D&L’s Batangas hub to start operations next year

Leading food and plastic input manufacturer D&L Industries has obtained clearance from the Philippine Economic Zone Authority (Peza) to delay to January 2023 the opening of its big new manufacturing hub in Batangas province.

The Batangas plant of D&L unit Natura Aeropack Corp. (NAC), which will manufacture coconut oleochemicals for various consumer care products, was originally slated to start commercial operations by May 2022.

But in consideration of the recent turn of events—such as the Omicron-related surge in COVID-19 cases early this year, global port congestion and supply chain disruptions, as well as longer-than-expected processing of registration and licenses—Peza granted an extension of start of commercial operations (SCO) to January 2023.

As such, NAC and D&L Premium Foods Corp (DLPF), another wholly-owned subsidiary of D&L located at this Batangas site, will now start commercial operations concurrently. DLPF will manufacture food ingredients to cater to the company’s growing export business.

“While the pandemic has posed challenges to the completion of our Batangas plant, this expansion is coming at an opportune time given the strong demand for high value coconut-based products in the export market. This is evidenced by the resilient and robust growth in our export sales which grew 55 percent year-on-year in the first nine months of 2021,” D&L president and CEO Alvin Lao said in a disclosure to the Philippine Stock Exchange on Friday.

“As the world moves beyond this pandemic, this plant will help us cater to emerging, relevant industries where we see opportunities for new growth. Our existing capacity is still sufficient to serve requirements in the near term. As such, the extension in the SCO should have no material impact on current operations,” Lao added.

D&L’s Batangas expansion sits on a 26-hectare property in First Industrial Township-Special Economic Zone in Batangas. The ongoing phase one expansion will occupy roughly half of the property.

The company has so far spent about P6.2 billion for the project. Remaining capital expenditure to be spent this year stands at about P1.8 billion.

Once completed, the new plant is seen to drive the group’s future growth, in line with plans to develop more high value-added coconut-based products and penetrate new international markets.

The hub will mainly cater to D&L’s growing export business in the food and oleochemicals segment, adding the capability to manufacture downstream packaging, thus allowing the company to capture a bigger part of the production chain.For instance, while the company primarily sells raw materials to customers in bulk, the new plants will allow it to “pack at source.”