The chemical company is planning to largely phase out its top product, polycarbonate, at its Belgian site. 260 jobs are at risk. The reason for this is not just the expensive energy.
Covestro wants to reduce polycarbonate production at its Antwerp site from four to one production line, and 260 jobs will be affected.
The Krefeld-Uerdingen location remains unaffected by the production cut and continues to produce polycarbonate for higher-quality applications.
Covestro attributes the restriction to competitive and price pressure from Asian manufacturers as well as weak demand in Europe.
The company plans to expand polyurethane production in Antwerp with a new investment.
Dusseldorf. Covestro AG wants to largely reduce production of one of its most important plastics in Europe. The company announced on Thursday that production of standard polycarbonate at its Antwerp site in Belgium will be reduced from four to one line. The move affects 260 jobs.
The transparent plastic is used for large-volume bottles, car headlights, laptop casings and in construction. Covestro is the leading manufacturer of polycarbonate worldwide. However, the group is under increasing competitive and price pressure from competitors in Asia. At the same time, demand in Europe is weak.
This is how Covestro boss Markus Steilemann justifies the dismantling plans in Antwerp. "The European chemical industry is at a crossroads. The structural challenges are significant and market conditions have fundamentally changed," he said. “In order to secure the future of our production in Europe, we must specifically adapt our portfolio to where we can be competitive in the long term.”
Covestro operates one of its two large-scale polycarbonate plants in Europe in Antwerp. The second is in Krefeld-Uerdingen in North Rhine-Westphalia and is not affected by the renovation.
A spokesman confirmed that Covestro will continue full production there. In the plant, the standard plastic produced is refined for higher-quality applications, such as in medical technology. The company does not provide sales figures for the product.
Covestro's announcement is another blow to the European chemical industry. In recent years, numerous manufacturers have shut down systems or closed them completely.
In Germany, these include plants owned by BASF in Ludwigshafen and the US group Dow in the eastern German chemical triangle of Leuna. Bayer is closing the production of a crop protection product in Frankfurt. A few weeks ago, Evonik announced the end of plants in Bitterfeld in eastern Germany, in Hamburg and in Witten/NRW.
Basic chemical businesses, which are under particular pressure in Europe, are particularly affected. They are operated with a lot of energy and therefore suffer from high gas prices. But that's not the only reason for the crisis.
In basic chemicals, competition is global, sales prices are low because Asian and especially Chinese manufacturers are entering the market with new capacities. They can produce so cheaply that transport to Europe is worth it. But in almost all regions, customers are holding back on placing orders.
According to Covestro, this mix has led to ongoing global overcapacity for standard polycarbonates. According to its own information, the group has been making increasing losses at its Antwerp location since 2022 because the facilities are not being used to capacity. Outside Europe, the Leverkusen-based company has large polycarbonate production facilities in China, Thailand and the USA.
Europe's chemical industry is struggling with rapidly growing imports from competitors from China. For many products, domestic manufacturers accuse the Chinese of pushing their way into Europe with subsidies and dumping prices.
The EU Commission and national governments are alarmed. Before the EU summit starting on Thursday, Chancellor Friedrich Merz (CDU) announced a tougher EU trade policy. There will be “a robust European response to the growing unfairness in world trade and to the trade practices of other countries that distort competition,” said the CDU chairman in the Bundestag on Wednesday.
Covestro also operates other facilities in Antwerp for its second important product, polyurethane. These are foams used in car seats, furniture and to insulate homes and refrigerators. Covestro in Antwerp wants to expand this product line with a new investment. In total, the group employs 970 people there.
The dismantling plans announced on Thursday are initially an announcement. In Belgium, companies are obliged to consult with employee representatives before making specific decisions. Other steps to reduce costs can also be developed.
