Listed chemicals and food inputs manufacturer D&L Industries Inc. is setting a lower capital expenditure (capex) budget this year as its new production plant in Tanauan, Batangas, nears completion.
D&L president and CEO Alvin Lao said the company’s capex will be lower at P1.6 billion from P3.5 billion in 2022.
“Mostly still for the completion of the new Batangas plant, which will start operations in July. Plus maintenance capex for existing plants,” Lao said.
In March, the chemicals maker said its new production plant would begin operation in the middle of 2023.
The plant is seen as expanding the manufacturing capabilities of the company’s food, oleochemicals, and consumer products ODM or original design manufacturer segments.
The new plant will operate under D&L’s wholly-owned subsidiaries, Natura Aeropack Corporation (NAC) and D&L Premium Foods Corp. (DLPF).
As of end-March, D&L saw lower earnings at P594 million as supply chain concerns had prompted customers to front-load or stock up on inventories last year, and they were still consuming these in the first two months of 2023, according to Lao.
“While the first two months of the year were weaker than expected, we anticipate things to be much better moving forward as we started seeing volumes coming back in March,” he said.
The D&L chief said momentum is coming back as the supply chain goes back to normal and customers have used up their excess inventories. —VBL, GMA Integrated News