German specialty chemical supplier Covestro AG is aiming to increase its capital expenditure to 1.2 billion euros ($1.4 billion) each year by 2021 as it continues to record solid growth in key markets.
The company announced July 26 that it is raising its investments to 650–700 million euros ($760-818 million) this year, and expects the figure to reach 1.2 billion euro mark in the next three years.
These investments, according to Chief Financial Officer Thomas Toepfer, will include targeted expansion of production capacity as well as the construction of new facilities.
Covestro will also aim to reduce the cyclicality of its product portfolio through "additional highly-differentiated applications," for instance, for the automotive, electronics and health care sectors.
The move is in response to the signs that market prices are normalizing in some product areas, especially for the flexible foam precursor TDI.
This year so far, Covestro has announced major expansion programs, including a 100 million euro ($117 million) investment in its global film production, launched mid-July.
Furthermore, the company announced, in June, a 200 million euro ($234 million) investment in Tarragona, Spain, where it will be building an own chlorine production unit and extending the present facilities for the rigid foam precursor MDI.
And there is more in the pipeline, according to CEO Markus Steilmann.
“MDI capacity in Brunsbüttel, Germany, and the polycarbonate production in Caojing, China, are being extended,” said Steilmann commenting on Covestro's strong second quarter results.
