Aarti Industries Limited (AIL) announced a material amendment to its exclusive, long-term supply agreement with a Leading Global Chemical Company. AIL will undertake a backward integration project, investing ₹200-250 crore over two years at its Dahej SEZ facility. This move transitions the production to a highly integrated, end-to-end manufacturing model, enhancing EBITDA margins and supply chain resilience over the residual 15-year term.
Strategic Amendment to Long-Term Supply Agreement
On March 5, 2026, Aarti Industries Limited (AIL) disclosed entering into a material amendment to its exclusive, long-term supply agreement with a Leading Global Chemical Company, referred to as the “Main Agreement.” This development signifies a strategic progression, enhancing integration levels for a high-value speciality chemical intermediate under a long-term framework.
Investment in Backward Integration
A key element of this expansion is AIL’s commitment to undertake a backward integration project. Previously, a critical feedstock was supplied by the Customer. Now, AIL will manufacture a significant share of this key feedstock in-house, establishing a highly integrated, end-to-end manufacturing model. AIL plans to invest approximately ₹200–250 crore over the next two years for this upstream integration. The new backward-integrated facility will be established at the Dahej SEZ, Gujarat, where the current manufacturing plant is located.
Anticipated Benefits
This enhanced integration is expected to deliver several key advantages:
- Highly integrated end-to-end manufacturing of the end product.
- Opex and freight optimisation through in-house manufacturing instead of external sourcing.
- Improved supply chain resilience.
- Enhanced safety in materials handling.
While topline growth is not expected to be materially impacted, AIL anticipates that the integration efficiencies and operating leverage will positively enhance EBITDA margins over the residual tenure of about 15 years under the Main Agreement.
Reinforcing Global Position
Mr. Suyog Kotecha, Chief Executive Officer of AIL, commented that this expansion reflects the deep trust placed in AIL’s capabilities. This milestone further solidifies AIL’s position as an integrated supply solution partner for global chemical leaders and reinforces India’s role as a preferred manufacturing partner for global majors in advanced chemistries.
About Aarti Industries Limited (AIL)
Aarti Industries Limited is a leading global speciality chemical company known for combining process chemistry with scale-up engineering competence. The company ranks globally 1st – 4th position for 75% of its portfolio, serving as a “Partner of Choice” for major global and domestic customers. AIL is committed to sustainable development, integrating environmental stewardship through cutting-edge technologies and robust infrastructure.
Source: BSE
