Aarti Industries signs supply contract worth Rs. 900 crore

Aarti Industries has entered a supply contract with a leading global chemical conglomerate. The Rs. 900 crore contract includes the supply of a high-value speciality chemical intermediate for a period of 10 years.

The plant is expected to get operational from Q4FY21 generating annual revenue of US$ 12.5 million. The end use of the product is one of the major new growth initiatives for the customer. The supply quantities of the contract will help increase the potential market size of the product.

The company expects a capital investment of US$ 15 million for setting up a commercial scale manufacturing facility for the production of the speciality chemical intermediate. The plant will be located in the state of Gujarat.

The said product is not a part of the company’s existing product range. Both these companies have been collaborating since last 4 years for this project. With such international collaborations, Aarti Industries has the advantage of developing niche chemical intermediaries involving complex chemistries.

On Wednesday, the stock of Aarti Industries opened gap up by 4 per cent to Rs. 1,379.90 from its previous close of Rs. 1,326.95. In the last two weeks, the stock has dipped by 25 per cent from its 52-week high of Rs. 1,791.50.