Aarti Industries Ltd Secures Long-Term Supply Contract with Global Agrochem Major for Niche Agrochemical Intermediate

Aarti Industries Limited (AIL), a prominent global specialty chemicals company, has announced the signing of a 9-year long-term supply contract with a leading global agrochemical products and solutions company. The contract pertains to the supply of a niche agrochemical intermediate, which plays a crucial role as an input component for a widely used herbicide applied in diverse food and cash crops like corn, soybean, cotton, sugarcane, sunflower, and more.

The global market for this herbicide is expansive and steadily growing, and the contract offers AIL a revenue potential of over Rs. 3,000 crores over the 9-year period, with supplies commencing from the current fiscal year. The agrochemical intermediate is an integral part of AIL's existing integrated product portfolio, and the company's current CAPEX plans are deemed sufficient to meet the contract requirements, with no anticipated additional CAPEX.

The global agrochemical market, valued at US$ 74 billion, is experiencing mid to high single-digit growth. Over the past decade, there has been a notable shift in the sourcing of agrochemicals and intermediates towards cost-competitive regions like China and India. Frequent disruptions in plant operations in China have further accelerated the trend of diversifying sourcing strategies, benefiting countries like India, which has emerged as a net exporter of agrochemicals.

Commenting on the development, Mr. Rajendra Gogri, Chairman & Managing Director at Aarti Industries Limited, stated, "This contract win is yet another step towards making our business more robust, resilient, and predictable. Entering this contract in such a challenging macro environment is a testament to the efforts of our team and will go a long way in strengthening our integrated product value chain. This contract underscores our commitment to transforming these relationships into additional future long-term opportunities and provides us an opportunity to grow in the high-value agrochemical space."

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