Europe's TDI Capacity on the Rise

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Researched by Industrial Info Resources (Sugar Land, Texas)--Toluene Diisocyanate (TDI) is a chemical with many uses, but is mainly used in the production of polyurethane foams that are used in furniture, bedding and automobile seats. There has been a rise in demand for this product, and in the next couple of years, additional TDI production capacity will be created in Europe.

In early 2009, BorsodChem Rt (Kazincbarcika, Hungary) started construction on a new TDI unit at its headquarters and production plant in Kazincbarcika. The plant has an existing TDI unit that produces 90,000 metric tonnes per year. When the new unit comes online, this unit will be idled. The new unit will add an additional 200,000 metric tonnes per year of TDI capacity and is expected to be complete by mid-2011.

In Dormagen, Germany, Bayer MaterialScience, a subsidiary of Bayer AG (PINK:BAYRY) (Leverkusen, Germany), in the next couple of years plans to close a 60,000 metric-tonne-per-year TDI unit. Utilizing some of the existing infrastructure, the company will build a 300,000-metric-tonne-per-year TDI unit, which will likely begin construction by the end of 2011 and is expected to take more than two and a half years to build. While the new unit is under construction, the existing unit is expected to begin dismantlement and demolition in the third quarter of 2013.

BASF SE (OTC:BASFY) (Ludwigshafen, Germany) is currently evaluating different sites to construct a new TDI unit. The existing plants under assessment to receive the new unit are in Ludwigshafen and Antwerp, Belgium. These sites have been targeted, because both of the plants are currently producing aniline and nitrobenzene, which are used in the production of TDI. The site is expected to be selected shortly, and the unit is on track for a 2014 startup. The new unit will add approximately 300,000 metric tonnes per year of TDI to the market.

In Bydgoszcz, Poland, Zaklady Chemiczne Zachem SA is planning an expansion of its existing TDI unit and corporate headquarters location. The expansion will increase the company's TDI capacity from 75,000 to 90,000 metric tonnes per year. If the expansion continues on-schedule, the additional capacity is expected to come online by the end of 2011.

Overall, Industrial Info is tracking TDI capacity increases with a combined total investment value of more than $550 million, which will add 890,000 metric tonnes per year of TDI production capacity.

Part of the demand for TDI in Europe may stem from the recent closure of a Dow Chemical Company (NYSE:DOW) (Midland, Michigan) unit in Freeport, Texas. With less TDI being exported to Europe, this could contribute to the European market's need for increased production. The Dow Chemical Company's approximately 105,000-ton-per-year TDI unit is expected to begin site closure activities, including demolition and dismantlement, by the end of 2011.

Toluene diisocyanate production is not only expanding in Europe, but also worldwide, namely in Asia. IIR is currently monitoring projects adding additional capacity in China, India, Saudi Arabia and South Korea. The three new grassroot plants and four unit additions have an investment value of approximately $2.4 billion, adding an additional 1.13 million metric tons per year of TDI.

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