This potential expansion comes at a time when energy self-sufficiency and environmental sustainability are becoming critical national goals.
D&L’s subsidiary, Chemrez Technologies Inc., already operates the country’s largest coco-biodiesel facility and pioneered Asia’s first continuous production plant in 2006.
Big picture
“D&L maintains a positive long-term outlook on the local biodiesel sector, recognizing the significant benefits that an increased biodiesel blend can offer to the economy, environment, and consumers,” the company said in a statement.
“By developing the industry, several facets of the economy are set to benefit. With at least 20 percent of the Philippine population directly or indirectly benefiting from the coconut industry, the potential for economic value creation in the form of additional investments and jobs in both the agriculture and the manufacturing sectors are significant,” it added.
Analysts’ view
In a note to investors on Monday, AP Securities said that with D&L Industries’ Batangas plant now completed and no major capital expenditures in the pipeline, the company has the financial flexibility to move forward with a new biodiesel facility.
AP Securities maintains its “Buy” rating with a target price of P8.01 per share, which is higher than the company’s current price of P5.39 each.
Savings, trickle-down effect
Higher biodiesel blends reduce carbon emissions by up to 78 percent compared to petroleum diesel, and can increase fuel mileage by around 10 percent—translating to real savings for consumers.
The move also boosts the coconut industry, which supports around 20 percent of the Philippine population through farming and related jobs. Using more locally sourced fuel can also ease pressure on foreign exchange reserves by reducing dependence on imported oil.
