Aarti Industries and UPL Form Partnership to Increase Specialty Chemical Production

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Following the announcement of a 50/50 joint venture for specialty chemicals, the share prices of UPL and Aarti Industries soar.

Early trading saw a jump in the shares of UPL and Aarti Industries in response to the news of a joint venture agreement aimed at producing specialized chemicals. On May 24, shares of UPL were trading at ₹518.65, up 1.52% on the NSE, and shares of Aarti Industries were trading at ₹646.65, up 3.03%.

A press release from UPL on May 23rd states that the joint venture will function as a 50-50 partnership, with an emphasis on producing and distributing specialized chemicals that are essential to a range of downstream sectors.

The supply of downstream amine derivatives, which are utilized in paints and fertilizers for agriculture, will be the main emphasis of the JV. The joint venture, which seeks to address the need for high-value chemical solutions worldwide, will leverage the complementary strengths of Aarti Industries and UPL in order to take advantage of synergies in raw material supply and production knowledge.

The joint venture, called Augene Chemical Private Limited (ACPL), is anticipated to start making money in Q1FY27 and reach a maximum yearly income of ₹400–500 crore in the next two to three years. The two corporations will contribute ₹12.50 crore each in equity shares of ACPL as their initial investment. Over the course of about 24 months, the two partners will invest a total of ₹137.50 crore, which will include debt financing and cash investments.

Raj Tiwari, CEO of UPL's Specialty Chemical Business, expressed optimism on the partnership as a landmark deal between two Indian chemical industry leaders committed to delivering innovative speciality chemicals globally. He added “This collaboration is in line with our broader strategy of expanding into downstream derivatives of newer chemistries to spearhead the growth of specialty chemicals platform. This arrangement will leverage on long-standing relationship between UPL and AIL and the manufacturing capabilities of the two Companies.”