MANILA – D&L Industries, a manufacturer of food ingredients, plastics, and oleochemicals, is doubling its capital expenditures (capex) to PHP3 billion this year to support growth even amid the coronavirus disease 2019 (Covid-19).
In a press briefing Thursday, 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 our next generation expansion facilities, which will be the foundation of our next leg of growth, is on-track and set to be operational by the second half of 2021,” he said, adding the expansion plan will increase its export sales to 50 percent of total revenues.
Lao is optimistic about the “long-term growth story” of the company even after its net income declined by 18 percent to PHP2.62 billion in 2019 from PHP3.19 billion 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 on stronger macro-economic fundamentals, such as the early passage of the 2020 budget, further interest rate cuts, and softer inflation outlook despite Covid-19.
On the supply side, Lao said they have the advantage over competitors since they have large inventories and only about 15 to 20 percent of their raw materials come from China, and they have already found other suppliers for these.
“So some of our customers who have been buying from our competitors have turned to us and we are gaining some market share,” he added. (PNA)
