Customized food ingredients manufacturer D&L Industries Inc. is projecting a stronger financial performance in 2025 as it rebounds from the economic challenges that weighed down its earnings last year. Its president, Alvin D. Lao, expressed increased optimism for the company’s prospects, citing a combination of easing inflation, reduced interest rates, and higher consumer spending driven by mid-term elections.
In contrast to 2024, which was marked by sky-high consumer prices, Lao highlighted the beneficial economic “tailwinds” at play this year. “As long as the economy is doing well, we are a beneficiary,” he said, noting that the recovery of the tourism sector and anticipated growth in the hospitality industry also contribute to the positive outlook.
For D&L, the year-long inflationary pressures, particularly soaring rice prices, led to a slowdown in consumer spending, negatively affecting profitability. Lao pointed to the decline in rice prices in recent months as a clear signal that inflation is subsiding. This development, he added, creates more disposable income for consumers and lays the groundwork for economic improvement.
“The peak of rice prices happened several months ago, and it’s been coming down since. This is a good sign,” Lao explained, reinforcing that the company’s prospects have brightened as inflation levels ease.
The impact of mid-term elections on consumer spending is also being felt, with Lao noting that increased election-related expenditures historically stimulate economic activity. “Even in non-presidential election years, we see an uptick in consumer spending,” he said.
Further bolstering D&L’s optimism is a recovery in the tourism sector. Lao said crowded malls and hotels in December are early indicators of a rebound in one of the most pandemic-impacted industries. The Department of Tourism expects international tourist arrivals to return to pre-pandemic levels in 2025, offering another avenue of growth.
On the biodiesel front, D&L’s biodiesel business is seeing strong demand, aided by an increase in the mandated biodiesel blend. With the Philippine government raising the required blend from 2 percent to 3 percent in October, the company has ramped up production capacity, now operating at 60 percent compared to the previous 40 percent. Lao indicated that D&L may exceed this threshold, as other suppliers have struggled to meet demand.
Looking ahead, the company anticipates a further increase in the biodiesel blend to 4 percent by October 2025, which Lao believes will drive increased orders in the third quarter.
With these tailwinds aligning, D&L Industries is positioned for a promising year, reversing the impact of last year’s price pressures and looking forward to a more stable and prosperous economic environment.
