In a significant development that underscores the environmental accountability of listed companies, Neogen Chemicals Limited has disclosed an official communication from the Gujarat Pollution Control Board (GPCB) following the fire incident that occurred at its Dahej SEZ facility in the early hours of March 5, 2025.

The company, which had earlier updated the exchanges on March 5 and March 7, 2025, regarding the fire at its Multi-Purpose Plant (MPP3)—including the warehouse and tank farms—has now received a formal direction from GPCB, dated April 22, 2025. This regulatory step comes under Section 31A of the Air (Prevention and Control of Pollution) Act, 1981, and mandates that Neogen cease utilization of the affected facilities until approvals for resumption are granted by both the Department of Industrial Safety and Health (DISH) and GPCB.

Environmental and Financial Impact

As part of the direction, GPCB has imposed an Environmental Damage Compensation (EDC) fee of ₹34.60 lakhs. Additionally, the company has been instructed to submit a bank guarantee worth ₹7.5 lakhs to ensure compliance with the regulatory conditions set forth for operational reinstatement.

Interestingly, GPCB’s directive does not mention any specific violations or contraventions under existing laws, suggesting that the move is precautionary and impact-driven, focused on environmental and industrial safety post-incident rather than penalizing proven misconduct.

The company stated that the MPP3 plant and the adjacent infrastructure will remain shut until further notice. Reconstruction of the damaged assets is expected to take 9–12 months, with planning and mobilization of resources already underway.

Operational Contingency and Revenue Guidance

To mitigate the disruption caused by this shutdown, Neogen Chemicals has implemented a production reallocation strategy. Certain specialty products have been shifted to other facilities, based on customer approvals, and additional support is being derived from planned expansions at the Patancheru facility. This proactive approach aims to minimize business disruption and earnings volatility in the current and upcoming quarters.

Despite the adverse incident and the temporary suspension of one of its critical units, Neogen has reiterated that its previously issued revenue guidance remains unchanged. The disclosure from the company emphasized that its financial outlook, as mentioned in the March 7, 2025 update, continues to hold, indicating robust operational resilience and contingency planning.

Regulatory Compliance and Transparency

Neogen’s detailed disclosure complies with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and includes all necessary particulars as prescribed by SEBI Circulars dated July 11 and July 13, 2023. The company has also uploaded the complete update on its website, adhering to corporate governance and investor transparency norms.

This latest development places a spotlight on how chemical and specialty manufacturing firms must navigate industrial hazards, regulatory scrutiny, and stakeholder communication—all while ensuring continuity in business operations and commitment to environmental compliance.

Looking Ahead

As reconstruction proceeds at the Dahej facility, industry observers will closely watch how Neogen executes its business continuity and disaster recovery plans. The company’s ability to uphold revenue projections, maintain stakeholder confidence, and cooperate fully with environmental authorities will be pivotal in its long-term credibility and growth trajectory.

This case also serves as a case study for other companies operating in sensitive industrial sectors, emphasizing the importance of regulatory preparedness, incident reporting, and contingency production capacities.

For now, Neogen Chemicals Limited appears poised to navigate this challenge with strategic agility and regulatory cooperation, ensuring minimal long-term impact while addressing environmental concerns raised by the fire incident.

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