Mitsubishi Gas Chemical cancels Netherlands MXDA plant due to rising costs, delays, and weak profitability outlook despite exploring recovery options.
Mitsubishi Gas Chemical Company (MGC) has decided to permanently halt the construction of its planned meta-xylenediamine (MXDA) production facility in the Netherlands, marking a significant shift in its European expansion strategy. The decision was approved by the company’s Board of Directors and affects the project being developed under its Dutch subsidiary, MGC Specialty Chemicals Netherlands BV (MSCN).
The move comes after a detailed reassessment of the project’s feasibility in light of multiple challenges that emerged during its development. According to the company, a combination of persistent construction delays, a sharp escalation in project costs, intensifying competition within the MXDA market, and broader changes in the global business environment ultimately made the project financially unviable. These pressures significantly undermined the original business case that had supported the investment.
MGC had already signaled concerns about the project in 2025, when it temporarily suspended construction activities in September of that year. This pause allowed the company to evaluate its options and reassess the long-term viability of the plant. During this period, MGC also recorded impairment losses related to MSCN’s noncurrent assets, reflecting the declining value of the partially developed facility. These financial impacts were disclosed in the company’s earnings reports released in November 2025 and again in February 2026, highlighting the seriousness of the situation.
Following the suspension, MGC explored several potential pathways to salvage the project. These included the possibility of restarting construction under revised cost structures, as well as seeking partnerships or collaborations with external companies to share financial and operational risks. Despite these efforts, the company ultimately determined that even if the facility were completed, the production and sale of MXDA would not generate sufficient profitability to justify the investment. This conclusion was a decisive factor in moving forward with a full discontinuation.
As part of the shutdown process, MGC plans to carry out a structured decommissioning of the site. This will involve the removal of installed equipment and the resolution of existing contractual commitments. The company has indicated that it aims to complete these activities by the end of 2029, suggesting a phased and carefully managed exit from the project.
The financial implications of the decision are still being assessed. MGC has stated that it is currently reviewing how the discontinuation will impact both its consolidated and standalone financial results for the fiscal year ending March 31, 2026. Additional costs are expected, particularly those associated with dismantling equipment, terminating contracts, and other closure-related obligations. The company has committed to providing further updates if the financial impact proves to be material.
Overall, the decision underscores the challenges faced by large-scale chemical projects in an environment marked by cost inflation, market volatility, and competitive pressures. MGC’s withdrawal from the Netherlands MXDA project reflects a cautious approach to capital allocation, prioritizing long-term profitability and financial discipline over continued investment in a project with uncertain returns.
