Chemical manufacturer D and L Industries Inc. expects 2024 to remain a challenging year but optimistic the environment to be better, with more stable interest rates and raw material costs.
Company president and CEO Alvin D. Lao said because interest rates are at a higher level, “next year, even if the conditions are similar to where we are now, I don’t think interest rates will go up even more.”
He said raw material and labor costs may not go up as much next year compared to the hikes of the present year.
“This year, we were hit not just with the higher interest rates (but) were also hit by higher costs. A lot of raw material prices were moving up. And then there were a lot of increases in minimum wage, labor. And then for us, another factor was (expenses for the) new plant, equipment.
“Next year will still be challenging, but my assumptions are that (rates and costs are) going to be the same as this year,” Lao said.
According to him, one possible challenge next year has to do with the impact of the El Niño phenomenon on the cost of raw materials as coconut oil that the industry is closely monitoring.
He said its impact may be limited since DNL has existing agreements to pass on changes in the cost of raw materials to customers so that its prices move in tandem with commodity price changes.
DNL is also expecting more business activities in the next few months as production lines at its new Batangas plant complete and start production.
“A lot of our customers want to inspect the new plant. A lot of them want to come down physically to walk around in the loop to make sure everything is moving,” Lao said.
The new Batangas plant more than doubles the capacity of the company’s existing facilities combined.
“It’s really setting us up for growth not just the next year or two but for a much longer timeframe. It’s a good foundation for us to really add a lot more volume and business,” Lao said.
