D&L Industries Navigates Global Trade Challenges, Eyes Growth Opportunities

Amidst the changing global trade landscape, marked by potential new tariffs, D&L Industries sees not just challenges but significant opportunities as well for companies equipped to navigate these changes effectively.

“In 2019, the trade war and the generally cautious sentiment globally had an impact on our exports, down 25% YoY that year,” D&L President & CEO Alvin Lao remarked.

“Since then, many companies globally have begun restructuring their supply chains to navigate around possible future tariffs. With these adjustments, we anticipate a lesser impact on our export business this time around compared to 2019,” Lao added.

While volatility is expected in the near-term, D&L’s pricing structure and its ability to adjust selling prices protects the company from wild swings in forex and commodity prices. Leveraging on its R&D capabilities and value-add to customers, D&L anticipates that it will be able to continue adjusting selling prices in the foreseeable future.

“In our view, the apparent trade tensions between the US and China present opportunities for companies like us to supply to companies who cannot source from either the US or China. Our new plant in Batangas gives us the capacity and capability to cater to bigger export customers. This puts us in a prime position to capture opportunities arising from the evolving international trade environment,” Lao continued.

D&L's export sales, which constitute about 31% of total sales, are rooted in products where the company holds a competitive edge. These include highly customized products with significant R&D input, which are not easily replicable, and products leveraging the Philippines' natural resources, particularly coconut-based products, which benefit from D&L's strong supply chain.

“The products that we export are generally distinguished by their unique functional and technical properties, making D&L a go-to supplier for many global customers. With an aggressive export strategy and enhanced production capabilities, we maintain our guidance of reaching 50% export sales contribution to total sales over the medium term,” Lao concluded.

In the first nine months of 2024, D&L saw a 38% year-over-year increase in export sales, driven by the exploration of new markets and a surge in global demand for coconut-based products, recognized for their sustainable attributes. The company's export portfolio remains well-diversified, not relying predominantly on any single region.

D&L Industries is a Filipino company engaged in product customization and specialization for the food, chemicals, plastics and consumer products ODM industries. The company’s principal business activities include manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use. Established in 1963, D&L has the largest market share in most of the industries it serves, as well as long-standing customer relationships with the Philippines’ leading consumer and manufacturing companies. It was listed on the Philippine Stock Exchange in December 2012.