Biodiesel revs up Chemrez revenues 29.5% to P3.55B

Publicly-listed Chemrez Technologies Inc. reported a 29.5 percent increase in consolidated revenues for the first nine months of 2008 to P3.55 billion, from P2.74 billion in the same period last year.

The company said the sales growth was realized despite higher raw material and energy costs which affected some markets.

Bulk of revenue growth was in the domestic market, primarily due to the sizable volume contributed by coco-biodiesel sales.

The growth in revenues was also due to the increase in sales volumes from the oleochemicals group and several resins product lines as the share of its “Green Chemistry” products in total revenues continues to grow.

“Green Chemistry” or environmentally-friendly chemicals are a combination products using renewable sources as raw materials and engineered products that are characterized by low toxicity and are environment friendly.

Chemrez estimates that by the end of the year, it may be supplying approximately 65 percent of the national requirement for coco-biodiesel, up from a 55 percent market share registered for the eight months in 2007 following the implementation of the Biofuels Act.

The company said it remains as the leading supplier of key ingredients for the soap and detergent industry in the Philippines, alongside its encouraging progress in expanding its export markets.

Sales volumes in the various resins product groups registered mixed results in the first nine months of 2008 relative to the unusually high across-the-board increases experienced in the same period in 2007.

While the firm benefited from the continued growth in certain downstream markets, its other industrial customers reduced their orders due to higher raw material and energy costs as well as shrinkage in their own end-user markets.

The general increase in costs of imported raw materials, whose prices are petroleum-linked, had a generally expected dampening effect on consumption even as the company managed its selling price adjustments to push sales without unduly affecting profitability and working capital turnover.

As raw material prices generally followed the price movement of crude oil, the company said prices have peaked in the third quarter, and will be much lower in the last quarter of the year resulting in improved profit margins for the last quarter.

However, the lower gross margin was compensated by better management of administrative and marketing overhead costs.

As a result, unaudited consolidated net income after tax for the first nine months of 2008 increased 1.6 percent to P359.4 million, from P353.7 million in the same period in 2007. – Donnabelle Gatdula