D&L to defer commercial operations of Batangas plants

MANILA, Philippines — D&L Industries, the listed chemicals and food ingredients manufacturer, will move the commercial operations of its Batangas plants to May 2022 and January 2023.

The original target was to commence operations as early as October 2021.

The company is building two new plants. One will be for food ingredients under D&L Premium Foods Corp. and an integrated facility to manufacture oleochemicals and downstream packaging under Natura Aeropack Corp. (NAC).

NAC will be the first plant to operate within D&L’s Batangas facility in May 2022.

D&L Premium Foods Corp., which will manufacture various food ingredients to cater to the company’s growing export business, will start commercial operations in January 2023 due to COVID-19-related delays.

The Philippine Economic Zone Authority (PEZA) agreed to the extension.

D&L president and CEO Alvin Lao said that while the COVID-19 pandemic and various mobility restrictions have caused challenges in the completion of the Batangas plant, the company remains committed to the project and that the delays would have no material impact on current operations.

“We see ever-growing opportunities in relevant industries in the new normal that we can tap into with this new plant. This is evidenced by the resilient and robust growth in our export sales which grew 84 percent year-on-year in the first quarter of the year. Our existing capacity is still sufficient to serve requirements in the near term, as such the extension in the SCO (start of commercial operations) should have no material impact on current operations,” Lao said.

D&L’s Batangas expansion plant sits on a 26-hectare property in the First Industrial Township - Special Economic Zone in Batangas.

Once completed, the new plant will be instrumental to the company’s future growth, in line with plans to develop more high value-added coconut-based products and penetrate new international markets. It will mainly cater to D&L’s growing export business in the food and oleochemicals segment.

The plant will add the capability to manufacture downstream packaging, thus allowing the company to capture a bigger part of the production chain. For instance, while the company primarily sells raw materials to customers in bulk, the new plants will allow it to “pack at source”.

This means that D&L will have the ability to process the raw materials and package them closer to finished consumer-facing products. This will enable D&L to move a step closer to its customers by providing customized solutions and simplifying their supply chain, which is of high importance given global logistical challenges and concerns.

The company has so far spent about P4.5 billion for the project, with the remaining capex to be spent this year and in 2022 at about P3.5 billion.