MANILA - D and L Industries, Inc., the parent company of Chemrez Technologies, the largest biodiesel producer in the Philippines, is experiencing an uptick in orders as clients prepare for the upcoming increase in the mandatory coco methyl ester (CME) blend in diesel fuel starting October 1.
According to Philippines News Agency, President and CEO of D and L Industries, during a virtual press briefing on Tuesday, the anticipation of the biodiesel blend's increase from 2% to 3% has spurred early orders from customers eager to comply by the effective date. "We're seeing significant advance ordering as our clients prepare for the new regulation," Lao noted. This trend is expected to bolster the company's performance in the latter half of 2024.
Under the Department of Energy's Circular 2024-05-0014, all diesel in the Philippines will be required to contain at least 3% CME, with plans to increase this requirement to 4% next year and 5% in the following years. The policy aims to promote cleaner energy, reduce fuel prices, and expand the market for local coconut farmers and biodiesel manufacturers.
Despite a 3% decrease in income from January to June 2024 compared to the same period last year, Chemrez Technologies reported a recovery in the second quarter, with a 3% growth over the previous quarter and a 13% increase from Q2 2023. Additionally, the company’s Batangas factory, which began operations in July 2023, achieved profitability ahead of schedule, posting a net profit of PHP 149 million in Q2 2024.
Lao expressed optimism about the future, citing the strategic advantages of the Batangas plant. "Our recent investments are beginning to yield substantial returns, and we anticipate continued growth and increased earnings from this facility," he stated.
For the first half of 2024, D and L Industries reported a 6% increase in earnings, reaching PHP 1.3 billion, up from PHP 1.24 billion in the first half of 2023. Lao remains positive about the company's long-term prospects despite current economic uncertainties, highlighting the global opportunities the Batangas plant could capture.