DNL units to build plants to grow export business

TWO units of chemical firm D & L Industries Inc. (DNL) submitted applications with the Philippine Economic Zone Authority (Peza) for the registration of new manufacturing facilities.

DNL said D&L Premium Foods Corp. and Natura Aeropack Corp. submitted the applications to the Peza to build their respective plants in a Peza zone in Batangas. 

D&L Premium is a wholly owned subsidiary of Oleo-fats Inc. (OFI), incorporated to cater primarily to OFI’s growing export business. Natura Aeropack Corp. is 70-percent owned by Chemrez Technologies Inc. and 30-percent owned by Aero-Pack Industries Inc. All these firms are wholly owned units of DNL.

Natura’s facilities will be dedicated for the manufacture of coconut oil fractions, coconut-based surfactants, and downstream consumer products which are sustainable, naturally derived, mild and nonirritant. Product applications extend to health care, personal care, home care and baby care.

DNL President and CEO Alvin Lao said the facilities will be completed in three years, or about the same time the company’s current facilities in Libis, Quezon City, reach its full capacity. 

Lao said the Quezon City plant is about 70 percent to 75 percent of its full capacity. He added it can deploy additional plant lines and can produce more for export, just in time for the completion of the Peza-zone facilities. 

“Products that we will manufacture in the new plant will be [made] available in the market but some of it [would be] not,” Lao said. “It will still be B2B [business to business].” 

He added the Peza allows DNL to sell half of its production locally and the remaining half for export.

DNL’s new Peza facilities will more than double the current capacity, Lao said.

“Our debt is quite low so it means we have room to borrow. So the facilities will be funded by [a combination of] debt and internally generated funds,” he said.

The facilities will sit on a 26-hectare property within the First Industrial Township-Special Economic Zone in Batangas. 

In continuation of DNL’s asset-light model, the lot was acquired by the Lao family’s property firm and leased to DNL, the company said.

The project is expected to generate about 700 new jobs, with construction and commissioning to be completed in 2021. The current operations in Metro Manila should experience no significant disruption, according to DNL. 

The planned expansion will position DNL to grow over the next 20 years, the company said. The last major capacity build took place prior to DNL’s initial public offering in 2012. 

“This initiative is part of the group’s strategic direction to grow the export business and focus on higher-value and higher-margin products,” the company said. “Once registered with the Peza, D&L Premium Foods and Natura Aeropack will be required to meet the 50-percent export sales requirement for Filipino enterprises.”