STIFFER competition among local and foreign biodiesel and oleochemical manufacturers has pushed Chemrez Technologies Inc.’s net income to drop by 6.2 percent to P364 million in the third quarter of the year from P388 million in the same period last year. 

In a disclosure to the Philippine Stock Exchange, Chemrez said consolidated sales dipped 11 percent to P4 billion from P4.5 billion in the first nine months of 2010 due to lower oleochemical and resin sales as a result of stiffer competition.

Chemrez said oleochemical sales, including biodiesel, dropped by 12 percent to P2.3 billion from P2.6 billion in the third quarter of 2010 due to the tight competition in the biodiesel market.

Resin sales also decreased by 10 percent to P1.5 billion from P1.7 billion due to the entry of more imported resins.

Chemrez said it has maintained its dominance in its businesses despite stiffer competition posed by local producers and imported products. Powder coating sales increased by 12 percent to P220 million from P198 million as a result of price increases.

“Overall, the company believes that it has been able to maintain a good market share in the industries it is in. About 57 percent of revenues are from oleochemicals, 38 percent from resins, and 5 percent from powder coating,” Chemrez officials said. 

The company added that cost of goods sold dropped 11 percent to P3.5 billion in the first nine months of 2011 from P3.9 billion in the same period last year as result of lower sales volume this year.

Gross profit reached P532 million, 9-percent lower than the P583 million last 2010. The lower percentage decrease of 9 percent versus the 11 percent sales decrease is due to material positioning strategy of Chemrez.

This resulted in higher gross profit margin this year, 13.2 percent versus 12.9 percent posted in 2010. (Paul Anthony A. Isla)