its local MDI (methylene diphenyl diisocyanate) plant, increasing production capacity by 50,000 metric tons to around 220,000 metric tons per year. MDI is a precursor for rigid foam, an insulation material used, for example, in buildings and refrigerators.

“We are fully committed to the MDI market and our site in Tarragona. By debottlenecking and establishing our own chlorine supply, this site will become an even more efficient and competitive plant within our network,” says Chief Executive Officer Patrick Thomas.

‘We are fully committed to the MDI market and our site in Tarragona.’

Debottlenecking will be carried out up to 2022, while chlorine production is planned to begin at the end of 2020. External sources will supply the operation until then. For its new chlorine production, Covestro intends to use state-of-the-art energy efficient technology, which will make the production of key raw materials and subsequently overall production more efficient.

“This is another step within our already announced long-term investment strategy following our smart capex approach to extend our capacities. It is a cornerstone of our global growth strategy,” says Chief Commercial Officer Dr Markus Steilemann. “We anticipate demand for MDI will continue to outgrow supply and this enables us to meet the additional growth of our customers and also supports our own organic growth.”

The investment will further leverage the company’s existing global production network and strengthen its existing commitment to MDI. Covestro is already doubling its capacity at Brunsbuettel in Germany in order to produce up to 400,000 metric tons of MDI annually by the end of 2018.

“We are very conscious of the market challenges the industry is facing and remain fully committed to further supporting our customers by maximising capacity through production increases in Tarragona and Brunsbuettel,” says Hermann-Josef Doerholt, Senior VP Commercial Operations PUR, EMEA/LATAM.

“This is a significant step forward, enabling us to broaden our production base and become the capacity leader for MDI by 2020.”

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