At Aarti Industries, our vision is to build a global corporation that is the most competitive across its selected niches, geographies and market cycles

We believe that this can be achieved if our customers continue to treat us as an extension of their own companies so that we reinforce our position as a partner of choice as opposed to being mere price-based vendors. The distinction between vendorship and partnership is not as simple as it appears. In a world where there is a greater premium on comprehensive eco-system sustainability – where each building block plays a critical role in the overall whole – the vendor needs to demonstrate the same standards and priorities as its downstream global customers. I am pleased to state that over the last decade this singular evolution – from an Indian company servicing global markets to what is fundamentally a global company selecting to manufacture out of India – has been responsible for our consistent growth. We were a C790 crs revenues Company in FY05-06; we are a C2780 crs revenues organization today. We were a C55 crs PAT Company in FY05-06; we are a C257 crs PAT organization today. We were a C626 crs market capitalization Company in FY05-06; we are a C4700 crs market capitalization organization today.


If there is one over-riding attribute responsible for our consistent market outperformance across the last decade, it is that we took a long-term perspective of our business when we were a relatively small company. During those days, what was important was not profitability alone, but also sustainability. Even as it appeared tempting to explore short cuts, we selected to build by the book though this took relatively longer. These are some of the ways in which our sustainability focus manifested itself:

  • It would have been easy for us to invest in production capacities; we selected to invest concurrently in environment-protecting equipment and processes even before these became mandatory
  • It would have been easy for us to be completely manufacturing-driven; we invested in researched product and process development that made it possible to combine a comprehensive value chain with enhanced operating efficiency
  • It would have been easy to invest and forget; we continued to upgrade existing technologies in line with the prevailing standards of the day, so that we delivered the best product quality at the highest operating efficiency at the lowest manufacturing cost
  • It would have been convenient to renege on contracts (raw materials and end products) in a volatile space; we respected contracts irrespective of external market movements, creating a reputation around credibility


This commitment to do the right things in the right way has resulted in distinctive competence and character. Aarti Industries is a rare instance of a global speciality chemicals company that combines process chemistry competence (recipe focus) with scale-up engineering competence (asset utilization). We believe that this distinctive capability has extended the Company from lab scale competence to shop floor competitiveness – the ability to extend what has been visualised at a micro level to macro efficiencies. Over time, this ability has graduated our personality from a vendor servicing the timely needs of downstream customers to a partner helping grow the customer’s business


ven as we began to invest in this distinctive way of doing business a number of years ago, we believe that the payback for this strategic direction is only just beginning. The large downstream customers appraise vendor capabilities through the long-term across parameters like domain knowledge, product and process development competence, Balance Sheet integrity, responsiveness to market needs, product customization mind-set (over mass manufacture) and overall competitiveness. Generally these large customers test vendor capabilities with small batches of orders of relatively less complex products. At Aarti Industries, I am pleased to state that we have graduated extensively along this relationship curve. Over 80% of our revenues during the last financial year were derived from customers with whom we had worked for five years or longer; virtually every single one of our customers reported account growth; our largest customer accounted for no more than 9% of our FY15- 16 revenues, indicating that we had successfully extended this operating model across a large number of customers. Best of all, we did not just provide material for one of the plants of these global customers; we provide a range of products needed by the different plants of these global customers, gradating us from the conventional make-to stock to the robust make to-order. The result of this approach is that whenever we commission new capacities, we are largely covered for prospective offtake. This revenue visibility makes it possible for us to plan for the long-term; it would be fair to indicate that while we are secured of our prospects until 2019, the management is presently engaged in business planning beyond this operating horizon. At Aarti Industries, we believe that the relevance of our customer-centric approach will only increase. Among large global customers, there is a perceptible movement away from a large number of vendors to a small consolidated number; there is a movement away from small volumes being brought from many to large volumes being procured from a few with corresponding procurement economies; there is a movement away from vendor interaction to strategic partnerships; there is a growing focus on ecosystem predictability and sustainability over short term opportunism. At Aarti Industries, we could have responded to this reality in two ways. One, grown in line with the evolving needs of our customers - no more, no less. Two, grow wider than their needs in the given product categories of one’s presence and, in doing so, carve out a larger share of the customer’s wallet. At Aarti Industries, we have invested in the second strategy. After establishing ourselves for about three decades in benzene-based derivatives, we are making a decisive extension to toluene based derivatives starting this current financial year. Even as these spaces may appear different, there is an underlying thread running through them: they operate around the same chemistries and address the same customers, which could translate into a quicker ramp-up and returns. After exploring diverse opportunities in the space of agrochemicals, we perceive a growing opportunity in classical herbicides.


I wish to assure shareholders that our relationships are robust and growing, our Balance Sheet possesses adequate resources to sustain our business investments, our annual profitability generates a large pipeline of investable resources, our banker relationships are translating into adequate resource availability at declining costs, our competitiveness makes us one of the lowest cost producers in the world and the demand of a number of our end products are independent of the economic cycle. This makes us a partner of choice for some of the largest global downstream chemical companies. In view of these realities, I believe that Aarti Industries is at the cusp of robust sustainable growth in respect, relationships, revenues, margins and profits.


- Rajendra Gogri, Chairman and Managing Director