D&L INDUSTRIES, Inc. is seeking incentives from the Philippine Economic Zone Authority (PEZA) for its planned manufacturing facilities in Batangas, as the company aims to grow its export business in the next few years.
In a disclosure to the stock exchange on Thursday, D&L said its units D&L Premium Foods Corp. (PFC) and Natura Aeropack Corp. submitted applications with PEZA for the registration of the manufacturing facilities to be built on a 26-hectare property inside the First Industrial Township. The First Industrial Township is designated as a special economic zone in Batangas.
“This initiative is part of the group’s strategic direction to grow the export business and focus on higher value and higher margin products,” it said.
Natura’s facility will manufacture coconut oil fractions, coconut-based surfactants, and consumer products for health care, personal care and home care.
If approved by PEZA, D&L will be entitled to incentives such as income tax holiday for a certain number of years, and tax and duty-free importation of raw materials and capital equipment. It will also have to comply with the 50% required export sales required for Filipino corporations in economic zones.
The listed food, chemical and aerosols manufacturer targets to complete construction and commissioning of the Batangas facility by 2021.
ROOM TO GROW
“We have room to grow. Our utilization now is 70%. So say in the next two or three years, we can still use our existing facilities for growth. But one consideration is it takes us time to build a new plant, so it’s now good to start planning and constructing, because we don’t want bottleneck,” D&L President and Chief Executive Officer Alvin D. Lao said in a briefing on Wednesday.
Mr. Lao said the company’s expansion program will also accommodate the demand from new contracts it could potentially sign in the future.
“Expanding to the new site will help our export business. So 50% of our business coming from exports, it will be something we will be able to achieve not just with our existing business, but also with our expansion,” he said.
To date, Mr. Lao said D&L’s export business comprises 25% of overall revenues.
He expects increased export sales as the company enters new markets in the Asia-Pacific region, such as China, Hong Kong, Japan, and Indonesia.
D&L booked a 15% increase in earnings in the July to September period to P771 million, as revenues likewise increased 27% to P7.2 billion for the three-month period.
This year, the company is tracking a 10% profit guidance boosted by robust growth across its food, oleochemicals, specialty plastics, and aerosols businesses.
Shares in D&L added 14 centavos or 1.33% to close at P10.68 each at the Philippine Stock Exchange on Thursday. — Arra B. Francia
