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05. April 2005

Huntsman bullish on MDI

Huntsman, The Woodlands, Texas, USA is increasing its global MDI capacity by 40% to exceed 1.2 million metric tons a year by 2007. The expansions will just about keep pace with market demand, which is now growing at 8-10%, according to Peter Huntsman, president and CEO of Huntsman.
The company will this year invest $400 million to expand its MDI manufacturing facilities in Geismar, Louisiana, by 15% to 450,000 mt a year and at Rozenburg, the Netherlands, by 33% to 400,000 mt a year. Huntsman will add another 120,000 mt a year of MDI capacity when its joint venture project in Caojing, China comes on stream in mid-2006.
“In the US, the expansion will barely allow us to keep up with demand from our customers,” said Peter Huntsman. “In Europe, it will allow us to stay about even on that percentage growth, and retain the percentage of the market that we currently have.” The company’s MDI capacity in China is already contractually sold out, he added.
The new capacity in Europe and North America will gradually come on-stream from the second quarter of this year, said Peter Huntsman. “We are not in the business to sell tonnes of MDI; we are in the business to make as much money out of MDI as we can. That means we need to spread that out over the next three years as it comes on.”
At present, Huntsman’s MDI business is being held back as facilities are running above designed capacity, forcing it to turn away business in certain areas, said its leader. The company, he added, made $400m from its MDI business in 2004 and the new capacity will enable it to retain its current 24% share of the global MDI market (3.1 million mt in 2004).

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