Aarti Industries signs $125 million supply contract

20 Feb 2019 Evaluate

Aarti Industries has signed a $125 million (Rs 900 crore at current Exchange Rate) supply contract with a leading global chemical conglomerate. The contract entails supply of a high value specialty chemical intermediate for a period of 10 years. The plant is expected to commission in Q4 FY 2021, with average annual revenue of $12.5 million. The end use of the product is one of the major new growth initiative for the customer. The supply quantities of the contract will be used to seed the market and increase the potential market size of the product.

The company estimates a capital investment of approximately $15 milllon to setup a commercial scale manufacturing facility for the production of this speciality chemical intermediate. The upcoming facility will be located in the state of Gujarat. The product is not part of the company’s existing product range. The process had been optimized and scaled up jointly by the technical teams of both the companies over last 4 years within the boundaries of stringent quality requirements. This particular deal not only augments the company’s product portfolio, but also testifies the elevated brand equity the company has among its targeted customers. In line with the company’s vision to be a ‘Global Partner of Choice’, the company collaborates with its global customers to develop niche chemical intermediates involving complex chemistries.

Aarti Industries is one of the most competitive benzene-based speciality chemical companies in the world. It is a rare instance of a global speciality chemicals company that combines process chemistry competence (recipe focus) with scale-up engineering competence (asset utilization).

Aarti Inds Share Price

495.55 -21.85 (-4.22%)
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