Hebei Lansheng Biotech Co., Ltd. ShangHai Yuelian Biotech Co., Ltd.

Leading the Way in Agrochemical Intermediates: Aarti Industries' Differentiated Value Propositionqrcode

Nov. 1, 2023

Favorites Print
Nov. 1, 2023


AgroPages recently had the privilege to speak with senior executives from three major Indian CRAMS (Contract Research and Manufacturing Services) companies - PI Industries, Deepak Nitrite and Aarti Industries. These companies are trusted manufacturing partners for global agrochemical giants, providing a range of services from process research and development to large-scale production of intermediates and active ingredients. 

We interviewed Mr. Mayank Singhal, Vice Chairperson and Managing Director at PI Industries; Mr. Maulik Mehta, CEO and Executive Director of Deepak Nitrite and Mr. Rajendra V. Gogri, Chairman and Managing Director, Aarti Industries. Through our in-depth discussions, we aimed to understand the unique strengths and value propositions of these CRAMS leaders that make them the partner of choice for agrochemical multinationals. 

Here below is the text transcript of the interview with Rajendra V. Gogri, Chairman and Managing Director of Aarti Industries.


Rajendra V. Gogri, Chairman and Managing Director of Aarti Industries

It seems Aarti Industries has significant experience and expertise across diverse chemistries and unit operations, as well as strong R&D capabilities. Could you elaborate on how this experience helps you meet the complex needs of agrochemical companies?

• With over 40+ years of experience in the chemical industry, Aarti Industries ("AIL") has built multiple global-scale value chains, viz. Nitro Chloro Benzenes, Di-Chlorobenzenes, Phenylenediamines, Nitro Toluenes, Sulphuric Acid & downstream chemicals. 

• We handle several hundred tons of hazardous raw materials like chlorine, ammonia and ethylene daily. We work with 1,000+ customers in various industries ranging from agrochemicals and pharmaceuticals to textiles and colorants. Such vast experience across a wide product portfolio has enabled us to engage with and build lasting relationships with global leaders in the agrochemical industry. 

• As chemical intermediates players, we focus on building global scale assets and a deep understanding of chemistries and unit operations. Aarti has a strong R&D team (250+ scientists) supported by a capable team of engineers (100+ engineers) that enables in-house development and improvement of process technologies.

• We strongly emphasize sustainability and are among the few companies in the Indian chemical industry to publish annual sustainability reports (www.aarti industries.com). 

• Climate change events worldwide, coupled with geopolitical uncertainties, have had a deleterious effect on core agricultural output, making the demand for agrochemicals highly volatile. In addition, global agrochemical players are focused on strategic derisking of their supply chains to avoid over-reliance on specific geographies. Global players increasingly seek sustainability, reliability and agility as key factors in choosing and working with their strategic partners. 

• In its current capex cycle, which entails a total outlay of approximately $400m, we are focusing on building chemical complexes where assets are more versatile and can be used for diverse products. This will help us manage demand variability in products and ensure optimal utilization of assets amidst volatile market environments, enabling custom to benefit from cost leadership in conjunction with volume flexibility. 

• AIL has a unique competitive advantage in being backwards integrated right up to the petrochemical feedstock, standing out from the pack as a partner of choice, and offering a supply chain fortified from global externalities.

Image 2 of 4.jpg

Can you give examples of some long-term partnerships you have with major agrochemical companies and what you provide for them?

We have several long term supply contracts with top agrochemical multinationals, who are looking for supply reliability and pricing transparency. Given its deep backward integration and expertise in diverse chemistries at scale, we are able to support its customers with long-term formula-pricing linked to commodity prices. The backward integration provides supply assurance whereas the formula linked prices provide pricing visibility. This enables customers to better plan their downstream marketing and distribution activities. 

One such example is an asset we set up in 2016, supported by a long term agreement with a customer. This asset enabled us to supply a key intermediate which had no erstwhile production outside of Europe and China. The asset was provided by pipeline supply of a key petrochemical intermediate, which was possible because of our long term relationship with the supplier concerned. 

The product not only helped us expand our presence in one of our key value chains but also opened opportunities for 3-4 other products with similar chemistries, which are also supplied to the original customer. We view long-term partnerships as symbiotic relationships that enable the parties involved to build on each other’s strengths and create superior value for all stakeholders.

What new technologies or innovations in manufacturing processes have you implemented recently to improve efficiency or reduce costs?

Aarti Industries actively works on improving its existing manufacturing plants by increasing productivity, optimizing workflow, and implementing advanced automation technologies to stay at the forefront of the industry and meet the growing demands of our customers. We have dedicated R&D and technology teams that explore newer technologies and process intensification opportunities for existing products. Capabilities in computational fluid dynamics, process simulations, and safety tools are being developed and improved upon, boosting the overall efficiency, accuracy, and reliability of our engineering and manufacturing processes. AIL is working on flow chemistry, vapour phase chemistry and other cleaner technologies to reduce the environmental impact and improve operational safety for its products. 

To expand its reach into new market segments, we have successfully scaled up new chemical processes such as Photochemistry, Fluorination chemistry, and Grignard chemistry, among others. We are setting up a new greenfield site that will house an integrated value chain in addition to pilot and multipurpose facilities.

How does your company invest in R&D to develop improved manufacturing processes for complex molecules?

In March 2020, we commissioned a new state-of-the-art innovation center at Navi Mumbai, Maharashtra. Spread across a total area of 50,000 sq. ft., our Research and Technology Centre (ARTC) houses 70+ fume hoods, where a highly capable team of 250+ scientists can work on up to 50 products in a year. 

We have demonstrated our expertise in various chemistries at scale by running continuous and semi-continuous processes in Hydrogenation, Chlorination, Nitration, Ammonolysis, etc. In the past couple of years, AIL has developed in-house capability for complex chemistries such as Balz-Schiemann reaction, Photochlorination, AHF fluorination, Grignard reaction, etc.


How does your company stay on top of the latest regulatory requirements and ensure compliance?

To guarantee and adhere to the legal and regulatory framework, we have implemented a third-party managed IT-based Compliance Management System, which houses all applicable regulations and necessary compliances. It has an inbuilt alert system that notifies relevant personnel about upcoming compliance procedures. Further, AIL also has a dedicated compliance cell at the corporate level that oversees existing and emerging compliance requirements. Demonstrating our commitment towards excellence, reliability and sustainability, all our sites are IMS certified (ISO 9001:2018, ISO 14001:2018, ISO 45001:2018), thereby signifying our compliance with quality, environment, and health and safety requirements. 

Our sites are Ecovadis Gold certified and the company has been granted the Responsible Care Certification. The R&D and Technology offices of Aarti Industries are ISO 27001 certified that enables protection of confidential information received from our partners. 

At AIL, there is a robust OHS governance system headed by the Corporate Safety and Compliance Head and dedicated teams responsible for OHS across all our sites and offices. In addition to internal audit protocols reviewed by the Company’s directors, we undergo focused third-party compliance audits of our systems and processes.

Where do you see the biggest growth opportunities and challenges in the agrochemical intermediates market in the coming years?

Growth in agrochemical business is likely to revolve around 4 broad themes: 

Products going off patent: As reported by Agropages some time back, around 19 active ingredients are coming off patent in the next 5 years. As per this report, the combined global market size of all these products combined was in excess of $5 billion dollars in 2019. This figure gives an indication of the huge opportunities which the market offers. 

Regulatory action on legacy products: If the prevailing regulatory environment is any indication - cases such as EU’s action on ″forever chemicals″, or the scrutiny that Glyphosate, Dicamba, etc. continue to face - it is clear that older technologies will increasingly come under regulatory pressure or reassessment. Going ahead, growth will be led by newer, cleaner technologies and products, with lower usage per acre, that are proven to have minimal environmental impact. 

More focus on sustainability and product carbon footprint: Given the impact of agriculture and its requirements on climate change, governments across the world will increasingly focus on reducing carbon emissions across value chains. In this situation, global agrochemical players will increasingly prefer suppliers that can reliably measure, report and reduce their product carbon footprint.

Strategic Support in Developing New Molecules: Innovative global MNCs seek reliable suppliers to provide strategic support, especially in the early stages of developing new molecules. Developing new chemical intermediates and providing sample supplies for lab-stage trials are crucial. We have established ourselves as the preferred partner by offering long standing relationships, emphasis on information security, and pioneering investments in R&D. With a strong foothold in the supply chain of new molecules, AIL is poised for growth, with new volumes and products being added in the future.

Image 1 of 4.jpg

What sustainability and ESG initiatives have you implemented in your operations?

● Environment 

○ Aarti Industries is committed towards minimizing its carbon footprint to reach net-zero emissions. Addressing both direct and indirect sources of greenhouse gas (GHG) emissions is a part of our efforts to reach this objective. 

○ 11 out of 16 manufacturing units of AIL are Zero Liquid Discharge (ZLD), which means there is no liquid effluent exiting the factory. 

○ At AIL, the total water recycled was ~45% of the total water withdrawal in 2021-22. 

○ In our endeavour towards energy efficiency, we set up a 6.5 MW cogeneration plant, recovering energy from the Sulphuric Acid Plant. Our 2.35 MW Coal Fired Cogeneration Power Plant generates Medium and Low Pressure Steam from steam turbines used for heating applications. This has substantially increased the overall Thermal Efficiency and reduced coal consumption per unit power as power produced without steam condensation. 

○ We are exploring Biofuel as an alternative to Coal for Boiler applications. While the current biofuel boilers are meant for small scale applications, we are working with technology suppliers to utilise 100% biofuels for economies of scale boilers. 

○ We have signed a contract for 13.5 Megawatts of hybrid renewable (solar & wind) sources of electricity. We have also prioritized sourcing of renewable power and installed rooftop solar power plants at several locations. Complementing our Sustainable journey, we have been publishing Sustainability Report for 5 years now. 

● Social 

○ We have adopted the requirements of the UN Global Compact, International Labour Organisation’s (ILO) Declaration, etc. in its day-to day working. 

○ Our CSR initiatives have positively impacted over 1.3 million people in the vicinity of its manufacturing sites. 

○ In a bid to cultivate a diverse, inclusive, and secure workplace and enhance gender diversity, we have focused on improving infrastructure for female employees, implemented affirmative action, and offered guidance and counseling to its employees. This has enabled us to increase its female employees by 11% from FY 2022. AIL’s Board consists of 50% independent directors with 18.75% female representation. 

○ Our flagship BE SAFE Programme, which stands for "By Employees Sustainability Assurance for Employees," has the stated objective of assuring health checks at all facilities to achieve Zero Harm. BE SAFE huddles are held daily through video conferencing at all our sites to promote the safety message. In the past two years, we have spent approximately INR 800 million on improving chemical & workplace safety. 

● Governance 

○ We have a Robust Compliance framework covering 78 acts, 101 rules and 10,000+ compliance provisions. 

○ We also have robust Information Security Practices - Its Technology Centre and R&D are ISO 27001 certified. All of its manufacturing facilities are ISO 14001:2015 & 45001: 2018 certified.

It's clear Aarti Industries has gained from the agrochemical sector's expansion. What differentiates your value proposition from other players as you look ahead?

Other than China, few other countries globally can boast of having as evolved a chemical ecosystem, manufacturing capability and talent pool as India. Agrochemicals are currently a US$ 5.5 billion market in India, growing by ~8% annually. AIL, as a part of this ecosystem has clearly benefited from the industry’s growth and has developed strong ties with both global and domestic customers. 

The growth in the agrochemical sector is often dependent on local access to key raw materials. Our backward integration at global scales to commodity chemicals enables the availability of critical raw materials that are required for manufacturing advanced intermediates and AIs at competitive prices. There have been numerous instances where our entry into specific value chains has engendered investments from other industry players to create world class agrochemical manufacturing in the country. We are now foraying into the toluene chlorination value chain, where key intermediates are predominantly import-dependent. Over the next 2-3 years, we expect that our presence in the chlorotoluene value chain will encourage further investments into downstream intermediates and AI manufacturing in the country. 

We have well positioned for sustained growth owing to multi dimensional strengths with respect to rich chemistry experience, a robust R&D infrastructure, experience in operating global scale plants, a large talent pool, and most importantly, a sustainability-centric culture.

This article was initially published in AgroPages' '2023 India Focus' magazine.

If you would like to share your company's story. Please contact Christina Xie at christina@agropages.com


Source: AgroNews


More from AgroNewsChange

Hot Topic More

I wanna post a press Comment


Subscribe Email: *
Mobile Number:  





Subscribe India Special Biweekly to send news related to your mailbox