Chemrez to invest P645M to expand manufacturing facilities
MANILA, Philippines—Chemrez Technologies Inc., the country’s top biodiesel, resins and oleochemicals producer, has earmarked $15 million, or roughly P645 million, to further expand the capacity of its manufacturing facilities.
At the sidelines of the stockholders’ meeting on Monday, Chemrez managing director Jun Lao explained that this investment would enable the company to install new equipment to increase production that would meet the projected increase in export demand over the next three years.
“We now have a capacity of 90,000 metric tons inclusive of oleochemicals and coco-methyl ester (CME). And we still have room to expand. Quite often what we do would be value-adding. We don’t need a new plant, but just new equipment. We just need to put up additional equipment,” Lao told reporters.
At the same time, Lao disclosed that the company targets to have its export sales account for about 50 percent of its total turnover, from the current 20 percent.
“Hopefully our export sales would constitute half of our total turnover and we’re hoping it would happen by 2014. The size of the local market is a little bit flat already. The manufacturing industry is not so much growing anymore. The Philippines is moving more and more into a trading and distribution market,” Lao said.
According to Lao, the heavy export thrust of Chemrez happened about four years ago.
“We recognized that our market size in the Philippines would not grow as much. And you can see a lot of our industries are moving overseas and even some are not surviving. We’re just following our clients abroad; when the likes of Procter and Gamble and Colgate-Palmolive moved to Thailand, we followed them also. At least, we are able to maintain our market even when they move overseas,” Lao explained.
Lao further said that the expansion of its export market would likely be in Japan and Thailand. The US, in particular, has been showing “a very good potential for dramatic growth… .It’s also in the US where we appointed large distributors,” Lao said.
“For US, when you look at the sophistication of their hair and body shampoo, they have a huge market for that. And their preference for using coconut-based ingredients is also big,” he noted.
