D&L to proceed with second biodiesel plant

LISTED food ingredients and oleochemicals producer D&L Industries, Inc. will proceed with its planned second biodiesel plant to increase capacity despite the recent suspension of the government-mandated blend increase.

“Even if the (blend) increase was postponed, it was not canceled. It will only be done at a later date. It would still make sense to proceed with more capacity for biodiesel,” D&L President and Chief Executive Officer Alvin D. Lao told reporters recently.

“It’s still in the planning stages. I would say it’s probably a matter of when, not if. There’s a high probability we will make a second plant. In terms of when, how big, or how much we’ll spend, we’re not there yet,” he added.

The Department of Energy issued an advisory last month announcing the suspension of the planned increase in the coco methyl ester (CME) component of biodiesel amid high coconut oil prices that could impact pump prices.

The increase to a 4% biodiesel blend was supposed to be implemented on Oct. 1, rising to 5% a year later.

Mr. Lao said that a second biodiesel plant “makes sense” for D&L moving forward.

D&L subsidiary Chemrez Technologies, Inc. operates a biodiesel plant in Quezon City with an annual capacity of 90 million liters.

“The fact that we made that announcement, it’s something we’re very serious about,” Mr. Lao said.

In March, D&L said it was evaluating the risks and returns of building a second biodiesel plant.

The company added that the decision depends on how the plant would align with its growth objectives and the goal of maximizing long-term shareholder value.

“D&L maintains a positive long-term outlook on the local biodiesel sector, recognizing the significant benefits that an increased biodiesel blend can offer to the economy, environment, and consumers,” it said.

In October last year, the CME blend in diesel was raised to 3% from 2%, in support of efforts to lower dependence on imported fuel, reduce greenhouse gas emissions, and support the biodiesel industry.

D&L shares were last traded on Aug. 20, unchanged at P5 apiece. — Revin Mikhael D. Ochave