D&L’s coconut arm gets PEZA accreditation

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The coconut oil manufacturing arm of D&L Industries has obtained approval from the Philippine Economic Zone Authority (PEZA) to register as an export enterprise, thereby qualifying for an array of fiscal and non-fiscal incentives.

In a recent disclosure to the Philippine Stock Exchange, D&L said its unit Natura Aeropack Corp. (NAC) – which produces coconut oil fractions and coconut-based surfactants and downstream consumer products – had received authority from the PEZA to operate as an economic zone export enterprise.

The manufacturing facility will be located in First Industrial Township (FIT), a special economic zone in Batangas and will be commercially operational in 2021.

“The NAC facility is part of the expansion plans of the D&L Group, which will position the group to grow in the next 20 years,” the disclosure said.

NAC will be required to meet the 50 percent export sales requirement for Filipino enterprises.

Five years after its last expansion program, D&L is building new manufacturing facilities to set the stage for future growth. The proposed facilities will rise on a 26-hectare property in FIT. In line with D&L’s asset-light business model, the lot was acquired by the property company of the Lao family and it will be leased to the group.

NAC is 70-percent owned by Chemrez Technologies Inc. and 30-percent owned by Aero-Pack Industries Inc. Its consumer products are envisioned to be “sustainable, naturally-derived, mild and non-irritant.” This unit also expects to offer healthcare, personal care, home care as well as baby care product applications.

PEZA-registered agro-industrial enterprises are entitled to certain fiscal incentives, such as an income tax holiday for four years. Upon expiry of the income tax holiday, such as economic enterprise will have a 5-percent special tax on gross income and exemption from all national and local taxes. It will also enjoy tax and duty free importation of production equipment and machineries, breeding stocks, farm implements including spare parts and supplies of the equipment and machineries.

Apart from NAC, D&L is also seeking PEZA registration for another unit, D&L Premium Foods Corp., a wholly-owned subsidiary of Oleo-fats Inc. (OFI) which was incorporated primarily to cater to OFI’s growing export business.

D&L’s capacity-building program for NAC and Premium Foods is expected to generate about 700 new jobs.