Aarti Speciality Chemicals gets approval under Pharma PLI Scheme

Aarti  Speciality Chemicals, a wholly-owned subsidiary of Aarti Drugs, stands to be one of the beneficiaries of the Government of India’s recently approved Production Linked Incentive (PLI) for the pharma sector.

The Government of India’s Department of Pharmaceuticals launched a Production Linked Incentive (PLI) Scheme to incentivise pharma manufacturers to set-up greenfield projects in India with minimum domestic value addition in four different target segments (two in fermentation-based – at least 90 per cent and two in the chemical synthesis based – at least 70 per cent) with a total outlay of Rs 6,940 crores. The objective of the scheme is achieving self-reliance and reducing import dependence in ‘Key Starting Materials (KSMs) / Drug Intermediates / Active Pharmaceutical Ingredients (APIs)’.

The applications under four different target segments were invited with November 30, 2020, as the last date.

Aarti Speciality Chemicals received approval for 2-Methyl-5Nitro-Imidazole (2-MNI) with a committed production capacity of 4,000 MT per annum under Target Segment III (Key Chemical Synthesis Based KSMs/Drug Intermediates). The rate incentive will be 10 per cent of sales value per annum for a period of 6 years – FY23 to FY28.

Adhish Patil, CFO, Aarti Drugs said, “We welcome the government’s approval to our application under PLI scheme to manufacture 2-Methyl-5Nitro-Imidazole (2-MNI) with a committed production capacity of 4,000 MT per annum. This is a very positive development for us, as it will help the company to diversify its product portfolio, increase the top-line and enhance the profitability and margin profile of the company.

He added, “The committed CAPEX will be funded through a mix of debt and internal accruals. We are expecting the Capex for this project to be spread over a period of 18 months. This will further reduce our dependence on imports.”