Chemrez income jumps 4-fold to P195.2M in first semester

Chemrez Technologies Inc., the country’s leading producer of coco-biodiesel, resins, powder coatings and oleochemicals, said its net income jumped to P195.2 million in the first half of the year, nearly four times the P49.36 million profit recorded in the same period in 2006, on the back of higher revenues.

In an unaudited financial report filed with securities regulators, ChemrezTech said the first half net profit represents an increase of 144 percent over recurring earnings for the whole of 2006. Consolidated revenues grew 47.5 percent to P1.62 billion.

“ChemrezTech’s revenue performance reflected the continuing upswing in the Philippine economy as most of its market-leading traditional products continued to register better than expected volume growth for the first six months,” said ChemrezTech chief financial officer Francis Caluag.

Growth in non-biodiesel sales volumes ranged from nine percent to 74 percent across various product groups on the strength of sustained deliveries to downstream industrial customers who cater to the domestic food service, consumer appliance, home furnishings, construction and consumer care sectors.

Caluag said ChemrezTech’s gross margins continued to benefit from the rise of the peso as it held the line on the cost of imported raw materials and allowed it to moderate selling price adjustments.

Revenues from the wholesale biodiesel market accounted for less than 25 percent of consolidated revenues for the period. Bulk biodiesel deliveries to oil company customers commenced only in late April which is close to the official date of implementation of the one percent mandated blend under the Biofuels Act.

“Initial marketing efforts were highly encouraging as ChemrezTech gained significant market share among the initial batch of biodiesel producers that the petroleum industry began trying out in the second quarter of the year,” Caluag said.

Caluag said the initial short-term supply arrangements are expected to eventually progress to longer term offtake contracts as the customer base gains more familiarity with all supplier participants.

ChemrezTech expects to gradually improve its market share position given its experience in product quality, logistics and its superior manufacturing process.

The company is the only IMS-certified biodiesel producer in the country. Its BioActiv BD-100 brand of fuel-grade coconut methyl ester has been extensively tested internationally and is recognized to meet or exceed internationally-recognized biodiesel standards.

ChemrezTech also expects to commercially launch its fractionated methyl ester product line by the fourth quarter as an independent supplier in the export market. Fractionated methyl esters are non-fuel but higher value products derived from raw biodiesel which have various industrial applications.

The commissioning timetable for the fractionation component of ChemrezTech’s $16 million plant (which currently operates at near full capacity producing biodiesel) has been moved up several months ahead this year in order to take advantage of rising demand for environmentally-friendly specialty oleochemicals (vegetable oil-based chemicals).