MANILA -- Food and plastic input manufacturer D&L Industries is optimistic about the second half of the year given its initiative to boost exports.
This, after the company posted a 7.5-percent decline in net income in January to June to PHP1.41 billion, from PHP1.53 billion during the same period last year.
In a press briefing on Wednesday, D&L Industries president Alvin Lao said total volume fell 9 percent during the six-month period brought about by the confluence of external factors which dampened demand in industries that the firm caters to.
Lao particularly cited negative consumer sentiment due to the inflation scare in 2018 that persisted in the first half of the year.
It was also affected by the uncertainties in the global market brought about by the United States-China trade war, he said.
“We don’t think it can get worse (in the next half). We’re hoping that things should stabilize, but it’s really hard to project how the second half will look like,” he added. “We’re trying our best to do what we can.”
Lao noted the expansion in export zone and “pack at source” initiative of the company, noting export sales remains as one of the key pillars of growth.
“The company remains optimistic that it will reach its long-term target export contribution of 50 percent. The ongoing construction of its new plants in export zones is expected to be completed in 2021. This will add a significant amount of capacity, focusing mainly on higher value and higher margin products which will allow the company to cater to more customers in both local and overseas markets,” D&L Industries said in a statement.
The new plants are located in Tanauan, Batangas.
The company said the upcoming facilities will add the capability to manufacture downstream packaging and will allow it to capture a bigger part of the production chain.
While it primarily sells raw materials to customers in bulk, the new plants will allow it to “pack at source”.
“This means that D&L will have the ability to process the raw materials and package them closer to finished consumer-facing products. This will enable D&L to move a step closer to its customers by providing customized solutions and simplifying their supply chain. All these investments and strategic efforts should lead to a more entrenched relationship with customers while providing an additional runway for growth,” it added.
Exports as percentage of total revenues stood at 19 percent in first half of 2019.
In peso terms, export revenues declined by 25 percent mainly due to a combination of the negative sentiment due to the trade war and lower commodity prices which were passed on to customers.
D&L Industries is engaged in product customization and specialization for the food, chemicals, plastics, and aerosol industries. (PNA)
