Jinan Zhuocheng Bio-Tech Co., Ltd.

Industry News | July 2026 — Global materials manufacturer Covestro has announced plans to invest in a new 660,000-ton-per-year methylene diphenyl diisocyanate (MDI) production facility at its integrated site in Shanghai, China, with commercial operations targeted around 2030. At the same time, the company is conducting a feasibility study for an additional MDI facility of the same capacity in the United Arab Emirates. Supported by XRG, both projects form part of Covestro's long-term strategy to strengthen its global integrated value chain, enhance regional supply chain resilience, and meet the growing worldwide demand for MDI.

As a key raw material for rigid polyurethane foam, MDI is widely used in energy-efficient building insulation, cold-chain logistics, household appliances, automotive components, and sports and lifestyle applications. Driven by increasing global demand for energy-efficient construction and sustainable manufacturing—particularly across Asia and the Middle East—the long-term outlook for the MDI market remains positive. Industry analysts expect demand growth to outpace new capacity additions, making reliable large-scale production an increasingly important competitive advantage.

Covestro stated that the investment underscores its long-term commitment to the global MDI business and its customers. Markus Steilemann, Chief Executive Officer of Covestro, said that as market demand continues to expand, customers are placing greater emphasis on supply reliability. By leveraging the company's technological expertise, operational excellence, and integrated production network, Covestro aims to further strengthen its global supply capabilities. Backed by XRG's long-term support, the projects will also reinforce the company's integrated value chain and improve supply security across key markets.

The Shanghai expansion will include not only the new MDI production unit but also upstream manufacturing facilities and supporting infrastructure, creating a highly integrated production complex with on-site manufacturing of critical intermediates. The facility will utilize Covestro's proprietary MDI AdiP technology, designed to significantly improve energy efficiency while targeting net-zero greenhouse gas emissions (Scope 1 and Scope 2) through advanced process optimization and sustainable operations.

Holly Lei, Global Senior Vice President of Covestro and President of Covestro China, said the investment reflects the company's continued confidence in the Chinese market despite an increasingly complex global business environment. She noted that China's integrated industrial ecosystem, strong innovation capabilities, and highly skilled workforce continue to offer unique competitive advantages. Upon completion, the project will further expand Covestro's Shanghai integrated site, reinforce the company's position as one of the world's leading MDI suppliers, and significantly enhance supply reliability for customers across China and the Asia-Pacific region, supporting the sustainable development of industries such as construction, refrigeration, and cold-chain logistics.

Industry observers believe the investment highlights the accelerating transformation of the global polyurethane industry toward greater regional integration, supply chain resilience, and low-carbon manufacturing. Covestro's decision to establish another world-scale MDI production facility in China not only demonstrates confidence in the long-term growth potential of the Asia-Pacific market but is also expected to strengthen China's high-end polyurethane value chain while providing more stable and reliable supply to customers worldwide.