D&L Industries Inc. reported Wednesday a 28 percent fall in first half net income to P1.24 billion on account of a double-digit drop in sales and the expenses added by its new factory in Batangas that officially started commercial operations with the issuance of its first invoice in July.
D&L, which customizes, develops and manufactures food ingredients, colorants, additives, engineered polymers, aerosol products, oleochemicals, resins and powder coating, reported that first half sales dropped 27 percent year-on-year to P16.23 billion.
But D&L president and chief executive office Alvin Lao is confident financial results will start to improve in the coming quarters as the Batangas manufacturing facility “elevate(s) the company to operate on a whole new level” that will allow it to “see new markets, higher value added products, and deeper innovations that will further push out boundaries.”
Lao said, however, that the commercial operation of the Batangas plant “will mean incremental expenses that may affect near-term income” as has been the company’s experience the past 60 years.
“We have a lot of confidence that even though it may take time, this plant will be a huge benefit for the company,” he added.
The new factory will mainly cater to D&L’s growing export businesses in the food and oleochemicals segments. It will add the capability to manufacture downstream packaging, thus allowing the company to capture a bigger part of the production chain. D&L expects the new plant will help it realize its goal of putting the Philippines on the map as a quality manufacturing hub for sustainable, natural and organic products.
Lao said the company is gearing up towards launching a full range of shelf-ready products for its export customers, made from coconut oil, for the personal and baby care, cosmetics and beauty care, household cleaning, health and nutrition, and food and vegetable oils categories that are sustainable, natural, and organic. This initiative offers a plug-and-play solution for global brand owners who are looking to beef up their sustainable product offerings.
D&L targets export sales to account for at least 50 percent of total revenues in the long-term.
