Neogen Chemicals receives ₹15 Crore interim payment for fire incident, total ₹155 Crore received
Neogen Chemicals received an additional ₹15 Crore on-account payment for a fire incident, bringing the total received to ₹155 Crore. The company recognized a net loss of ₹13.56 Crore for FY25. Replacement plant commissioning is slated for H1FY27, with interim production shifted to other sites.
The fire incident caused significant losses, and while insurance payments are being received, the full settlement is pending. The temporary suspension of operations and the need for a replacement plant will have a medium-term impact on the company's financials and operations.
The company is receiving on-account payments from insurance, indicating progress in claim settlement. Steps are being taken to mitigate business disruption, and a replacement plant is under construction, suggesting a path towards normalcy.
Neogen Chemicals Limited has received an additional ₹15 Crore as a fourth on-account payment from its insurance company for the fire incident that occurred at its Dahej SEZ facility on March 5, 2025. This payment is based on the surveyors' interim report. The total on-account claim received to date, including this payment, amounts to ₹155 Crore.
The company previously disclosed the fire incident on March 5, 2025, at its Multi-Purpose Plant (MPP3) facility, warehouse, and tank farms. Further settlement amounts will be determined in subsequent stages after a comprehensive assessment of the loss of property, plant, equipment, and potential loss of profit due to business interruption.
In a related update, the company has recognized a loss of ₹348.16 Crore (₹362.90 Crore on a consolidated basis) due to damage to property, plant, equipment, and inventory. An insurance claim receivable of ₹334.60 Crore (₹348.82 Crore consolidated) has been recognized, considering deductibles and policy terms. The company has not accounted for loss of profit or excess reinstatement value as per accounting conservatism. The net impact of these losses and claims for FY 2024-25 is ₹13.56 Crore (₹14.08 Crore consolidated).
Production at the affected MPP3 facility, warehouse, and tank farms remains temporarily suspended. However, the construction of a replacement plant is progressing rapidly, with commissioning scheduled for the first half of FY27. To mitigate business disruption and earnings impact, Neogen Chemicals has shifted the production of critical specialty products to other sites with customer approval, complemented by planned expansions at its Patancheru Plant.
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