The Germany-based adhesive manufacturing company Covestro has reportedly announced that it would invest around €1.5 billion to construct a new advanced methylene diphenyl diisocyanate (MDI) facility in Baytown, Texas. As per trusted sources, the facility is expected to begin production of MDI in 2024.
Reportedly, the latest investment by Covestro would be the largest in its history. The company claims to have responded to the rising global demand for MDI which is a pre-requisite to manufacture rigid polyurethane foam utilized in applications such as insulation.
Chief Executive Officer of Covestro, Dr. Markus Steilemann was reportedly quoted stating that the unique MDI materials promise attractive capability utilization rates and the demand for the same would continue to expand in the forthcoming times. With the construction of new MDI train in Baytown, Covestro has put in significant capital expenditure and now the company would like to further solidify its leading position in the global polyurethanes space, Steilemann added.
Sources familiar with the development claim that the latest facility would produce about 500 kilotons of MDI each year. Moreover, the total MDI manufacturing capacity of Covestro in the NAFTA region is estimated to reach around 740 kilotons annually which would establish the company as the capacity leader by 2024.
Chief Financial Officer of Covestro, Thomas Toepfer has reportedly commented that the estimated supply is not sufficient to meet the anticipated growth in demand despite increased capacity. The company is confident to reach high utilization figures of the new capacities after commencing the facility and building on the prevailing procedures and infrastructure, Toepfer further added.
According to analysts, almost one additional world-scale facility is required to be built each year to satisfy the anticipated MDI demand globally in the forthcoming times. As per some estimates, the global MDI industry is forecast to grow by nearly 5 percent per annum.