D&L Industries Doubles Capital Expenditure to USD 59 million

Mar 2020

D&L Industries, Inc., the country’s largest specialty foods ingredients, plastics and oleochemicals firm, is doubling its capital expenditure (capex) this year to about PHP 3 billion (USD 59 million) from PHP 1.55 billion (USD 30 million) in 2019 as it remains confident of long-term prospects.

In a recent press briefing, D&L president Alvin Lao said this year’s capex will be mainly spent on the expansion of its First Industrial Township (FIT) in Batangas.

The construction of its next generation expansion facilities, which will be the foundation of its next leg of growth, is on-track and set to be operational by the second half of 2021. The expansion plan will increase its export sales to 50% of total revenues.

Mr Lao is optimistic about the “long-term growth story” of the company even after its net income declined by 18% to PHP 2.62 billion (USD 51 million) in 2019 from PHP 3.19 billion (USD 63 million) the previous year. He attributed last year’s lower earnings to the confluence of external factors, including the delayed passage of the government budget and indirect effects of a trade war, which affected mainly its non-food business.

D&L is expecting its businesses to recover this year on the back of stronger macro-economic fundamentals, such as the early passage of the 2020 budget, further interest rate cuts, and softer inflation outlook. However, the firm faces uncertainties due to the COVID-19 disease. According to Mr Lao, the firm has an advantage over competitors since they have large inventories. However, Mr Lao said they remain wary of possible supply chain disruptions, negative consumer sentiment and port congestion.

(Sources: Philippine News Agency; Manila Bulletin)

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