LISTED specialty food ingredients and oleochemicals manufacturer D&L Industries, Inc. is considering the construction of a second biodiesel plant to address the increasing demand fueled by the government's biodiesel blend expansion. The company is currently in the final stages of assessing the risks and potential returns of such an investment, with a decision hinging on its alignment with long-term strategic growth objectives and shareholder value maximization, as per BusinessWorld.

D&L’s subsidiary, Chemrez Technologies, Inc., operates the largest biodiesel plant in the Philippines, located in Quezon City, with an annual production capacity of 90 million liters. The rising demand for biodiesel follows the government’s mandate requiring all diesel fuel sold in the country to contain 3% biodiesel or coco methyl ester, effective October 1 of last year. The blend is set to increase to 4% by October 1 this year and further rise to 5% by the same date next year.

BusinessWorld reports that D&L sees these regulatory developments, along with the growing recognition of the economic and environmental benefits of biodiesel, as a prime opportunity to invest and expand within the industry. The company considers this an important moment to reinforce its leadership and broaden its presence in the biodiesel market.

D&L has maintained a positive long-term outlook on the Philippine biodiesel sector, recognizing the substantial benefits of increasing the biodiesel blend for the economy, environment, and consumers. With the completion of its P10-billion manufacturing facility in Batangas, and no other major capital expenditures currently planned, the company is now weighing the feasibility of constructing a new biodiesel facility.

“D&L has the financial flexibility to potentially undertake the construction of a new biodiesel facility, which would require a significantly smaller capital expenditure compared to the Batangas plant,” the company stated.

Further investments in biodiesel production align with D&L’s commitment to sustainability, as increasing biodiesel output would contribute to reducing carbon emissions, supporting the local coconut industry, and lessening the country’s dependence on imported fuel. Given that at least 20% of the Philippine population is directly or indirectly linked to the coconut industry, the potential economic benefits of further investments—including job creation and increased agricultural and manufacturing sector activity—are considerable.

D&L has earmarked P1 billion for capital expenditures in 2024. Despite rising operating and interest costs from the Batangas plant, the company recorded a 2% increase in net income, reaching P2.3 billion last year. With its strong financial position and a favorable regulatory environment, D&L is well-positioned to make strategic moves in the biodiesel sector, reinforcing its market leadership while driving economic and environmental benefits.