D&L Industries Targets 50% Export Revenue with New Batangas Plant

D&L Industries Inc., the Philippines' leading specialty food ingredients and oleochemicals producer, is ambitiously aiming to increase its export revenues to 50% of total revenue within the next two to three years. This goal is driven by the operational capabilities of its new manufacturing plant in Batangas province.

Currently, exports account for 32% of D&L's total revenue, a figure that has seen significant growth from previous years. The company expects this percentage to rise to the mid-to-high 30s by the end of 2024. The Batangas plant, which started commercial operations last year, has been crucial in this growth trajectory.

Why this matters: D&L Industries' goal to increase export revenues has significant implications for the Philippine economy, as it can lead to increased foreign exchange earnings and job creation. If successful, this could also pave the way for other Philippine companies to expand their global reach and contribute to the country's economic growth.

D&L President and CEO Alvin D. Lao expressed confidence in the company's future prospects, stating, "Over the longer term, we have a lot of confidence that the new investments that we have made over the past years will pave the way for higher and more sustainable profit growth." Lao also highlighted the importance of the Batangas plant in achieving their export revenue goals, saying, "With the help of our Batangas plant, we are on track to reach one of our BHAGs or Big Hairy Audacious Goals for exports to eventually account for at least 50 percent of our total sales."

The Batangas plant has not only bolstered D&L's production capacity but has also opened up new markets. In the first quarter of 2024, export revenues rose by 39% year-on-year, bringing the export contribution to total sales to nearly a record high of 32%. The plant's operations showed significant improvement, almost breaking even in the first quarter compared to a peak loss of P315 million in the third quarter of 2023.

D&L's subsidiaries, Natura Aeropack Corporation (NAC) and D&L Premium Foods Corp (DLPF), have also surpassed their first-year export commitments to the Philippine Economic Zone Authority (PEZA) by a combined 230%. This achievement highlights the company's robust export performance and its commitment to expanding its global footprint.

In addition to its export ambitions, D&L Industries has reaffirmed its commitment to shareholder returns. The company declared cash dividends amounting to P1.49 billion, consisting of a regular cash dividend of P0.161 per share and a special cash dividend of P0.048 per share. Shareholders of record as of June 19 are entitled to the dividend, with payment to be made within 30 days of the dividend declaration or on July 3.

D&L's first-quarter earnings rose by 4% year-on-year to P618 million, driven by the steady ramp-up in operations of the Batangas plant. Sales grew by 5% to P8.83 billion. The company's management remains optimistic about its outlook, forecasting at least double-digit earnings growth in 2024, fueled by recent investments.

Since its IPO in 2012, D&L has returned a total of P16.8 billion in cash to shareholders through dividends. This consistent return highlights the company's commitment to delivering value to its investors while pursuing ambitious growth targets.

With the new capabilities and capacity that the Batangas plant brings, D&L Industries is well-positioned to achieve its goal of having exports account for at least 50% of total revenues in the next couple of years. The company's strategic investments and operational improvements are set to pave the way for sustainable profit growth and expanded global reach.

Key Takeaways

• D&L Industries aims to increase export revenues to 50% of total revenue in 2-3 years.
• Exports currently account for 32% of total revenue, up from previous years.
• New Batangas plant has boosted production capacity and opened up new markets.
• D&L declared cash dividends of P1.49 billion, reaffirming commitment to shareholder returns.
• Company forecasts double-digit earnings growth in 2024, driven by recent investments.