D&L TO ISSUE BONDS

D&L Industries is set to launch its maiden bond offering this year from P3 billion up to P5 billion of bonds with a planned term of 3 to 5 years.

The proceeds from the bond issuance will primarily be used to finance the company’s expansion plans in Batangas which involves a total estimated Capital Expenditure (CapEx) of P8 billion and the corresponding working capital requirements.

Construction started in late 2018 and completion is expected by the end of the year. Remaining CapEx to be deployed for the project is about P4 billion.

The plant is seen to be instrumental to the company’s future growth, in line with plans to develop more high-value-added coconut-based products and penetrate new international markets.

It will mainly cater to D&L’s growing export business in the food and oleochemicals segment.

Also, it will add the capability to manufacture downstream packaging, thus allowing the company to capture a bigger part of the production chain.

For instance, while the company primarily sells raw materials to customers in bulk, the new plants will allow it to “pack at source”.

This means that D&L will have the ability to process the raw materials and package them closer to finished consumer-facing products.

This will enable D&L to move a step closer to its customers by providing customized solutions and simplifying its supply chain, which is of high importance given global logistical challenges and concerns.

“With interest rates still remaining low, we believe it’s an opportune time to tap the debt market. Our maiden bond offering will be a useful financial exercise for the company and will allow flexibility for future opportunities we can potentially take advantage of,” remarked President and CEO Alvin Lao.

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