Wanhua to build US$1 bn MDI plant in US

Chinese chemical company Wanhua Chemical, which is the world’s largest producer of the polyurethane raw material MDI (methylene diphenyl diisocyanate), plans to build a US$1.1 billion MDI plant in Louisiana, US. Wanhua currently produces 1.8 million tonnes/year of MDI or about 24% of the world’s total capacity.

Louisiana Economic Development (LED), the state's economic development arm, has promised Wanhua a US$4.3 million infrastructure grant. Wanhua itself will pump US$954 million into building the complex. Unnamed project partners plan to deliver the remaining US$166 million in construction costs, according to the project's announcement.

The agreement between Wanhua and Governor John Bel Edwards of Louisiana caps more than three years of negotiations and is also the second largest Chinese investment in Louisiana's chemical manufacturing industry. Yuhuang Chemical is developing a US$1.8 billion methanol complex in St. James Parish.

Immediate access to an abundant supply of natural gas and other feedstocks, along with deepwater transportation via the Mississippi River made Louisiana a natural fit for Wanhua’s investment, says the company.

Though the company says it completed extensive site evaluations in Louisiana, Wanhua did not release further details about the project, including the size of the plant, the site or the start-up date. It expects to announce its final site choice in the coming months. The company also says it considered many industrial site options, including locations in Texas, before choosing to invest in Louisiana.

An intermediate chemical, MDI is among the fastest-growing categories of chemical production. MDI is commonly used for polyurethane foams and elastomers, with applications in such consumer areas as appliances, electronics, furniture, textiles and footwear. For industrial applications, MDI is commonly used in the development of rollers, packing, vibration insulators and synthetic leather.

Wanhua is public-listed on the Shanghai Stock Exchange. It boosted its marketing presence in the US by establishing a sales office in Philadelphia in 2006.

Wanhua operates two MDI plants in China, in Ningbo, and the Yantai Chemical Complex in Yantai. In 2011, it invested US$1.7 billion in the purchase of the Hungarian polyurethanes maker BorsodChem. Wanhua’s sales in 2015 were about US$3 billion.