DNL eyes more partnerships with global food manufacturers

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D&L Industries, Inc. (DNL) targets to seal more partnerships with global food manufacturing companies, similar to its existing one with United States-based food manufacturer Ventura Foods, in a bid to further grow its exports business.

“We are seeing a lot more multinational, big global food manufacturing companies who are interested to expand their reach not just in the Philippines but also in Asia,” DNL President and Chief Executive Officer Alvin D. Lao told reporters on the sidelines of the company’s annual shareholders’ meeting in Mandaluyong City.

“One of the things we are able to do for these large companies is we can represent them. It can be a simple distribution agreement or even manufacturing agreement… These are examples of other large customers that we want to work with,” he added.

The listed plastics and aerosols manufacturer sealed its supply deal with Ventura Foods in 2014, allowing it to develop and produce specialty oils and specialty ingredients for the US company in the Asia-Pacific region.

DNL has since benefited from its partnership with Ventura, with its food ingredients segment now the largest contributor to exports at 45% of total export sales by the end of 2017, versus 19% the year before.

Mr. Lao said the company is currently in talks with various clients for potential deals, saying he “wouldn’t be surprised” if such an agreement is signed within the next couple of months.

DNL is ramping up its export business, aiming to grow the segment to 50% of its total revenues in seven years.

At the end of the first quarter of 2018, sales from exports accounted for 22% of DNL’s revenues, given its presence in China, Hong Kong, Japan, and Indonesia.

To support this growth target, the company is now in the planning stages for a new facility at the First Industrial Township-Special Economic Zone in Batangas. The facility covering a total of 26 hectares is located inside the Philippine Economic Zone Authority’s special economic zone, which means the firm has to allot half of its products for export.

The Batangas facility will be used for its chemicals, Chemrez, food ingredients, and aerosol products, as the plastics business already has large operations in its Quezon City plant.

Meanwhile, DNL also declared on Monday cash dividends amounting to P1.86 billion, or 64% of 2017’s recurring income. This translates to a 26-centavo dividend per share, or a dividend yield of 2.4% based on the stock’s closing price of P10.94 last June.

Since its listing at the PSE in 2012, DNL said it has returned a total of P6.75 billion in cash to its shareholders.

DNL realized a 12.3% increase in earnings to P744 million during the first three months of 2018, amid a 2% growth in revenues to P6.4 billion.

Shares in DNL went down eight centavos or 0.73% to close at P10.86 each at the stock exchange on Monday. — Arra B. Francia