D&L INDUSTRIES, Inc., a listed producer of specialty food ingredients and oleochemicals, is reducing its capital expenditure (capex) budget for 2025 as it focuses on minor expansions at its Batangas plant, its president said.
“We are still making minor expansions, not as big as what we’ve done in the past couple of years, but on a much smaller scale. So there will still be some capex, but the expectation is for it to be lower than what we did last year,” D&L President and Chief Executive Officer Alvin D. Lao said during a briefing on Friday.
“So roughly around the P1-billion mark, or maybe even less,” he added.
The latest capex budget is lower than the P1.16 billion allocated in 2024.
D&L expects a higher contribution from the Batangas plant to its bottom line as utilization increases and operational efficiencies are realized.
The company commenced commercial operations at the plant in 2023, allowing it to push for high-value-added, coconut oil-derived ingredients and finished products for the food, personal hygiene, and home care segments in the export market.
“We believe that we have only just begun to tap into the plant’s potential given the vast opportunities we see in both local and international markets,” Mr. Lao said.
In 2024, the company’s net income rose by 2% to P2.3 billion, despite higher operating and interest expenses incurred with the Batangas plant.
The continued ramp-up in operations helped offset the incremental expenses, allowing the plant to record its first full-year profit of P244 million.
Meanwhile, D&L expects export revenues to continue growing after both sales and gross profits increased during the period. Exports accounted for 30% of the company’s revenues in 2024.
Amid renewed tariff announcements from former US President Donald J. Trump, Mr. Lao said the company is not concerned, as “the US is a very small part of our export business. There’s a lot of demand for our products, not just from the US.”
Instead, the company sees arbitrage opportunities arising from potential tariffs, as changes in trade policies create short-term price differences across markets.
“In our view, the apparent trade tensions between the US and China present opportunities for companies like us to supply businesses that cannot source from either the US or China,” Mr. Lao said.
“Our new plant in Batangas gives us the capacity and capability to cater to bigger export customers. This puts us in a prime position to capture opportunities arising from the evolving international trade environment,” he added.
Established in 1963, D&L specializes in product customization and manufacturing for the food, chemicals, plastics, and consumer products original design manufacturer industries. Its core business activities include producing customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care applications. — Sheldeen Joy Talavera
