Covestro covers it all – From $1.7B investment in MDI and first thermoplastic polyurethane based on CO2 technology to biobased aniline…

Covestro, which you may know as the former Bayer MaterialsScience (part of Bayer Group’s chemicals and plastics unit) prior to 2015, is leading several innovations in the biobased sector with a flurry of announcements over the past week that is sure to impact the bioeconomy. Not only are they financially successful, achieving the best financial results in its history in 2017, but they are making impressive strides on the technology and innovation side of things. And with over 16,000 employees globally and 2017 sales of EUR 14.1 billion (about $16 billion), Covestro is among the world’s largest polymer companies and is teaching us a thing or two about the ABC’s of biochemicals and bioplastics.

$1.7 billion investment in MDI

First, a big announcement this past week is getting folks in Texas pretty excited with Covestro’s expansion to strengthen its position in MDI globally by building a new world-scale MDI plant in Baytown, Texas. The EUR 1.5 billion (about $1.7 billion) investment in the new MDI plant is the largest single investment in the history of the company.

Usually, the first step of the production of MDI is the reaction of aniline and formaldehyde, but Covestro recently developed a unique method for obtaining the key chemical product aniline from biobased raw materials. MDI could in the future be produced from this bioaniline – another important raw material for rigid PU foam.

Total capacity of the new train will be 500 kilotons MDI per year, with the start of production expected in 2024, according to Covestro’s press release. “At the same time an older, less efficient MDI unit of 90 kilotons production capacity will be closed. Thus, total MDI capacities of Covestro in the NAFTA region will reach around 740 kilotons per year making Covestro the industry capacity leader in the region by 2024. With that, Covestro will also strongly underline its global industry capacity leadership position.”

Covestro sees this investment as a way to keep ahead of the strong MDI demand and market growth. “Demand for innovative MDI materials will continue to grow for the foreseeable future and likewise promises attractive capacity utilization rates. We have already announced a significant increase in capital expenditures, now it’s time to put it into action”, said CEO Dr. Markus Steilemann. “With the new MDI train in Baytown, we will further strengthen our global leading position in Polyurethanes, even better serve our customers and create long-term shareholder value.”

“The global MDI market is expected to grow by about 5% per year in the long-term, outgrowing the world’s global domestic product (GDP) by about 2 percentage points, according to Covestro. “Key MDI market drivers include the substitution of less performing and less sustainable materials as well as global megatrends such as an increasing demand for energy efficient insulation solutions. MDI is a precursor for rigid foam, which is an excellent insulation material and is used, for example, in buildings and refrigerators. The expected global MDI demand growth translates into the need for approximately one additional world-scale plant per year.”

CFO Dr. Thomas Toepfer said, “Even with all capacity increase announcements considered, the projected industry supply is not sufficient to fully balance the expected demand growth. We are therefore confident that we will reach high utilization rates of our new capacities soon after the start-up, making the investment highly efficient. Building on existing infrastructure and processes, it will be a prime example of our value creating investment approach.”

Why Baytown, Texas? After checking out different options, Covestro decided on Baytown because of the attractive domestic market as well as “significant benefits in terms of available infrastructure and logistics.” According to their press release, “The superior cost position is mainly driven by economies of scale and a high degree of vertical integration. Furthermore, low energy and shipping costs due to high domestic demand in North America add to the Baytown case.”

ABC’s – Aniline, Baycusan, Cardyon

Covestro likes being first, even if it’s not first alphabetically. In May 2017, as reported in NUU, they were able to make a biobased aniline for the first time ever. Aniline, a chemical only attained from fossil fuels in the past, was produced from plant-based materials using a microorganism as a catalyst to convert sugar from feed corn, straw or wood, and chemical catalysis. Covestro successfully created the chemical in the lab and is partnering with others to bring it to scale in a pilot plant for industrial use. This is big news for the chemical industry which produces about five million metric tons of aniline each year globally and continues to increase at about 5% every year. Aniline is used as a starting chemical for many products, but is most known for its use in rigid polyurethane foam, often used in insulating material for buildings and refrigeration systems.

Just this past week, Covestro also announced the development of a film-forming polyurethane dispersion for hairstyling products with a carbon content based on 58 percent biomass. The film former called Baycusan E 1000 is the first product of the new eco series and achieves the performance level of synthetic acrylate polymers, in particular in formulations where a long-lasting hold and a good humidity resistance are critical – making it great for hair care products. Baycusan eco E 1000 is the first product of the new eco series of film formers, and fulfill the requirements of ISO standard 16128 part 1 to be designated as a naturally derived ingredient.

“Our new biobased film former can be used to manufacture sprays and gels that give the stylist a good, long-lasting, and flexible hold while offering anti-frizzing properties,” explains Dr. Laurence Pottié from Global Business Development for Cosmetics. “Our hairstyling laboratory measured key properties of the new biobased PU dispersion and compared it to petrochemical-based filming polymers available on the market. In addition, we tested formulations using the new dispersion and with synthetic polymers.”

Another big announcement came that they created Cardyon, new polyether carbonate polyols that are produced with the aid of carbon dioxide (CO2). With Desmopan 37385A, Covestro now offers the first representative of a new series of thermoplastic polyurethanes (TPU) containing polyether carbonate polyols based on CO2 technology.

Why is this pretty exciting? Well, according to Georg Fuchte, TPU expert at Covestro, “With the new TPU, our customers can reduce the carbon footprint of their products and as a result play a pioneering role in sustainability vis-à-vis their competitors,” explains. “This is especially true for companies in the consumer goods industry, which often manufacture products with a short lifespan.”

Work is underway on new CO2-based polyols for rigid polyurethane foams that could be used, for example, in the thermal insulation of buildings, in automobiles and in sports equipment. At the Dormagen plant, Covestro already operates a production plant that produces CO2-based polyols for flexible polyurethane foams. The latter are used in the commercial production of upholstered furniture and mattresses.

Covestro wants to be first to the finish line as well and is tapping into the competitive World Solar Challenge 2019 by sponsoring and supporting RWTH Aachen University’s “Team Sonnenwagen Aachen” for the toughest solar race in the world. Covestro is helping with the production plans of the solar car and will be using their biobased hardener Desmodur eco N 7300 in the car’s polyurethane repair clearcoat.

In October 2017, NUU reported that Covestro developed a flame-retardant, 90% renewable polyurethane system as a means of mitigating structural damage due to fire. Covestro and partners were looking into biogenous, aliphatic polyisocyanates and polyols based on vegetable oils. Covestro’s system is also reinforced with cellulose fibers. “At the end of this process, we will have the first ever reinforcing materials for use in timber construction that are made up of at least 90% renewable raw materials,” said Covestro’s Paul Heinz. This “will make state-of-the-art timber construction with cross-laminated and glue-laminated timber even more sustainable.”

Bottom Line

Covestro is covering a lot of ground in the biochemical and bioplastics area and is leading the way with innovative development of biobased alternatives. Check out their latest Corporate Profile slides here to learn more about how they are pushing boundaries to make more innovative materials. While we love to hear about new, up and coming innovators and entrepreneurs, it’s also nice to hear about the big multinational companies out there, like Covestro, using their big bucks and global power to make amazing transformations to support the bioeconomy.