Covestro Suspends Investment in World-ClassMDI Plant

Covestro has decided to suspend itsinvestment project for a new world-class MDI plant due to the energy crisis inEurope and the continued weakness of the global economy. This also means that afinal decision on the location of the MDI plant has not yet been made.

Dr. Markus Steilemann, CEO of Covestro,said: "The war in Ukraine, the European energy crisis and growinginflation have severely disrupted the global economy. In an increasinglyvolatile economic environment, we must ensure that we make the best economicand strategic decisions for the company. Therefore, we are temporarilysuspending the program and will reassess it at a later date. Also in the longterm, we see significant growth in global demand for MDI driven by the trendtoward energy efficient buildings and we, as a global market leader, expect tobenefit from this demand while we continue to invest in areas where there aregrowth opportunities in all regions of the world."

In September 2021, Covestro announced thatit will resume its previously suspended investment program in a world-class MDIplant. In the matter of site selection, Covestro reports that it is consideringthe U.S. or China as locations for new plants.

We are facing unprecedented challenges thatare fundamentally changing the global economic landscape," said Dr. ThomasToepfer, Covestro's chief financial officer. That is why we have carefullystudied this world-class project in light of our overall investment process andhave decided to suspend it in light of the economic situation. In the meantime,we will continue to invest in our transition to a circular economy and inexpanding Covestro's capacity."

The suspension of global-scale investmentprojects does not represent a change in Covestro's long-term growth strategy.In the long term, China and the Asia-Pacific region in particular will remainCovestro's top growth markets. As part of its "Sustainable Future"corporate strategy, Covestro will continue to invest in areas with sustainablegrowth opportunities and continue to move towards a fully circular approach.