|
This agrochemical intermediate serves as a crucial input component for a widely used herbicide applied in diverse food and cash crops (such as corn, soybean, cotton, sugarcane, sunflower, etc). The global market for this herbicide is large and steadily growing.
The company said that contract offers a revenue potential of approximately over Rs 3,000 crore over a period of 9 years, with the contract supplies commencing from current fiscal year.
The product (agrochemical intermediate) is an integral component of AIL’s existing integrated product portfolio, with AIL being a leading manufacturer of this product in India. AIL’s current CAPEX plans, across its existing manufacturing locations, are sufficient to meet this contract requirement and the company does not anticipate any additional CAPEX for this.
“The global agrochemical market is valued at US$ 74 billion and is growing at a CAGR of about mid to high single-digit. Over the past decade, the easternisation of sourcing of the agrochemicals and its intermediates had been increasing steadily. This can be attributed to better cost competencies, global scale and size of manufacturing capabilities, challenges posed by energy crisis in developed economies, amongst others. This trend has resulted in an increased outsourcing of intermediate manufacturing to costcompetitive regions such as China and India,” the company said in press release.
Rajendra Gogri chairman & managing director at Aarti Industries said, “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. We have established longstanding relationships with various customers across different end-user categories including the global industry leaders. And this contract underscores our commitment to transforming these relationships into additional future long-term opportunities.
Further he added, “In addition to fortifying our association with this prominent customer, who is amongst the leading players for this end-use, this contract provides us an opportunity to grow in the high-value agrochemical space.”
Aarti Industries is engaged in manufacturing and dealing in speciality chemicals and pharmaceuticals.
The specialty chemical maker’s consolidated net profit jumped 30% to Rs 91 crore on 2.83% increase in net sales to Rs 1,454 crore in Q2 FY24 over Q1 FY24.
The scrip hit 52 week high at Rs 649.50 in intraday today.
|