Aether Industries, a specialty chemicals manufacturer, has amended its strategic supply agreement with Baker Hughes, a global energy technology company. This amendment finalizes the volume and pricing for the first six products to be manufactured by Aether for Baker Hughes. The initial agreement, signed in June 2024, outlines a five-year term with options for extension. Aether will produce these products at its newly operational Site 4 facility. This production marks the first time these specific chemicals will be manufactured in India.
The agreement is significant for Aether, with a potential revenue of over ₹3 billion, representing approximately 50% of Aether’s projected FY24 revenue. The pricing for the molecules is estimated to be in the range of USD 2 to 3 per kilogram. These are considered low-price, high-volume molecules.
This collaboration is a key development for both companies. For Aether, it signifies a major step into contract manufacturing for global distribution and strengthens its relationship with a leading player in the energy sector. For Baker Hughes, it supports their “Make in India” initiative and potentially enhances their supply chain efficiency.
Key Insights:
- Focus: The news centers on the finalization of a strategic supply agreement between Aether Industries and Baker Hughes, highlighting the commitment of both companies to the partnership.
- Key Event: The amendment of the agreement solidifies production volumes and pricing, paving the way for the commencement of manufacturing.
- Potential Impact:
- Aether Industries: Increased revenue, enhanced visibility in the global market, and potential for future collaborations with Baker Hughes.
- Baker Hughes: Diversification of its supply chain, support for local manufacturing in India, and potential cost advantages.
- Specialty Chemicals Sector: Reinforces India’s growing capabilities in specialty chemical manufacturing and its attractiveness for international collaborations.
Investment Implications:
This development is positive for Aether Industries. The agreement provides revenue visibility and strengthens the company’s growth prospects. Investors may consider this as a sign of Aether’s increasing prominence in the specialty chemicals sector. However, it’s crucial to monitor the company’s execution and its ability to meet the demands of this large-scale contract.
In the broader market context, this news aligns with the Indian government’s “Make in India” initiative and highlights the increasing investment in the country’s manufacturing sector. This trend could present opportunities for investors interested in companies operating within this space.
Sources:
- Aether Industries Limited Signs Strategic Supply Agreement with Baker Hughes – Angel One:https://www.angelone.in/news/aether-industries-signs-strategic-supply-agreement-with-baker-hughes
