D&L Industries eyes second biodiesel plant

LISTED specialty food ingredients and oleochemicals manufacturer D&L Industries, Inc. is considering building a second biodiesel plant to meet rising demand following the government’s biodiesel blend expansion.

“D&L is currently in the final stages of evaluating the risks and returns of building a new biodiesel plant, with the decision largely contingent on how well it aligns with the company’s strategic growth objectives and the goal of maximizing long-term shareholder value,” the company said in an e-mail statement over the weekend. 

D&L’s subsidiary, Chemrez Technologies, Inc., operates a biodiesel plant in Quezon City. It is the largest biodiesel manufacturer in the Philippines, with an annual capacity of 90 million liters.

Since Oct. 1 last year, all diesel fuel sold in the country has been required to contain 3% biodiesel or coco methyl ester, following a government mandate to boost the coconut industry. The blend will increase to 4% by Oct. 1 this year and to 5% by Oct. 1 next year.

“The positive regulatory developments, coupled with a greater recognition of the economic and environmental benefits of a higher biodiesel blend, present an opportune time to invest and capitalize on the industry’s potential. D&L sees this as a critical juncture in reinforcing and expanding its leadership in the industry,” the company said.

“D&L maintains a positive long-term outlook on the local biodiesel sector, recognizing the significant benefits that an increased biodiesel blend can offer to the economy, environment, and consumers,” it added. 

The company is now considering a second biodiesel plant since its P10-billion manufacturing facility in Batangas has been completed and it has no other major capital expenditures (capex) in the pipeline.

“D&L has the financial flexibility to potentially undertake the construction of a new biodiesel facility, which would require much smaller capex compared to the amount spent on the Batangas plant,” it said.

Meanwhile, D&L said further investments in biodiesel production would help reduce carbon emissions, support the local coconut industry, and lessen dependence on imported fuels. 

“With at least 20% of the Philippine population directly or indirectly benefiting from the coconut industry, the potential for economic value creation in the form of additional investments and jobs in both the agriculture and manufacturing sectors is significant,” D&L said.

D&L is allocating around P1 billion for capex this year. In 2024, the company’s net income rose by 2% to P2.3 billion, despite higher operating and interest expenses from the Batangas plant.

D&L shares were last traded on March 21 at P5.39 per share. — Revin Mikhael D. Ochave