Expansions: Covestro to invest in MDI train in China and undertake UAE feasibility study; Arkema starts up 15% PVDF capacity expansion in US

German materials firm Covestro has announced a strategic MDI investment program to reinforce its global leadership position and strengthen long-term supply security for customers worldwide. The program includes preparations for a new MDI production train with 660 kilotonnes annual capacity at the Covestro Integrated Site Shanghai in China, with start-up targeted for the end of the decade. In addition, Covestro is conducting a feasibility study for a plant of similar scale in the United Arab Emirates.

Long-term demand for MDI (methylene diphenyl diisocyanate), a key raw material for polyurethane rigid foams, is expected to grow globally, driven by multiple applications: building & construction (energy-efficient insulation), appliances (food chain efficiency and sustainability-driven modernisation), and sports and lifestyle applications – particularly in Asia and the Middle East. At the same time, demand growth is projected to outpace capacity additions, increasing the importance of reliable, large-scale supply. Covestro is one of the world’s leading MDI producers with production sites in Europe, Asia, and North America.

Covestro is preparing to expand its existing site in China with a new MDI production train. In addition to the main MDI unit, the investment includes upstream plants and supporting infrastructure to manufacture key intermediates on site, creating an integrated production setup. The facility will use the proprietary MDI AdiP technology, which significantly reduces energy consumption. Overall, the new MDI train is designed to operate with net-zero greenhouse gas emissions (Scope 1 & 2).

The feasibility study for a potential new MDI production facility in the UAE will assess synergies within the emerging ecosystem in Al Ruwais Industrial City, building on the previously announced partnership with TA’ZIZ and Fertiglobe. A globally oriented facility of this scale would complement Covestro's local-for-local production approach and strengthen supply security for customers across all regions.

The assessment will consider access to energy from renewable sources and the integrated industrial platform of the TA’ZIZ chemicals hub, including reliable local supply of key raw materials such as chlorine and ammonia. A potential investment would build on the project blueprint from Shanghai.

Both initiatives reflect Covestro’s ambition to pursue long-term growth opportunities in the global MDI market, it added.

In other news, materials firm Arkema says it has started up its 15% PVDF capacity expansion in North America.

This capacity expansion in Calvert City, Kentucky, strengthens the group’s leadership in PVDF. This investment of around US$20 million will support the growing demand for energy storage systems and semiconductors, as well as data centre rapid expansion.

Announced in February 2025, this investment has been delivered on time and within the initial budget, it adds, while further strengthening Arkema’s leadership in PVDF in the US, this additional capacity will enable Arkema to better serve fast-growing markets driven by the global energy transition and digitalisation trends, where demand growth continues to materialise as expected.

In particular, it will support increasing demand for lithium-ion batteries for Electric Vehicles (EVs) and Energy Storage Systems (ESS), the rapid expansion of data centres driving cable demand and infrastructure, as well as the growing semiconductor market.

In addition, Arkema has recently announced a 20% PVDF expansion at its facility in China, expected to be completed in 2028. With production sites in North America, Europe, and Asia, Arkema says it is well positioned to support global demand growth and ensure reliable supply worldwide.

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