Aarti Industries' Backward Integration Investment

Aarti Industries Limited (AIL) has announced a material amendment to its exclusive long-term supply agreement with an undisclosed global chemical company. This strategic move involves AIL undertaking a backward integration project, investing approximately ₹200-250 crore over the next two years to set up a plant in Dahej SEZ, India===Gujarat. This new facility will manufacture a significant share of a key feedstock previously supplied by the customer, transitioning AIL to a highly integrated, end-to-end manufacturing model for a high-value specialty chemical intermediate. While not expected to materially impact topline growth, this integration is projected to positively enhance EBITDA margins over the remaining 15-year tenure of the main agreement through efficiencies and operating leverage. CEO Suyog Kotecha emphasized that this expansion deepens a unique long-term partnership, enhances supply security, improves cost competitiveness, and strengthens EBITDA, further positioning India as a preferred partner for global majors in advanced chemistries.