* Sees '19 EBITDA of 1.5-2 bln eur, down from 3.2 bln in '18
* Q4 EBITDA falls by two thirds to 293 mln eur
* Rivals BASF, Wanhua, Sadara are boosting output (Adds rivals, share buybacks)
By Ludwig Burger
FRANKFURT, Feb 25 (Reuters) - German chemicals maker Covestro said its 2019 core earnings could fall to as little as half of last year's level as rivals are removing production bottlenecks.
The former Bayer subsidiary said earnings before interest, taxes, depreciation and amortisation (EBITDA) would come in at between 1.5 billion euros ($1.7 billion) and 2.0 billion euros, down from 3.2 billion in 2018.
"The last two years were marked by unusually high margins. For 2019, we expect demand to continue to grow, however margins will drop significantly due to competitive pressure," said finance chief Thomas Toepfer.
Fourth-quarter EBITDA plunged by two-thirds to 293 million euros, less than the 314 million expected on average by analysts in a Reuters poll.
The group said the economic environment was challenging, adding that demand from the Asian car industry had shrunk during the last quarter of 2018.
Rapid earnings growth over the last two years was driven by supply shortages mainly in chemicals that go into heat insulation foams and mattresses.
Companies including BASF, China's Wanhua Chemical , as well as Sadara, a joint venture between DowDuPont and Saudi Aramco, are ramping up production, Covestro said in presentation slides.
Despite lower earnings, Covestro is boosting investments to prevent production bottlenecks during future upswings, taking up the challenge posed by rivals' growth plans.
Still, the company said on Monday it would ask shareholder approval for a fresh round of share buybacks.
Covestro last year returned 1.7 billion euros to shareholders in the form of share buybacks and dividends. Approval will be sought at the next annual meeting to buy back 10 percent of the capital stock, it said on Monday.
($1 = 0.8819 euros) (Additional reporting by Patricia Weiss; Editing by Thomas Seythal and Richard Borsuk)