This isn’t necessarily the case for the Lao family’s food ingredients and industrial chemicals giant, D&L Industries Inc., which has navigated similar challenges before and even sees potential opportunities.
“In our view, the apparent trade tensions between the US and China present opportunities for companies like us to supply companies that cannot source from either the US or China,” Alvin Lao, D&L’s president and CEO, said in a statement on Thursday.
“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,” he added.
D&L stockholders welcomed the announcement, with the company's share price rising 3.34 percent to P6.19 apiece on Thursday, valuing the firm at P44.2 billion.
Competitive advantage
D&L highlights its competitive advantage through a flexible pricing strategy that helps offset forex and commodity price swings. Strong R&D allows the company to adjust prices as needed.
About 31 percent of its sales come from exports, focusing on specialized, hard-to-replicate products, while its coconut-based offerings benefit from the Philippines’ abundant supply and the group’s efficient supply chain.
Learning from the recent past
D&L is no stranger to dealing with a trade war.
“In 2019, the trade war and the generally cautious sentiment globally had an impact on our exports, which fell 25 percent year-on-year,” Lao remarked.
“Since then, many companies globally have begun restructuring their supply chains to navigate around possible future tariffs. With these adjustments, we anticipate less impact on our export business this time compared to 2019,” he added.
