D&L Industries Inc. (DNL), through its subsidiary Chemrez Technologies Inc., is assessing the construction of a second biodiesel plant to align with government plans to raise the biodiesel blend from 3 percent to 4 percent by 1 October this year. This develops as the company concludes its Batangas plant project and has no significant capital expenditures in the pipeline, offering it the financial flexibility to pursue the new facility with a smaller capex.
The company acknowledges risks but emphasizes the essential nature of biodiesel and favorable regulatory support, ensuring growing demand despite economic ebb and flow. DNL is in the final stages of assessing the project’s risks and returns, with a decision hinged on its alignment with long-term growth objectives and shareholder value.
Any expansion requiring significant investment will need shareholder approval. The upcoming increase to a 5 percent blend by October 2026 presents an opportune moment for DNL to solidify its leadership in the industry. Chemrez, which pioneered Asia’s first continuous coconut biodiesel plant in 2006, is the largest biodiesel producer in the Philippines, with 30 percent market share.
The company’s push to invest in biodiesel is bolstered by environmental and economic benefits, such as a 78 percent reduction in emissions compared to petroleum diesel and a projected 10 percent mileage improvement from a higher blend, which offers consumer savings.
