Mumbai: Aarti Industries Limited announced a material amendment to its exclusive long-term supply agreement with a leading global chemical company, marking a strategic expansion of the partnership and reinforcing the company’s role as a global manufacturing partner in advanced chemistry.
Through this development, Aarti Industries will deepen its engagement with the global client by increasing integration levels and strengthening the supply framework for a high-value speciality chemical intermediate.
Under the revised arrangement, Aarti Industries will undertake a backward integration project aimed at manufacturing a significant portion of a critical feedstock in-house.
Earlier, this feedstock was supplied by the customer as part of the original long-term supply agreement. With the extended scope, Aarti Industries will transition to a highly integrated end-to-end manufacturing model for the product, further strengthening the company’s operational capabilities and supply chain control.
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Aarti Industries: Investment and Facility Development at Dahej SEZ
As part of this expansion, Aarti Industries plans to invest approximately ₹200–250 crore over the next two years to establish the upstream integration facility.
The plant will be developed at the company’s existing site in Dahej Special Economic Zone, located in Gujarat, where the current manufacturing facility for the product is already operational.
The integrated facility will manufacture a significant share of the key feedstock required for the production process, enabling Aarti Industries to internalize supply and improve operational efficiencies.
This move is expected to enhance the long-term supply arrangement between Aarti Industries and the global chemical company under the original agreement.
Operational and Supply Chain Advantages
The expanded scope of the partnership will allow Aarti Industries to implement a highly integrated manufacturing framework with several operational advantages. These include:
- Highly integrated end-to-end manufacturing of the final product from Aarti Industries facilities
- Optimisation of operational expenditure and freight through in-house manufacturing rather than external sourcing
- Improved resilience across the supply chain
- Enhanced safety in handling and transportation of materials
While the backward integration project may not materially impact topline growth, Aarti Industries expects the initiative to enhance EBITDA margins over the remaining tenure of the agreement, which spans approximately 15 years. The improvement will be driven by integration efficiencies and operational leverage.
Strengthening Global Chemical Supply Partnerships
The expansion marks another milestone in Aarti Industries’ strategy to strengthen its position as an integrated supply partner for global chemical leaders.
Over the years, Aarti Industries has steadily expanded the scope of its long-term partnerships, providing end-to-end solutions that combine advanced chemistry expertise with large-scale manufacturing capabilities.
The development also highlights the growing role of India as a preferred manufacturing destination for global chemical companies seeking reliable and scalable production partners in advanced chemistry segments.
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Suyog Kotecha, Chief Executive Officer, Aarti Industries Limited, said: “This expansion represents a strategic deepening of a unique long-term partnership. The continued evolution of this relationship reflects the trust placed in our capabilities and our proven ability to deliver, grow, and expand enduring global partnerships.
By undertaking this backward integration, we are transitioning to a highly integrated, end-to-end manufacturing model for this product. This will enhance supply security, improve cost competitiveness, and strengthen EBITDA over the life of the agreement.
We remain focused on positioning India as a preferred partner for global majors seeking reliable, scalable and technologically advanced chemistry solutions, while continuing to create sustainable long-term value for all stakeholders.”
Aarti Industries Limited is a speciality chemical company, known for combining advanced process chemistry with scale-up engineering capabilities.
The company ranks between 1st and 4th globally for nearly 75% of its product portfolio, serving a wide range of global and domestic customers across chemical value chains.
