D&L Industries Inc., a listed investment holding company, sees significant opportunities for growth amid an evolving global trade marked by shifting tariff and trade tensions, particularly for companies that can adapt quickly to these changes.
D&L president and chief executive officer Alvin Lao acknowledged the challenges, noting that in 2019, the trade war and cautious global sentiment caused a 25 percent year-on-year decline in export sales. However, he expressed optimism, emphasizing that with restructuring efforts in global supply chains, the company expects a less severe impact from potential future tariffs.
“In 2019, the trade war and the generally cautious sentiment globally had an impact on our exports, down 25 percent YoY that year,” Lao said. “Since then, many companies globally have begun restructuring their supply chains to navigate around possible future tariffs. With these adjustments, we anticipate a lesser impact on our export business this time around compared to 2019.”
D&L’s strategic pricing structure, combined with its strong R&D capabilities, allows the company to maintain flexibility in adjusting selling prices in response to fluctuations in foreign exchange rates and commodity prices. Lao pointed out that this adaptability has been key in mitigating the impact of volatility on the company’s operations.
The listed firm owns companies with interests in the customization, development and manufacturing of food ingredients, colorants, additives, engineered polymers, aerosol products, oleochemicals, resins and powder coating. It also provides management and administrative services to subsidiaries and affiliate companies.
The trade tensions between the US and China, Lao suggested, present an opportunity for companies like D&L that can supply products to customers unable to source from these two countries. The company’s new plant in Batangas enhances its production capacity, positioning it to capture a larger share of the export market.
D&L’s export sales, which make up approximately 31 percent of total sales, are focused on high-value, customized products, often leveraging the Philippines’ natural resources. Notably, the company’s coconut-based products have gained traction internationally, especially due to their sustainability appeal.
In the first nine months of 2024, D&L’s export sales grew by 38 percent year-over-year, driven by increased demand for sustainable coconut products. The company remains focused on an aggressive export strategy and is on track to meet its medium-term goal of achieving 50 percent export sales contribution to total revenue.
