D&L Industries set to export 50% of its products

D&L Industries, Inc. will target to export 50% of its products upon the rolling out of its First Industrial Township expansion next year in an economic zone in Batangas.

“We are hopeful that by the beginning of next year, the domestic economy will be in a much more stable position when things are really back to normal. And hopefully, other economies all over the world will also be back to normal and that should bode well for our export,” D&L Industries President and Chief Executive Officer Alvin D. Lao said in the Philippine Stock Exchange’s Star Investor Day on Wednesday.

The plant is located in an area under the Philippine Economic Zone Authority (PEZA), Mr. Lao said, adding that it means “we are required to export a minimum of 50% of what we make and that export target is something that we have been planning for quite a while.”

According to the Special Economic Zone Act of 1995, corporations registered with the PEZA to engage in manufacturing in the customs territory or in the non-restricted areas within the ecozone are required to export at least 50% of products produced in the area.

The Batangas expansion is expected to open at the beginning of next year after it has been delayed because of the pandemic.

In the first half, the company’s export contribution stood at 34% at P7.7 billion, a 69% growth versus last year, driven by its plants’ continued operations amid the pandemic and some market share grab.

“For our plants, we have been able to continue to operate even during [the pandemic] and even during the volatile period where raw materials’ prices were continually going up, we are able to lock in a lot of our raw material supplies and make sure that we would not get cut,” Mr. Lao said.

“We had a lot of customers who were having difficulties sourcing from their original [suppliers and] because we are able to continually access supply to our raw materials that meant we can continually service not just our existing customers but some new customers as well,” he added.

China, with its ongoing lockdowns, is expected to remain the biggest export market for D&L Industries next year.

“We’ve been able to maintain exports mostly within Asia-Pacific. We have some markets like China, which are currently experiencing a lot of lockdowns but we heard that there are some improvements announced,” Mr. Lao said.

He said there had been announcements of days of lockdowns being reduced and target dates for the return of face-to-face classes.

“There are some signs that lockdowns are going to end soon so going forward, China definitely will still be a big market for us,” Mr. Lao added.

On Wednesday, shares in D&L Industries rose by 20 centavos or 2.67% to P7.68 apiece. — Justine Irish D. Tabile