December 28, 2023
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Aarti Industries Secures Rs. 3000 cr, 9-Year Supply Contract
In a strategic move, Aarti Industries, a global leader in specialty chemicals, has inked a significant 9-year-long supply contract with a major global agrochemical solutions provider. The deal focuses on a vital agrochemical intermediate crucial for a widely-used herbicide across various crops such as corn, soybean, cotton, sugarcane, and sunflower.
This long-term agreement promises AIL a revenue potential exceeding INR 3,000 crores over the contract period, set to commence this fiscal year. The agrochemical intermediate is a key component of AIL’s existing integrated product portfolio, solidifying its position as a leading manufacturer in India. Importantly, the company affirms that its current capital expenditure (CAPEX) plans adequately cover the contractual requirements without anticipating any additional CAPEX.
The global agrochemical market, valued at a substantial $74 billion and growing at a mid to high single-digit CAGR, underscores the significance of this move by AIL. Over the last decade, the trend has been towards easternisation of agrochemical sourcing and intermediates, with China and India emerging as cost-competitive regions. Ongoing disruptions in China’s plant operations, influenced by government policies, have accelerated the shift, benefiting India as a net exporter of agrochemicals.
AIL’s Chairman & Managing Director, Mr. Rajendra Gogri, expressed confidence in the contract as a strategic step amid a challenging macro environment.
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