AIL, DFPCL join hands for offtake and supply of Nitric Acid for 20 years

Date:11-24-2022

Aarti Industries Ltd (AIL) and Deepak Fertilisers & Petrochemicals Corporation Ltd (DFPCL) have signed a binding term sheet for a 20-year period for offtake and supply of Nitric Acid. The parties plan to execute the formal agreement before the close of this calendar year. The supply arrangement comes into effect from April 1, 2023.

DFPCL is the largest manufacturer of Nitric Acid in South East Asia and AIL is one of the largest Nitric Acid consumers in India. This arrangement is a landmark and first of its kind long term association between two Indian chemical majors to augment each other’s business needs and mutual interests. The deal provides specific volume commitments with supply or pay, take or pay obligations by either party thereby providing adequate assurance, financial security and protecting either party’s commercial interests.

The deal benefits AIL by way of a long-term supply security for a key raw material. This would meet a majority of AIL’s requirements. It also helps AIL have a greater assurance in sourcing the key RM from DPFCL, who is an existing and the largest integrated nitric acid producer in India with multiple production sites. AIL, being a manufacturer for specialty chemical and downstream products, the present deal provides a strong supply security and enables AIL to focus on future growth opportunities, introduction of new value-added products and value chains for niche applications.

DFPCL, along with its subsidiaries, is the largest player in India for Nitric Acid and has a capacity of about 8.9 Lakhs MT for WNA and 2.3 Lakhs MT per annum for CNA. DFPCL is a market leader in the Crop Nutrition, Mining Chemicals & Industrial Chemicals sectors.