D&L mulling over a second biodiesel plant

The chemical manufacturing unit of D&L Industries Inc. is looking at building a second biodiesel plant months before the implementation of a government directive mandating a higher blend, saying that they had room for additional spending.

In a statement over the weekend, D&L said it was in the “final stages of evaluating the risks and returns of building a new biodiesel plant” under Chemrez Technologies Inc., its wholly owned subsidiary.

The assessment includes identifying an ideal location for the facility, according to D&L.

The firm noted that the decision was dependent on how building a second facility “aligns with the company’s strategic growth objectives and the goal of maximizing long-term shareholder value.”

This comes ahead of a government mandate to oil firms to further increase the coco methyl ester blend in all diesel fuel sold across the country from 3 percent to 4 percent by October this year.

Further, under the Department of Energy Circular No. 2024-05-0014, the mandated ratio will increase to 5 percent by October 2026. This is seen to help in lowering the amount of imported petrochemical fuel used in diesel, and instead use more sustainable resources.

D&L currently operates a biodiesel plant in Quezon City that has a capacity of producing 90 million liters of supply per year.

In pursuing a second biodiesel plant, D&L said they now had more leeway to spend money after its P10.5-billion Batangas plant turned profitable earlier than expected.

“With the Batangas plant now completed and no other major capital expenditures in the pipeline, D&L has the financial flexibility to potentially undertake the construction of a new biodiesel facility,” the Lao family-led company said.

The Batangas factory churns out other coconut oil-derived goods such as personal and baby care, cosmetics and household cleaning products.

The company added that the prospective second biodiesel facility would require a “much smaller capex” than that of the Batangas plant.

D&L’s net income reached P2.34 billion, up by 2 percent, as sales rose by a fifth to P40.68 billion.

This was largely attributed to the Batangas facility, which registered a P244-million net income after incurring losses in the first nine months of 2024.

This is ahead of D&L’s target of making the facility profitable by 2025.

The company currently produces coconut oil-derived ingredients and finished products for food, personal hygiene and home care segments in the 26-hectare facility, which started operations in July 2023. —Meg J. Adonis INQ