Aarti Industries Limited (AIL) has announced a material amendment to its exclusive long-term supply agreement with a leading global chemical company, strengthening their strategic partnership and expanding the scope of collaboration.

As part of the revised arrangement, the company will undertake a backward integration project to manufacture a key feedstock in-house, which was previously supplied by the customer. This move will transition the production process to a more integrated, end-to-end manufacturing model for a high-value specialty chemical intermediate.

AIL plans to invest around ?200–250 crore over the next two years to set up the backward-integrated facility. The plant will be established at its existing manufacturing site in Dahej SEZ to support supply commitments under the long-term agreement.

The integration is expected to improve operational efficiencies through reduced sourcing and freight costs, strengthen supply chain resilience, and enhance safety in material handling. While the project may not significantly impact revenue growth, it is expected to improve EBITDA margins over the remaining tenure of about 15 years of the agreement through better integration and operating leverage.

Commenting on the development, CEO Suyog Kotecha said the expansion reflects the trust built through the long-standing partnership and will help the company deliver a fully integrated manufacturing solution while strengthening supply security and cost competitiveness.