Mitsubishi Gas Chemical Halts MXDA Plant Construction in the Netherlands Amid Rising Costs and Market Pressures

Japanese chemical giant Mitsubishi Gas Chemical Company, Inc. (MGC) announced on February 23 that its subsidiary, MGC Specialty Chemicals Netherlands B.V., will terminate the construction of its planned meta‑xylenediamine (MXDA) production facility in the Netherlands. The company will cease all construction activities and initiate a formal dismantling process, expected to be completed by the end of 2029. This decision follows a board meeting held on February 20 and marks the culmination of repeated challenges that have affected the project over the past two years.

The MXDA plant, originally planned in Rotterdam with a production capacity of approximately 25,000 tons per year, was intended to supply the global high-performance chemical market, including epoxy resins and polyamide materials. MXDA serves as a key intermediate for epoxy coatings and polymer production, with significant applications in corrosion-resistant coatings.

However, the project has faced major obstacles since MGC suspended construction in September 2025. Rising costs in materials, equipment, and labor, coupled with increasing competition from producers in Asia and the Middle East, have created severe pricing pressure. Market demand and price conditions have diverged from initial expectations, making it unlikely that the plant could achieve sustainable profitability. Even resuming construction or seeking external partnerships was deemed insufficient to ensure viable operations, leading to the decision to terminate the project completely.

MGC noted that halting the project will incur additional costs, including equipment dismantling and contractual obligations, and the company is evaluating the impact on its 2026 fiscal year results, with further announcements to follow if necessary. When construction was previously suspended, the company had already recognized impairment losses related to the project, reflecting MXDA’s declining profitability.

This development also highlights broader trends in the global chemical industry. European facilities face high energy and production costs compared to lower-cost regions in Asia and the Middle East, prompting many companies to reassess their global capacity allocations. Some traditional chemical producers are closing or divesting European assets while focusing on products or regions with stronger competitive advantages.