D&L sees gradual recovery

D&L Industries, the country’s largest specialty foods ingredients, plastics and oleochemicals firm, reported that it has started to see some recovery in the local market amid easing restrictions while its exports remained resilient.

“The past couple of months have been extremely challenging due to various operational restrictions and as demand dried up in many industries,” said D&L President & CEO Alvin Lao.

He added that, “The month of April is likely the worst month as it’s the only month that was under 100 percent 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 under general community quarantine,” noted Lao.

Under GCQ, restaurants and fast food chains have been allowed to utilize 30 percent of their dine-in capacity starting June 15.

“This should translate to better volume for the company’s food ingredients business which saw a significant drop in demand from the hotel/restaurant/caterer (HoReCa) sector during the first few months of the quarantine period,” said Lao.

In addition, the resumption of construction activities and public transportation, albeit on a limited scale, should help recover some lost volume in the other specialty chemicals and biodiesel segments under Chemrez.

“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,” explained Lao.

However, he said “We are optimistic that improvements might be seen in the third quarter, but may still be below pre-COVID levels. A reasonable recovery might be more probable in the fourth quarter as Christmas period in the Philippines sets in as early as September.”