Aarti Industries (AIL) today announced that they have signed Rs 100 billion multi-year exclusive supply contract with a leading global chemical conglomerate (customer). This contract entails supply of a high value specialty chemical intermediate over a period of 20 years.

The supplies are expected to commence from 2020 with an estimated revenue generation of Rs 100 billion over the contract period. With this deal, All is set to enter a new chemistry range, first of its kind in India; and its end product is amongst the major growth initiatives for the customer.

AIL will be investing USD 35-USD 40 million to setup dedicated large scale manufacturing facility for production of this specialty chemical intermediate, and will be built on the basic technology package received from the customer. The upcoming facility will be a 100 % export oriented unit in the state of Gujarat. As a part of this contract terms, the customer shall provide USD 42 Million as an advance to AIL in instalments, which shall be adjusted against the supplies in future. This advance shall help reduce the net capital employed, enabling higher ROCE returns for this project.

There is a paradigm shift in the Indian manufacturing sector due to major government reforms & initiatives like Make in India, Tax Structure simplification, infrastructure development, etc. The chemical sector has immensely benefitted from creation of chemical zones, strong IPR, availability of raw material and skilled manpower, leading to many global chemical companies investing in India. With an emphasis on SHE, strong technical knowledge, robust manufacturing practices coupled with 30+ years of experience, AIL has becomes a natural partner of choice for the global chemical companies looking to invest/partner in India.

Rashesh C. Gogri, Vice-Chairman & Managing Director, AIL said, "We continue to hit the right milestones at the right time. This deal is testament to our increasing brand equity among targeted customers who continue to choose us for supply of high value intermediaries involving large scale complex chemistries. It highlights the strength as a 'Global Partner of Choice' in the global chemical industry.

The Indian specialty chemicals market has grown at the rate of 14% over the last 5 years and the market size expected to touch USD 70 billion by 2020. With our customer base growing, our prospective investments, capabilities and competencies, will translate into a larger operation that addresses the growing demands of our customers. I am confident that the company will sustain its multi-year growth expanding profitability, generating higher cash flows and enhancing value of all stakeholders."

Shares of the company gained Rs 63.45, or 5.94%, to trade at Rs 1,132.10. The total volume of shares traded was 58,345 at the BSE (12.48 p.m., Friday).