Chemrez chief operating officer Dean Lao Jr. said Congress is set to hold a bicameral meeting this month, hopefully to approve the biofuel bill that would require all liquid fuels for motors and engines sold in the Philippines to contain locally sourced components.
Immediately upon effectivity of the proposed law, "a minimum of one-percent biodiesel by volume shall be blended into all diesel engine fuels sold in the country subject to domestic supply and availability of locally sourced biodiesel component; and up to a two-percent blend two years after the law’s implementation."
The bill was crafted to reduce the country’s dependence on imported fuel, the price of which has been volatile in the world market; and also sought to protect health and environment.
"There are no technical issues on biodiesel although there are forces that want a postponement of the approval of the law. But it is one of the priority measures being pushed by Malacañang," Lao said.
Lao pointed out though that while the company’s BioActiv brand of bio diesel will still be a strong revenue driver, half of total sales will come from its powder coating, resins and specialty chemical manufacturing units, which are all leaders in the domestic market.
Chemrez chief financial officer Francis Caluag said the company can also push its exports’ pending approval of the proposed measure.
The company exports BioActiv to rapidly expanding export markets such as Europe and Japan, which are seeking alternatives to petrodiesel but have limited capacity to produce crops for the manufacture of biodiesel.
The domestic demand for cocobiodiesel is estimated at 70 million liters a year based on the seven billion liters of petrodiesel consumed by the country last year. The figure is seen to more than double to 160 million liters once the biofuel bill is enacted into law.
Aside from biofuel, Chemrez also produces Acrylite binders, the main ingredient used to make water-based house paints.
Lao said Acrylite, an elastomeric binder that makes paint elastic to avoid cracking, holds a substantial 40-percent share of the local market where it competes with local and foreign companies.
The company, he said, also exports to the Southeast Asian region and Australia, where it competes with multinational chemical companies.
He added that Chemrez is also the dominant supplier to the local market for unsaturated polyester resins — the main material used for fiberglass applications. The latest innovation is a resin that allows the use of water as thinner instead of solvents. The Polycol brand is widely recognized in local industries and is used in furniture, crafts and boat-building.
Chemrez also controls 70 percent of the domestic market for polystyrene resins which is a major raw material for the manufacture of plastic food packaging and appliances. Its brands Hi-Flo and Hi-Flex are highly regarded for quality and reliability in the plastics industry.
In oleo-chemicals, or vegetable oil-derived chemicals, its brand Fil-Amide holds a 60-percent market share for coco-based amides. This is the lathering or foaming agent used by consumer products companies to make shampoo and detergents. The company also exports most of its output.
Lao said Chemrez is engaged in continuous research and development to increase its product range and markets by developing new applications for its resins, polymer dispersions, oleochemicals and other products.
Chremrez plans to raise P1.5 billion from the sale of additional shares to wipe out debt as well as to raise working capital. A total of 340.91 million shares, representing 24.4 percent of the firm’s outstanding capital stock, are being sold to the public at P4.40 per share.
The offering started yesterday to end on Friday. Tapped as lead underwriter for the issue is Asian Alliance Investment Corp. The listing of shares, on the other hand, has been set on Dec. 4.