Sunita Tools Limited has entered an interim sales agreement to supply 240,000 empty NATO standard 155 mm M107 artillery shells to an overseas buyer, with deliveries scheduled at a rate of 10,000 units per month over 24 months. The arrangement obliges the company to deliver the full order within a two year period, subject to a defined grace period. The order is non exclusive, allowing the company to allocate production to other customers if necessary.

The agreement sets payment terms of a rolling 50 per cent advance covering three months supply and monthly payments for subsequent deliveries adjusted against the advance. The buyer is registered with the Department for Promotion of Industry and Internal Trade and will issue the requisite DP02 to receive supplies until the company secures its own registration. Approximate monthly billing is expected to be Rs 240 million (mn) once formalities are completed and advance payments have been received.

The company said the order will be executed from its existing manufacturing lines one and two and will leverage its expertise in precision CNC machining, ground plates and mould bases. With over 36 years of experience in engineering and mould base manufacturing, the company serves sectors including automotive, pharmaceutical, electronics, consumer goods, aerospace and defence. Management indicated that the agreement represents a strategic inflection point for expansion into international defence and aerospace markets and reaffirmed a commitment to quality and timely delivery.

The interim agreement will convert to a full sales agreement following clearance of a prototype batch, and initial supplies will commence as soon as possible. The company noted that forward looking statements in connection with the transaction are subject to risks and uncertainties including regulatory approvals, political and economic developments and technological factors, and undertook no obligation to update such statements. Stakeholders have been advised to await formal communications on progress.