Aarti Industries Limited said it has amended its exclusive long-term supply agreement with a leading global chemical company to deepen integration and extend the supply framework for a high-value speciality chemical intermediate. The amendment formalises an enhancement of the Main Agreement and underlines a sustained long-term engagement. Aarti Industries Limited (AIL) will continue to operate under the terms of the Main Agreement.

As part of the expanded scope AIL will undertake a backward integration project to manufacture a significant share of a critical feedstock in-house and transition to an integrated end-to-end manufacturing model. The backward-integrated facility is planned at the existing site in Dahej SEZ, Gujarat, and is intended to meet requirements under the Main Agreement. The company expects to invest approximately Rs two to two point five billion (bn) over the next two years.

The enhanced integration is intended to enable highly integrated end-to-end production from AIL facilities while delivering operational expenditure and freight optimisation through in-house manufacturing compared with external sourcing. The move is also anticipated to improve supply chain resilience and enhance safety in materials handling. The combined efficiencies are expected to deliver operating leverage over time.

While the backward integration is not expected to materially affect topline growth it is expected to positively influence EBITDA margins over the residual tenure of 15 years under the Main Agreement through integration efficiencies and improved utilisation. The development is presented as a strategic progression that strengthens AIL's position as an integrated supply solution partner for global chemical leaders. The company framed the expansion as evidence of its ability to build and scale enduring global partnerships while increasing scope and value.

Senior management indicated that the initiative will enhance supply security and cost competitiveness and support the objective of positioning India as a preferred manufacturing partner for global majors in advanced chemistries. The announcement reiterated the company's commitment to sustainable practices and long-term value creation for stakeholders.