Neogen Chemicals announced the receipt of an additional ₹60 Crore on-account payment from the insurer regarding the fire incident at its Dahej SEZ facility in March 2025. This brings the total on-account claim received to ₹140 Crore. While the affected MPP3 facility remains suspended, replacement construction is progressing rapidly, with commissioning targeted for Q1 FY27. Interim production has been shifted successfully to alternative sites.
Insurance Settlement Update
Following the fire incident that occurred on March 5, 2025, at the Multi-Purpose Plant (MPP3) facility, warehouse, and tank farms in Dahej SEZ, the company has received further updates on its insurance claim.
Neogen Chemicals has secured an additional on-account payment of ₹60 Crore from the Insurance Company today, based on the surveyors’ interim report. This new receipt raises the total on-account claim received to date to ₹140 Crore, inclusive of this latest installment.
The final settlement regarding loss of property, business interruption, and asset reinstatement value will be determined in subsequent stages following the full assessment.
Impact on Operations and Restoration Timeline
As previously intimated, the Production/Operation of the MPP3 Facility, warehouse, and tank farms remains temporarily suspended since April 23, 2025.
The company confirms that the construction of the replacement plant is progressing rapidly, with commissioning currently scheduled for Q1 FY27.
To mitigate business disruption in the interim, critical specialty product production has been successfully shifted to other company sites following necessary customer approvals. This strategic realignment, combined with planned expansion at the Patancheru Plant, is intended to minimize the long-term impact on earnings.
Financial Recognition of Loss
The company has recognized an estimated loss of ₹348.16 Crore (on a consolidated basis) concerning damage to property, plant & equipment, and inventory, alongside incidental charges.
An insurance claim receivable of ₹334.60 Crore (consolidated basis) has been recognized, adjusted for deductibles and based on the assessment of loss admissibility. Importantly, the company has not accounted for loss of profit due to business interruption or excess reinstatement value, adhering to accounting conservatism principles.
To date, the company has also received ₹3.48 Crore from the sale of salvaged scrap material.
Source: BSE
