The Plant That Took Eight Years to Pick a Country

In October 2018 Covestro put out the largest single investment announcement in its history. EUR 1.5 billion for a world-scale MDI plant at Baytown, Texas: 500 kilotons of new capacity, production starting in 2024, an older 90-kiloton unit closing behind it, and the company's NAFTA capacity landing around 740 kilotons a year. Markus Steilemann said demand for MDI would keep growing "for the foreseeable future."

He was right about the demand. The plant is what went missing.

January 2020 paused it for 18 to 24 months on market conditions. September 2021 unpaused it, without saying where it would go.

November 2022 paused it again, this time naming the European energy crisis, the war in Ukraine and inflation, and leaving the choice between the USA and China "open until further notice."

That sentence sat there for three and a half years.

The Location Question Got an Answer

On June 30 Covestro announced the train. It goes to the Integrated Site Shanghai, 660 kilotonnes a year, start-up "targeted for the end of the decade" (chart above).

A second facility of similar scale is under feasibility study in Al Ruwais Industrial City in the UAE, built on the existing TA'ZIZ and Fertiglobe partnership, with XRG named as the strategic investor behind both.

Read the release for a capital figure and you won't find one. Not a euro, not a dollar, not a range.

Our Ledger entry yesterday morning counted July's capacity events and found that removals arrive with tonnages and additions arrive with dollars. This one inverts it cleanly: a published tonnage, a published site, a published decade, and no price at all.

For a project that spent eight years being repriced, that omission is the most informative thing in the document.