MGC temporarily suspends MXDA facility construction in the Netherlands due to delays, cost increases, and market changes; reviewing project feasibility.
Mitsubishi Gas Chemical Company, Inc. (MGC) announced that during its Board of Directors meeting on September 17, 2025, the company decided to temporarily suspend construction of a meta-xylenediamine (MXDA) production facility at its consolidated subsidiary, MGC Specialty Chemicals Netherlands B.V. (MSCN). This decision comes in response to a combination of factors, including ongoing construction delays, substantial increases in construction costs, and evolving market conditions that could affect the project’s commercial viability.
As previously reported in MGC’s press release dated September 29, 2021, the company had been undertaking the construction of the MXDA production facility at MSCN to establish a new production site in Europe, which represents the largest market for MXDA globally. The project aimed to begin production in July 2024. However, several unforeseen challenges emerged during the construction process.
The project experienced delays due to a mid-construction change in one of the contractors. Additionally, the construction and labor costs rose significantly, driven in part by the ongoing geopolitical situation, notably the Russia-Ukraine conflict, which has disrupted supply chains and increased costs across multiple sectors. Furthermore, changes in the MXDA market environment, including demand fluctuations and pricing pressures, have raised concerns that the project may no longer achieve the originally projected profitability.
Given these circumstances, MGC has opted to temporarily halt construction work at MSCN to conduct a comprehensive review of the business plan. The company will carefully evaluate whether continuing the project is economically and strategically viable under the current market conditions. This temporary suspension allows MGC to reassess investment requirements, potential risks, and expected returns, ensuring that any future decisions align with the company’s long-term strategic goals.
The MGC Group is currently assessing the financial and operational impact of this temporary suspension on its consolidated results for the fiscal year ending March 31, 2026. The company intends to provide timely updates should any significant developments arise that require disclosure to stakeholders. By taking this measured approach, MGC aims to ensure that the project, if resumed, will be executed under conditions that maximize operational efficiency and commercial success while mitigating potential financial risks.
The decision reflects MGC’s commitment to prudent management and strategic planning, prioritizing sustainable growth and careful resource allocation amid global uncertainties and market fluctuations.
MGC Specialty Chemicals Netherlands B.V. (MSCN), established in January 2021, is a wholly owned subsidiary of Mitsubishi Gas Chemical Company, Inc. (MGC). Located at Theemsweg 5, 3197 KM Botlek, Rotterdam, in the Kingdom of the Netherlands, MSCN is led by Managing Director Masatoshi Sato. The company specializes in the manufacture and sale of meta-xylenediamine (MXDA) and was initially scheduled to commence production in July 2024. The facility has a production capacity of 25,000 metric tons per annum (MTA) and was established with a capital investment of 20 million euros. As a specified subsidiary of MGC, MSCN plays a strategic role in expanding the group’s chemical production footprint in Europe.
