Chemical manufacturer D&L Industries Inc. said it plans to expand current production capacity by the third quarter to sustain growth across all businesses.
D&L president Alvin Lao said in a press briefing the planned expansion would enable the company to prepare for new opportunities that might arise.
“The average utilization rate of our plants is at 65 percent so there is still room for growth. But we don’t want to reach the situation where there maybe opportunities but we don’t have the capacity. So we need to start expanding,” Lao said.
Lao said the details of the planned expansion, including plant location, capacity and spending requirement could be finalized in the third quarter.
D&L has six production facilities, including five in Metro Manila and one in Laguna.
D&L said recurring net income reached P2.64 billion in 2016, up 15 percent from the previous year.
Revenues also grew 14 percent to P22 billion from a year earlier, on the back of a broad-based increase in sales volume and higher prices of raw materials.
High-margin specialties accounted for 61 percent of revenues, while the remaining 39 percent was accounted for by commodities.
Despite the volatility in foreign exchange and commodity prices, group-wide gross profit margin was maintained at 18 percent.
“For this year, we are expecting that as long as the economy continuous to grow well, net income growth should be at mid to high teens,” Lao said.
The company also generated a positive free cash flow of P534 million in 2016.
D&L is primarily engaged in product customization and specialization for the food, plastics and aerosol industries.