D&L sees lift from food products demand

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SINGAPORE—Publicly-listed D&L Industries Inc., the country’s leading specialty and commodity food ingredients provider, expects to grow profits by nearly a fifth this year as profit margins continue to improve on the back of sales of higher-value products.

D&L vice president and chief financial officer Alvin Lao said profits would rise between 15 and 19 percent this year, slower than last year’s 41-percent expansion. D&L has not yet released its full-year 2013 earnings report.

“It’s fairly conservative,” said Lao, speaking at the sidelines of Maybank Kim Eng’s Invest Asean forum this week in Singapore. “We don’t want to overpromise. At the start of the year, many of our customers said they were expecting a slowdown in their businesses, but we’re not seeing that.”

Lao said the country’s domestic demand-driven growth should continue to drive demand for D&L products that are used in finished goods sold to consumers.

For instance, Lao said the company initially expected sales in its low-margin commodities business to be either down or flat at best. “It’s actually growing a lot,” he said.

“Food is one part that we’re constantly surprised to grow faster than anticipated. We have so many factors going for us in the Philippines,” Lao said. “We have a young average age, our population growth among the fastest in the region and our GDP growth is high.”

He said the government’s crackdown on smuggling has also helped support sales of D&L commodities products.

Lao said sales of D&L’s higher-margin specialty fats and oil products have also improved due to strong demand from consumers.—Paolo G. Montecillo