Europe shuts down 1.1 million tons! Covestro China to build another world-class MDI plant—whose market share is being seized?

On June 30, Covestro announced a major investment: it will construct a new world-class MDI production facility at its integrated site in Shanghai, China, with operations expected to commence around 2030. Almost simultaneously, the company is evaluating the feasibility of building a second MDI plant of equivalent scale in the United Arab Emirates (UAE), leveraging its existing ammonia supply collaboration framework with TA'ZIZ and Fertiglobe. Covestro’s current global MDI capacity stands at approximately 1.8 million tons, with production facilities located in Germany, Spain, the United States, China, and Japan. Its Shanghai site alone accounts for 600,000 tons annually and serves as its core production hub in the Asia-Pacific region. This announcement—of a new world-class MDI facility in Shanghai alongside the concurrent UAE feasibility study—signals an accelerated eastward shift in Covestro’s global capacity strategy. Its first major move post-acquisition This dual-track expansion marks Covestro’s first major capacity initiative following its acquisition by XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC). In October 2024, ADNOC and Covestro signed an investment agreement; by December 2025, XRG had completed its tender offer for Covestro, acquiring over 95% of its shares and advancing mandatory squeeze-out procedures and delisting. Covestro’s German headquarters, brand, and management remain operationally independent, serving as XRG’s core platform for high-performance materials and specialty chemicals. This ‘dual-track’ strategy thus represents the first concrete step in Covestro’s strategic transformation under ADNOC’s leadership. The UAE project did not emerge from nowhere. In May 2026, TA'ZIZ and Alpha Dhabi jointly announced plans to invest roughly RMB 68 billion (approx. USD 9.4 billion) in a new chemical complex in Ruwais Industrial City, Abu Dhabi—currently entering joint feasibility studies and market research phases. Concurrently, Covestro, Fertiglobe, and TA'ZIZ signed a tripartite memorandum of understanding (MoU) to jointly explore cooperation across the ammonia and nitric acid value chain. In the short term, Fertiglobe will supply ammonia to Covestro’s Chinese and U.S. plants; longer-term plans include evaluating low-carbon ammonia produced via carbon capture and green ammonia derived from renewable energy. This means the UAE MDI project already features a fully integrated industrial ecosystem—from raw material supply to production infrastructure. Turning to China: Covestro’s Caojing site in Shanghai completed a technical upgrade in 2025, raising its MDI capacity from 500,000 to 650,000 tons per year, complemented by carbon capture and storage (CCS) infrastructure delivering annual CO₂ emission reductions of 300,000 tons. The newly announced facility represents incremental expansion atop this 650,000-ton base—and its location remains…

Two blockbuster moves back-to-back! Covestro’s 1.32-million-ton MDI dual-track expansion + HDI acquisition reshapes the global polyurethane landscape

According to PlastiVision, German chemical giant Covestro has recently unveiled two major strategic initiatives: first, announcing a dual-track MDI capacity expansion totaling 1.32 million tons in Shanghai and the UAE; second, completing the acquisition of two HDI derivative production facilities previously owned by Vencorex—in Thailand and the United States. This rapid-fire sequence of strategic moves is profoundly reshaping the competitive landscape of the global polyurethane raw materials industry. 1.32 million tons of MDI expansion: A leap from 1.77 million to 3.09 million tons On June 30, 2026, Covestro officially announced its MDI strategic investment plan, comprising two key components: First track: A new 660,000-ton-per-year MDI plant in Shanghai. Covestro plans to build a new MDI production facility at its integrated Shanghai site, targeting commissioning around 2030. The plant will deploy Covestro’s proprietary MDI AdiP (adiabatic isothermal phosgenation) technology—significantly reducing energy consumption—and is designed to achieve net-zero greenhouse gas emissions (Scope 1 and 2). Beyond the main MDI unit, the investment includes upstream facilities and supporting infrastructure, enabling on-site production of critical intermediates to realize an integrated manufacturing layout. Shanghai’s Caojing Integrated Site is Covestro’s largest comprehensive production base globally. Since groundbreaking in 2001, cumulative investment there has approached €4 billion. Following a technical upgrade completed in 2025, its MDI capacity rose from 500,000 to 650,000 tons per year. The newly announced 660,000-ton facility constitutes ‘incremental expansion’ atop this existing base. Second track: Feasibility study for an equivalent-scale plant in the UAE. Covestro also announced launching a feasibility study for an MDI plant of comparable scale in the UAE. This initiative will leverage prior partnerships with TA'ZIZ and Fertiglobe, focusing specifically on synergies within the emerging industrial ecosystem of Ruwais Industrial City. In February 2026, Covestro signed a tripartite MoU with Fertiglobe—the world’s largest urea and ammonia maritime exporter—and TA'ZIZ to jointly explore cooperation opportunities across the ammonia value chain. Notably, this UAE feasibility study marks Covestro’s first large-scale capacity initiative in the Middle East since its acquisition by XRG, a subsidiary of Abu Dhabi National Oil Company (ADNOC). XRG views Covestro as the cornerstone of its high-performance materials and specialty chemicals business, aiming to build one of the world’s top five chemical enterprises. The path to capacity growth…

Covestro Links with Fertiglobe, MB Energy for Potential Ammonia Imports as Feedstock, Hydrogen Carrier

6 days ago

Covestro, Fertiglobe, and MB Energy signed an MOU to explore ammonia imports via Hamburg for chemical feedstock and hydrogen supply. The partnership aims to strengthen European supply chains and support lower-carbon production targets.

chemweek

2026-09-14

Covestro Links with Fertiglobe, MB Energy for Potential Ammonia Imports as Feedstock, Hydrogen Carrier

2026-09-16

Covestro Signs Hamburg Port Ammonia Supply Memorandum

Covestro Links with Fertiglobe, MB Energy for Potential Ammonia Imports as Feedstock, Hydrogen Carrier

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