Aarti Industries Ltd (AIL), a leading global specialty chemicals company with significant presence in pharmaceuticals, on Friday announced that it has signed a Rs 10,000 crore multi-year exclusive supply contract with a leading global chemical conglomerate.

According to the company, this contract entails supply of a high value speciality chemical intermediate over a period of 20 years. The supplies are expected to commence from 2020 with an estimated revenue generation of Rs 10,000 crore over the contract period.

“With this deal, AIL is set to enter a new chemistry range, first of its kind in India, and its end product is amongst the major growth initiatives for the customer,” the company said.

It further said that it will be investing $35-$40 million to setup dedicated large scale manufacturing facility for production of this speciality chemical intermediate and will be built on the basic technology package received from the customer. The upcoming facility will be a 100% export oriented unit in the state of Gujarat.

“As a part of this contract terms, the customer shall provide $42 million as an advance to AIL in installments, which shall be adjusted against the supplies in future. This advance shall help reduce the net capital employed, enabling higher ROCE returns for this project,” the company added.

Commenting on the deal, Rashesh C Gogri, Vice-Chairman & Managing Director, AIL, said, “this deal is testament to our increasing brand equity among targeted customers who continue to choose us for supply of high value intermediaries involving large scale complex chemistries. It highlights the strength as a ‘global partner of choice’ in the global chemical industry.”

Based in Mumbai, the company is amongst the largest manufacturers of Benzene based intermediates in India and a leading supplier to global manufacturers of dyes, pigments, agrochemicals, pharmaceuticals and rubber chemicals.

Shares of the company surged more than 7% to touch a new one week high of Rs 1,159.90 on BSE today after the news came in. At 1.59 pm, the Rs 5 face value shares were trading at Rs 1,142, up 6.86% from the previous closing of Rs 1,068.65.

here is company details.

 

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