DNL: Coconut oil gaining traction in foreign markets

Chemical manufacturer D and l industries inc. (DNL) said its exports, particularly coconut-based products under food and oleochemicals, remained relatively resilient during the first quarter.

DNL said the strong demand for its coconut-based products may offset some of the losses from the domestic market caused by the lockdown imposed by the government to contain the spread of Covid-19.

The company said interest in coconut oil continues to gain traction in foreign markets due to its

perceived natural antiviral and antibacterial properties. It is also an organic and a sustainable substitute for many petroleum-based raw materials used in personal and home care products.

The company said it sees continued strong coconut oil exports, which should offset some of the weakness in the domestic market in the near term and it said it will capitalize on this trend as it develops more products and penetrates more markets globally. “The past couple of months have been extremely challenging due to various operational restrictions and as demand dried up in many industries. The month of April is likely the worst month as it’s the only month that was under 100 percent ECQ [enhanced community quarantine] to date. In May, we saw a pick up in activity due to pent-up demand and as some restrictions were eased by the middle of the month. We expect further recovery in June as more and more of our customers are ramping up operations,” said DNL President and CEO Alvin Lao.

“We saw steep declines in most of our businesses in the first quarter when we only had two weeks of quarantine. It is likely that the second quarter will not be any better considering strict lockdown measures were in effect for the months of April and May.”

Lao said the company is optimistic that improvements might be seen in the third quarter, but may still be below pre-pandemic levels.

There’s a probability of a “reasonable recovery” in the fourth quarter as Christmas period in the Philippines sets in as early as September.

“In addition, Filipino culture is very social. We love gatherings and meeting up with friends and family. I can sense that there’s still a lot of pent-up demand right now. So this could be positive once restrictions are eased further. This should help the country recover faster than most countries. A possible monkey wrench, however, is a second wave that can return us to a stricter quarantine,” said Lao.