Chemical
Aarti operates at 80% capacity
The company expects its long term contract execution to be on track and it does not believe any significant impact of COVID-19 to those contracts.
- By ICN Bureau
| June 22, 2020
Aarti Industries Limited (AIL) manufacturing units are currently operating at about 80% capacity utilization despite the challenges of supply chain, labour availability poses challenges/threat to continuation of manufacturing operations.
Over 60% of the company’s revenue comes from end use applications such as agrochemicals, pharma, fertilizers and FMCG which is not impacted by COVID-19 and hence the company is protected to this extent. In respect of the balance part of a company's business with end user application into usages such polymers & additives, dyes, pigments, etc. the company envisages demand contraction to be there on account of COVID-19.
The company expects its long term contract execution to be on track and it does not believe any significant impact of COVID-19 to those contracts.
Further, the company is also facing challenges for movement of materials at the port impacting its exports business. This would result in increased cost of storage and also the delay in shipments from India. The company is monitoring the situation closely and taking adequate steps to prioritize its export shipments.
The company has been meeting all the financial obligations in time. The company has adequate surplus cash and also the additional debt is secured to ensure the cash flows of the company and the ability of the company is not affected.
Aarti Industries (AIL) is one of the most competitive benzene-based speciality chemical companies in the world. AIL is a rare instance of a global speciality chemicals company that combines process chemistry competence (recipe focus) with scale-up engineering competence (asset utilization).
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