India's Aarti Industries wins $1.6bn Sabic US contract

31/12/2017 05:51 AST

Indian speciality chemicals company Aarti Industries said it has secured a Rs100 billion ($1.56 billion) contract from global chemical conglomerate Saudi Basic Industries Corporation (Sabic) for supply of for supply of speciality chemicals intermediate to its US affiliate.

As per the deal, the Mumbai-based company will supply a high value speciality chemical intermediate to Sabic Innovative Plastics US for 20 long years. The supplies are expected to commence from 2020.

Aarti Industries is India’s leading producer of Benzene-based basic and intermediate chemicals and also one of the leading suppliers of dyes, pigments, agro-chemicals, pharmaceuticals and rubber chemicals to global manufacturers.

The company ranks globally within the Top 4 for 75 per cent of its portfolio and is ‘Partner of Choice’ for various major global and domestic customers, said the company in a statement.

Speciality chemicals segment contributed 81 per cent, Pharmaceuticals segment contributed 14 per cent and Home & Personal Care segment contributed 5 per cent to its total FY17 consolidated revenues.

With this deal, the Indian group is set to enter a new chemistry range, a first-of its-kind in India and its end product is amongst the major growth initiatives for the customer, said the statement.

Aarti unveiled plans to setup a dedicated large scale manufacturing facility for production of this speciality chemical intermediate at an investment of $35-$40 million.

The upcoming facility will be a 100 per cent export oriented unit in the Indian state of Gujarat, it added.

On the contract win, Rashesh C. Gogri, the vice-chairman and managing director, said this deal is testament to the increasing brand equity of AIL among targeted customers.

Under the terms of the agreement, the Sabic unit will be providing $42 million as an advance to the company in instalments, which shall be adjusted against the supplies in future,. he added.

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