Aarti Industries' Rs 4,000-crore contract with global firm cancelled
15th Jun 2020

Aarti Industries’ long-term contract with a global firm to supply agrochemicals worth Rs 4,000 crore has been cancelled. The company in June 2017 had entered a 10-year contract with a global agrochemical major to supply a high-value agrochemical intermediary with application in herbicides. The contract was expected to generate revenue of about Rs 4,000 crore over the 10-year period.

Upon the triggering of this termination event, the guarding provisions for compensation under the contract come into effect. As a result, the compensation to the company is estimated to be in the range of $120 million (Rs 913 crore) to $130 million (Rs 989 crore).

Aarti Industries is one of the most competitive benzene-based speciality chemical companies in the world. It is a rare instance of a global speciality chemicals company that combines process chemistry competence (recipe focus) with scale-up engineering competence (asset utilization).