D&L on track to hit profit growth target

Food ingredient and specialty plastic additive manufacturer D&L Industries is on track to grow its recurring net income by 30 to 34 percent this year, the company’s chief finance officer said.

This will result from the company’s continued focus on higher-margin customized and specialty products, which include specialty fats and oil, as well as plastic and aerosol products, and reducing the share of low-margin refined vegetable oil to total business.

In a briefing held by BPI Securities on Saturday, D&L chief finance officer Alvin Lao said the company was “growing very fast” and has built three new plants to add capacity. By the time these plants are finished, he said utilization would be very low at 40 percent, which means that in the next few years, there would not be much capital spending required for the company.

Given recent results, he said the 30-34 percent goal of boosting recurring income this year was achievable, he said.

The goal was to increase margins by at least 1-percentage point each year, Lao said, noting this had been achieved in the last three years.

D&L, which has about 1,500 workers, is also heavy in research in development as the company has a 50-year heritage of innovation started by the first-generation founders, Lao said. “We’re coming out with more new products,” he said.

The company, which is being pitched as an indirect consumer play in the country, has 650 customers in the food business, including the biggest players in the industry. Doris C. Dumlao