Headquarters of chemical company Covestro AG in Leverkusen, Germany. (picture alliance/Daniel Kalker)
Covestro, the high-tech chemicals group, is putting a billion-euro investment into a plastics plant in the United States on ice due to the difficult market environment. Once the current construction phase is completed, a break of 18 to 24 months is planned, said a company spokesperson on Wednesday upon request. The industry portal ICIS had previously reported on the plans.
Covestro had wanted to prepare itself for the expected growth in demand for plastics by investing 1.5 billion euro in a large-scale plant for the production of the foam component MDI at its site in Baytown, Texas. The plant, with a capacity of 500,000 tons per year, was originally scheduled to go on stream in 2024.
However, the industry has been suffering for some time from high capacities and the consequences of the trade dispute between the US and China. Covestro is particularly affected by the slowdown in the car industry. In a recent interview in the "Süddeutsche Zeitung" newspaper, CEO Markus Steilemann was cautious about the outlook for 2020. "The environment is becoming more difficult for us and the entire chemical industry." He referred to uncertainties such as trade conflicts and Brexit. "That's why I’m not convinced of short-term growth for our customer segments. But in the long term, the trends are okay."
Steilemann is likely to present a precise outlook for 2020 and details of the new investment plans when he presents the annual figures for 2019 on February 19.
Notice: No person, organization and/or company shall disseminate or broadcast the above article on Xinhua Silk Road website without prior permission by Xinhua Silk Road.
A single purchase
