D&L cautious on 2024 growth prospects

Iris Gonzales - The Philippine Star
D&L cautious on 2024 growth prospects
D&L president and CEO Alvin Lao
STAR / File

MANILA, Philippines — D&L Industries Inc., the country’s leading specialty food ingredients and oleochemicals producer, is cautiously optimistic on its growth prospects for 2024.

In a recent interview, D&L president and CEO Alvin Lao said next year would likely be better as the costs of materials and labor, as well as interest rates, are not likely to rise further.

However, he said there would still be challenges because interest rates are starting at a higher level.

“But I don’t think interest rates will go up even more,” he said.

Another possible challenge next year is the impact of the expected El Niño phenomenon on the cost of raw materials, such as coconut oil, Lao said, adding that D&L is closely monitoring the situation.

Lao, however, is hopeful that raw material and labor costs will not go up as much next year compared to the hikes in 2023.

“This year, we were hit not just with the higher interest rates, we were also hit by higher costs. A lot of raw material prices were moving up. And then there were a lot of increases in minimum wage, labor. And then for us, another factor was new plant and equipment (cost),” Lao said, referring to the expenses the company spent for its new manufacturing facility in Batangas.

With the completion of the Batangas facility, which means more production lines, D&L expects more businesses to come in the next few months once the orders come in.

“A lot of our customers need to certify the new plant. A lot of them want to come down physically to walk around in the loop to make sure everything is moving. So, it really takes time,” Lao said, adding that even existing export customers the firm is servicing in its old facilities will need to re-certify D&L because of the new plant.

In all, D&L’s Batangas plant is more than double the capacity of all of the firm’s existing facilities combined and sets D&L for growth for the years to come.

“It’s a good foundation for us to really add a lot more volume and business,” he said.

Another cause for optimism for D&L is the government’s planned increase in the mandated biodiesel blend next year by 50 percent to B3, or three percent coco-biodiesel to 97 percent petro-diesel.

D&L’s subsidiary Chemrez Technologies is the country’s biggest producer of quality coco-biodiesel.

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