November 28, 2018 – D&L Industries has started the construction of its expansion facility which sits on a 26-ha property in First Industrial Township – Special Economic Zone in Tanauan, Batangas. The company is building two new plants – one for food ingredients (under D&L Premium Foods Corp.) and an integrated facility to manufacture oleochemicals and downstream packaging (under Natura Aeropack Corporation).
D&L Premium Foods Corp. is a wholly-owned subsidiary of Oleo-fats, Inc. (OFI), incorporated to cater to the growing export business for food.
Meanwhile, Natura Aeropack Corporation is 70% owned by Chemrez Technologies, Inc. (CTI) and 30% owned by Aero-Pack Industries, Inc. (API). Natura’s facilities will be dedicated for the manufacture of coconut oil fractions, coconut-based surfactants, and downstream packaging for consumer products which are sustainable, naturally-derived, mild and non-irritant. Product applications extend to health care, personal care, home care as well as baby care.
OFI, CTI, and API are wholly-owned subsidiaries of D&L Industries.
The first phase of the construction is currently underway, which involves building storage tanks. More than 50 tanks (which can be as large as 2,000 cubic meters) will be built for the two plants. D&L estimates a capex of Php8 billion for this expansion project, covering the construction of the plant-specific buildings, machineries, and equipment.
The company plans to finance the project through a combination of debt (70%) and internally generated cash (30%). Borrowing will take place gradually over the next two years as the need for funding arises for the construction. The company currently has low levels of debt, with net gearing coming in at just 8% as of the end of the third quarter this year.
In continuation of D&L’s asset light model, the property company of the Lao family will finance and own the land and site infrastructure, including buildings for generic purposes. In turn, these will be leased to D&L at an arm’s length basis.
Aside from the planned facilities, there are no other major capital expenditures planned for the next few years. This initiative will position D&L Group for the next 20 years of growth, as part of the group’s strategic direction to grow its exports while focusing on higher value and higher margin products. The project is expected to generate about 700 new jobs, with construction and commissioning to be completed by 2021. During this time, the company’s current operations in Metro Manila will not experience any significant disruption.
D&L Industries is a Filipino company engaged in product customization and specialization for the food, chemicals, plastics, and aerosol industries. The company’s principal business activities include manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use. Established in 1963, D&L has the largest market share in each of the industries it serves, as well as longstanding customer relationships with the Philippines’ leading consumer and chemical companies. It was listed on the Philippine Stock Exchange in December 2012. For more information, please visit www.dnl.com.ph.