LISTED D&L Industries Inc., the country’s leading customized food ingredients and oleochemicasl firm, is looking to develop biodegradable plastic products to boost its domestic sales and exports, particularly to Japan and Italy.
Alvin Lao, D&L executive vice president and chief finance officer, said in an interview that the company is venturing into eco-friendly plastic products as the demand for this segment has been consistently increasing.
“We are developing biodegradable plastics for a wide range of applications. These plastics include films for packaging and agriculture as well as more rigid plastic materials that are used in the manufacture of household appliances,” Lao said.
He said plastics for this particular segment will no longer be confined to shopping bags.
Lao noted that the huge potential for plastics could allow D&L’s specialty plastics business to maximize the growth of the company’s specialty foods ingredients business, which is currently the company’s fastest-growing revenue contributor.
“We are looking at Japan for biodegradable plastics. There is high demand for biodegradable plastics in Japan. For this year, we will finalize the formulation and [we will]do the market test to clients there, also in Italy,” Lao said.
While this new venture will not have an immediate effect on D&L’s revenues, the company is optimistic given the great potential for demand overseas.
At present, the company’s exports account for 17 percent of its total revenues and D&L is keen on increasing its export business by 20 percent this year.
Domestically, he said there is also an increasing need for biodegradable plastics as local government units [LGUs] are now implementing a no-plastic policy to prevent clogging waterways which often contributes to flooding.
“While many LGUs have responded by banning the use of plastic packaging products, many consumers are finding the use of paper bags very impractical since they tear easily and cannot be used for wet products,” Lao explained.
“The only way to make paper products stronger is to add wax,” said Lao, but he pointed out that wax is not biodegradable and even increases the cost of paper packaging.
On the other hand, Lao said biodegradable plastic is just as strong as regular plastic bags.
Although marginally more expensive than regular plastic, it is much cheaper than paper bags and has less environmental impact because it does not require the cutting of trees and decomposes in 30 days if put underground.
Over the longer term, Lao said D&L will focus on increasing collaboration with global players in various industries, which today include wire harness and biopolymers, to develop a stronger pipeline of higher margin, higher growth opportunities.