D&L boosts research, manufacturing capacities

D&L Industries Inc., the listed manufacturer of specialty foods ingredients, plastics and oleochemicals, is boosting its research and manufacturing capacities as it gears up for stronger demand in the future.

In a press briefing, D&L president Alvin Lao said the company is aggressively expanding its manufacturing capacity in Batangas although the completion date and size have yet to be finalized.

This developed as its parent company Jadel Holdings Co. Inc. broke ground on a new research and development facility to explore new products and technologies for D&L.

Lao said the facilities would be built at the First Industrial Township in Batangas as D&L expects “the bulk of this expansion to be operating by 2021.”

While the company has yet to finalize the cost of the expansion, Lao is optimistic this can easily be financed by the company’s cash flow and debt.

Jadel Holdings, the holding company of the Lao family and the parent company of D&L, is building the Jadel Research Center (JRC) which is envisioned to house new research initiatives in areas that are outside DNL’s current fields of research.

“We are very excited to embark on this strategic project,” Lao said.

The company recognizes that R&D is at the core of the business and represents the biggest source of earnings growth and margin expansion.

D&L’s own R&D department is focused on the needs of existing products and clientele. Against this backdrop, JRC will be exploring new fields and ensuring D&L’s long-term growth by creating a new research pipeline

“This investment represents our family’s steadfast commitment to both R&D and innovation, allowing us to achieve sustainable growth in new and existing businesses and increase our relevance to customers,” Lao said.

According to the plan, JRC will be be an eight-story LEEDcertified building located in Quezon City.

Jadel will shoulder 100 percent of the capex for the facility, which is targeted to be operational by 2021.

The state-of-the-art research center is meant to be a research platform that will allow the Lao group to explore potential growth areas without D&L taking significant risks, D&L said.

At the same time, D&L is positioned to benefit from JRC’s research initiatives in areas that may complement its existing business segments.

JRC is seen as a strategic and long-term investment and aims to sustain its operations and generate returns on investment by selling or licensing successfully developed technologies.

D&L has the option to be the licensee for customized products and technologies that are relevant and complementary to its existing business segments, while non-complementary products and technologies may be licensed to other companies outside of the D&L group.

Moving forward, Lao is optimistic of D&L’s continued growth this year of at least 10 percent.