LISTED food and plastics manufacturer D&L Industries said on Thursday it was planning to increase its capital expenditure (capex) by 15 percent to 20 percent every year to fund the upgrading of equipment.
D&L President and Chief Executive Officer Alvin Lao said that this year, the company would set aside P370 million to P380 million for capex, higher by 16 percent compared with the P315 million capital spending set last year.
“A lot of our equipment, our plants are still very much usable—they are not yet obsolete even after five or even 10 years, so that’s why our capex cycle can be extended much longer and we are not under much pressure compared to other companies [who need]to be constantly investing in capex,” he told reporters after the firm’s stockholders’ meeting.
Lao also said the company was targeting to boost its exports in line with its vision to expand its business in the next three years.
“In the first quarter, our exports were already 24 percent of our revenues. From 18 percent last year, now exports account for 24 percent. We’re hoping that exports will continue to be robust,” he added.
“But if we don’t expand in the next three years, it is possible we won’t have enough room for further growth. The last thing we want to do is not to be prepared for additional growth, so we should be prepared.”
He said the company was considering certain acquisitions but these have yet to be finalized as some potential companies did not fit the firm’s criteria.
At the stockholders’ meeting, D&L Industries declared a cash dividend of P0.235 per share for a total cash dividend of P1.68 billion, payable on August 10 to shareholders of record as of July 27.
D&L’s principal business activities include manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use.