Covestro Announces Investment Program for MDI
Covestro plans to invest in a new world-scale plant for methylenediphenyl diisocyanate (MDI) in China and is launching a feasibility study for an MDI plant in the UAE.
Covestro has announced a strategic investment program for MDI. The program includes preparations for the construction of a new MDI production facility with an annual capacity of 660,000 metric tons at its integrated site in Shanghai, China. Commissioning is scheduled for the end of this decade. In addition, the company is conducting a feasibility study to evaluate the construction of another plant of a similar scale in the United Arab Emirates (UAE). Each of these construction projects is expected to involve an investment in the low single-digit billions.
Both projects reflect Covestro’s long-term growth ambitions in the global MDI market. The projects are supported by XRG, the investment arm of ADNOC, to which the Leverkusen-based plastics manufacturer has belonged since 2025. As a strategic investor, XRG brings a long-term investment perspective and a global platform approach to the next phase of growth. XRG views Covestro as a key building block for expanding its performance materials and specialty chemicals business and becoming one of the five largest chemical companies worldwide.
“XRG’s long-term commitment creates the right foundation for implementing these projects and enables us to leverage integrated value chains, strengthen supply security, and succeed in the global marketplace,” explains Markus Steilemann, CEO of Covestro.
Steilemann continues: “This investment program is a clear commitment to our customers and to our long-term growth ambitions in the MDI market. We see strong and sustainable demand, as well as increasing requirements for supply security. With these planned investments, we are strengthening our ability to reliably supply customers on a large scale while also leveraging our technological and operational strengths.”
Covestro expects continued growth in global demand for MDI (methylenediphenyl diisocyanate) in the coming years. Key growth drivers include energy-efficient construction and renovation, modern household appliances, and numerous applications in the leisure and consumer goods sectors. The markets in Asia and the Middle East are experiencing particularly dynamic growth. Demand growth is expected to outpace the expansion of production capacity. A reliable, long-term supply is therefore becoming increasingly important. Covestro is one of the world’s leading manufacturers of MDI and operates a global production network in Europe, Asia, and North America.
China: Building on a Track Record of Operational Excellence
Covestro plans to expand its integrated site in Shanghai with a new MDI production facility. In addition to the actual MDI production, the project also includes additional facilities and infrastructure for key feedstocks, thereby strengthening integrated value creation at the site. The company’s proprietary AdiP technology will be used, which significantly reduces the energy requirements of production. The new plant is designed to operate in a climate-neutral manner (Scope 1 and 2).
“Our integrated site in Shanghai combines high reliability with proven expertise in implementing complex projects,” says Thorsten Dreier, Chief Technology Officer at Covestro. “The new MDI plant will improve the overall efficiency of our production and underscores our commitment to achieving operational climate neutrality. This is also made possible by our proprietary AdiP technology, which has already been successfully tested on an industrial scale in Germany.”
UAE: Evaluating the Strategic Advantages of an Industrial Ecosystem
As part of a feasibility study, Covestro is also evaluating the construction of a new MDI plant in the United Arab Emirates. The study builds on the previously announced partnership with TA'ZIZ and Fertiglobe and will examine synergies within the emerging industrial cluster in Al Ruwais Industrial City. A globally oriented plant of this scale would complement Covestro’s local production approach and strengthen supply security for customers in all regions.
The study will take into account access to renewable energy sources as well as the integrated industrial platform at the TA'ZIZ chemical site—including the reliable local supply of key raw materials such as chlorine and ammonia. A potential investment would build on the proven project concept from China.
“The planned expansion in China and the feasibility study in the UAE demonstrate how we are systematically pursuing opportunities to strengthen supply security, further enhance our competitiveness, and reliably supply our customers over the long term,” added Steilemann.
