D&L Industries, Inc., a listed specialty food ingredients and oleochemicals manufacturer, is considering the construction of a second biodiesel plant to meet the growing demand following the government’s decision to expand the biodiesel blend requirement, reports BusinessWorld.
The company stated in an email over the weekend that it is in the final stages of assessing the risks and returns of building a new facility. The decision will largely depend on how well the project aligns with its strategic growth objectives and long-term shareholder value.
Currently, 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 litres.
Since October 1 last year, the government has mandated that all diesel fuel sold in the country contain at least 3% biodiesel or coco methyl ester. This blend will increase to 4% by October 1 this year and to 5% by October 1 next year.
“These regulatory developments, along with increasing awareness of the economic and environmental benefits of a higher biodiesel blend, create a promising opportunity for investment in the industry. D&L sees this as a crucial moment to reinforce and expand its leadership,” the company said.
With the recent completion of its P10-billion manufacturing facility in Batangas and no major capital expenditures currently planned, D&L is now evaluating the feasibility of constructing a second biodiesel plant.
“D&L has the financial capacity to undertake the construction of a new biodiesel facility, which would require significantly less capital expenditure compared to the Batangas plant,” the company added.
The company emphasized that additional investments in biodiesel production would contribute to reducing carbon emissions, supporting the local coconut industry, and decreasing dependence on imported fuels.
“With at least 20% of the Philippine population directly or indirectly benefiting from the coconut industry, the potential for economic value creation in the form of new investments and job opportunities in both agriculture and manufacturing is substantial,” D&L stated.
D&L has allocated approximately P1 billion for capital expenditures this year. In 2024, the company’s net income increased by 2% to P2.3 billion despite higher operating and interest expenses related to the Batangas plant.
For detailed information and further insights, please refer to BioEnergyTimes.com, which provides the latest news about the Biodiesel Industry
