2 weeks ago
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Richmond Mercurio - The Philippine Star
March 3, 2025 | 12:00am
MANILA, Philippines — D&L Industries Inc., the country’s leading specialty food ingredients and oleochemicals producer, is set to spend around P1 billion for capital expenditures this year, primarily to support minor expansions in its new Batangas plant.
The amount is lower than the P1.16 billion spent by D&L last year.
After the company’s capex peaked in 2022 at P3.5 billion, D&L president Alvin Lao said that the amount is expected to continue to decline.
“There are some projects that were started at the main phase of construction a couple of years ago that have been completed recently and we still have to release the retention fees,” Lao said.
“At the same time, we are still making minor expansions, not as big as what we’ve done in the past couple of years, but on a much smaller scale. So there will still be some capex, but the expectation is for it to be lower than what we did last year,” he said.
The continued ramp up in operations of the company’s Batangas plant has helped offset incremental expenses last year, allowing the plant to book its first full year profit which stood at P244 million.
D&L said that the profitability of the new plant in 2024 was ahead of the initial schedule – or within two years of operations, which was based on the performance of the older plants that the company had built over the years.
“We are pleased to see our Batangas plant operations yielding promising results. This gives us the confidence that, over time, our industry leading facilities will continue to play an increasingly significant role in boosting our overall net income,” Lao said.
D&L expects its new Batangas plant to continue ramping up operations this year, with its contribution to the company’s net income for 2025 seen increasing.
“In general, the trend should be upwards, although in some quarters, it might go down to below P200 million or even P100 million. But it will be seeing higher lows and higher highs in the succeeding quarters, so it will be definitely higher for the full year and its contribution to the bottom line will also be higher,” Lao said.
Lao said that the company has only just started to tap into the plant’s potential given the vast opportunities it sees in both local and international markets.
“Our new plant in Batangas gives us the capacity and capability to cater to bigger export customers. This puts us in a prime position to capture opportunities arising from the evolving international trade environment,” he said.
D&L is optimistic that the momentum of the company’s strong growth in the fourth quarter of 2024 will carry over to this year.
Lao said that the company is “enthusiastically optimistic” on its growth prospects this year after finishing 2024 on a high note.
D&L registered a two percent year-on-year improvement in earnings to P2.3 billion in 2024 despite the higher operating and interest expenses associated with the company’s new Batangas plant.
In the fourth quarter alone, earnings stood at P530 million, up by five percent year-on-year and seven percent quarter-on-quarter.
“We see better earnings growth in 2025 underpinned by the continued ramp up in Batangas plant, coupled with near-term catalysts such as the boost coming from election-related spending, the further increase in biodiesel blend and continued economic recovery,” Lao said.
