CHEMICAL firm D and L Industries Inc. (DNL) started building the structures that would expand its manufacturing capacity in Batangas. At the same time, its parent company Jadel Holdings Co. Inc. has broken ground for a new research and development facility in Quezon City to explore new products beneficial for the listed company.
Company President Alvin D. Lao said they have yet to finalize the cost and timeline of the new manufacturing facilities to be built at the First Industrial Township in Batangas.
“Because of its size, we have not yet completed the plans. The bulk of this expansion should be operating by 2021,” Lao said adding the facility’s current capacity utilization rate is about 65 percent.
“This expansion can easily be financed by our cash flow and debt since we have a lot of room in our balance sheet to borrow,” he said.
On the other hand, Jadel Holdings, the holding company of the Lao family and the parent company of DNL, is planning to build the Jadel Research Center.
The said facility will house new research initiatives in areas that are outside DNL’s current fields of research, which currently are mostly for its clients and existing products.
Lao said the new research facility will be exploring new fields and ensuring DNL’s long-term growth by creating a new pipeline technologies and products.“We are very excited to embark on this strategic project. We recognize that R and D is at the core of our business and represents the biggest source of earnings growth and margin expansion,” he said. “This investment represents our family’s steadfast commitment to both R and D and innovation, allowing us to achieve sustainable growth in new and existing businesses and increase our relevance to customers.”
The new facility will be in an eight-story LEED-certified building in Quezon City and Jadel will shoulder 100 percent of the capital expenditures for the center. Start of operations is expected to be in 2021.
The unit is meant to be a research platform that will allow the Lao group to explore potential growth areas without DNL taking significant risks, the company said. The listed firm is positioned to benefit from JRC’s research initiatives in areas that may complement its existing business segments.
DNL has the option to be the licensee for customized products and technologies that are relevant and complementary to its existing business segments, while noncomplementary products and technologies may be licensed to other companies outside of the listed company.