Aarti Industries Limited (AIL) has finalized a significant amendment to its exclusive long-term supply agreement with a leading global chemical partner.

This development signifies a strategic evolution of the partnership, deepening operational integration and reinforcing the supply framework for a high-value specialty chemical intermediate.

The engagement will continue over the long term, remaining consistent with the original Main Agreement's duration.

Under the Main Agreement, one of the critical feedstock was provided by the customer. As part of the extended scope, AIL will undertake a backward integration project to set up a plant that shall manufacture a significant share of this key feedstock in-house, thereby transitioning to a highly integrated, end-to-end manufacturing model.

AIL expects to invest approximately Rs. 200–250 crore over a period of the next two years towards this upstream integration. This backwards integrated facility is expected to be set up at the same location (where the current plant is situated) to cater to requirements under the Main Agreement, i.e., at Dahej SEZ, Gujarat.

The backward integration initiative will primarily boost EBITDA margins through operational efficiency and leverage over the next 15 years, rather than driving significant revenue growth. This 15-year Main Agreement aims to enhance profitability through improved operating leverage and integration efficiencies.

The Main Agreement, which laid the foundation for a unique, long-term engagement has evolved significantly over time. This expansion underscores AIL’s demonstrated ability to build, nurture, and scale enduring global partnerships while continuously expanding its scope and value.

Commenting on the development, 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.”