D&L Industries continues to express confidence in the long-term potential of the Philippine biodiesel sector, recognizing the substantial advantages that an increased biodiesel blend can offer to the economy, the environment, and consumers. The company’s outlook is grounded in a broader vision of how expanding the biodiesel industry can drive positive change across multiple sectors.
Economic Growth and Job Creation
The biodiesel industry presents numerous opportunities to stimulate economic growth. With the coconut industry playing a crucial role in the livelihoods of at least 20% of the Philippine population, the shift toward biodiesel offers substantial potential for value creation. By fostering the development of the sector, the country stands to benefit from increased investments and job opportunities, particularly in agriculture and manufacturing.
Reducing Dependence on Imported Fuel
A key advantage of biodiesel is its contribution to reducing the Philippines’ reliance on imported fossil fuels. Increased use of indigenous fuel supports energy self-sufficiency, lessening the vulnerability of the nation’s economy to global oil price fluctuations. This shift not only strengthens energy security but also helps stabilize the country’s foreign exchange reserves, fostering a more predictable and resilient economic environment.
Environmental Sustainability
From a sustainability perspective, coco-biodiesel offers a significant opportunity to cut carbon emissions. According to a study by the University of the Philippines Los Baños, coco-biodiesel emits 78% fewer greenhouse gases than petroleum diesel. Additionally, an increase in the biodiesel blend from B2 to B5 is projected to improve fuel efficiency by approximately 10%, translating directly into consumer savings and a reduction in overall carbon emissions.
Strategic Alignment with D&L’s Growth Initiatives
The favorable regulatory developments and the growing recognition of biodiesel’s economic and environmental benefits position D&L to expand its leadership in this sector. With the successful completion of its Batangas plant and no significant capital expenditures planned in the near term, D&L has the financial flexibility to explore the construction of a new biodiesel facility. This would require a much smaller capital outlay compared to the Batangas facility, making it an attractive investment opportunity.
While the company is mindful of potential risks, it remains confident in the essential nature of biodiesel and the positive regulatory environment, which together create consistent and growing demand. This reduces the risks associated with economic volatility.
D&L is currently in the final stages of assessing the risks and returns of building a new biodiesel plant, with the decision depending largely on alignment with the company’s long-term strategic growth objectives and the goal of enhancing shareholder value. Any significant capital expenditure related to this expansion would also require shareholder approval.
D&L Industries is a leading Filipino company specializing in customized product solutions for the food, chemicals, plastics, and consumer products sectors. Established in 1963, the company manufactures a diverse range of products, including customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use.
D&L holds a dominant market share in most of the industries it serves and has built long-term relationships with the Philippines’ top consumer and manufacturing companies.
