MGC scraps MXDA plant project in Netherlands

23 Feb '26

2 min read

MGC scraps MXDA plant project in Netherlands

Pic: Shutterstock/dongfang

Insights

Mitsubishi Gas Chemical Company Inc has decided to discontinue construction of its meta-xylenediamine (MXDA) plant at its Dutch subsidiary, citing cost overruns, delays and weak profitability outlook.
The project had been suspended earlier and impairment losses were recorded.
The group will begin shutdown procedures, including equipment removal, with completion targeted by 2029.

Mitsubishi Gas Chemical Company, Inc. (MGC) announced that it has decided at its Board of Directors meeting held on February 20, 2026 to discontinue construction work that had been implemented at MGC Specialty Chemicals Netherlands B.V. (hereinafter “MSCN”), a consolidated subsidiary in the Netherlands, to establish a meta-xylenediamine (MXDA) production facility. Details follow.

Reason for discontinuation

As announced in its press release dated September 17, 2025, MSCN decided to temporarily suspend construction work of this MXDA production facility due to construction schedule delays, a significant increase in construction costs, intensifying market competition, and other changes in the business environment. Following this decision, MGC assessed the recoverable value of MSCN’s noncurrent assts and thus recorded impairment losses associated with these noncurrent assets. These were publicly disclosed on November 10, 2025 and February 10, 2026 in conjunction with the financial results announcements for the first half and first nine months, respectively, of the fiscal year ending March 31, 2026.

Since then, MGC has considered a variety of options, including resuming construction work and partnering with an external company. However, MGC has concluded that the production and sale of MXDA would not allow MSCN to secure sufficient profit even if the facility in question were to be completed. Thus MGC decided to discontinue said construction work. Looking ahead, MGC intends to launch procedures toward the shutdown of the facility, including the removal of its equipment, which the Company aims to finish by the end of 2029.

Outlook

The MGC Group is currently examining the impact of this decision and other implications on its consolidated and non-consolidated operating results for the fiscal year ending March 31, 2026. The Company will promptly make an announcement should any matters requiring disclosure arise. In addition, the discontinuation of construction work is expected to cause MGC to record various relevant costs, such as those arising from the removal of equipment and contract-related procedures.