By VG Cabuag
CHEMICAL firm D&L Industries Inc. said it expects its export business to bounce back and may grow by at least 20 percent this year after the Manila port congestion has been resolved.
D&L EVP and CFO Alvin Lao said exports currently account for 17 percent of D&L’s total revenues. Its export business has been growing, parallel to the growth of its local businesses.
Exports have already been growing at an annual rate of 20 percent over the last five years, but it hit a snag last year because of the Manila port congestion, which resulted in shipment delays.
Now that overall logistics conditions have improved relative to last year, Lao said D&L is also optimistic it will resume its positive-growth trend in the very near future.
“Growth this year should be much faster, considering we are coming from a low base [in 2015],” Lao told reporters.
D&L’s exports currently consist of specialty food ingredients, specialty plastics, including plastics for automotive wire harnesses, as well as oleochemicals or chemicals using vegetable oil as its main ingredient.
Among the firm’s highest-growing export is the medium-chain triglyceride derived from coconut oil, or coco MCT, produced by its unit Chemrez Technologies Inc.
The product is fast gaining recognition as a health and wellness product and a brain food used to help treat Alzheimer’s disease.
D&L’s products are mainly exported in the Asean region although some of its products, such as coco MCT and biodegradable plastics ingredients, are also shipped to Europe and the Americas.
Lao said Chemrez is exploring new avenues for the growth of its specialty oleochemicals business in line with trends in sustainability and health and wellness.
In particular, it is leveraging product development to capture more value in exports through niche coconut-oil applications. These are expected to spur growth going forward.
In the longer term, Lao said the focus will be on increasing collaboration with global players in various industries, which today include wire harness and biopolymers, to develop a stronger pipeline of higher margin, and higher growth opportunities.