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Chemrez Technologies Inc. said it is targeting areas such as the
troubled areas in the Middle East that are largely neglected by
other suppliers to increase exports, executives said.
The firm has started to sell its high
value-added products such as oleochemicals in less-supplied areas
like Iran, Lebanon, Egypt and Asian countries in the Indo-China
region, Francis A. Caluag, Chemrez Tech chief finance officer, told
reporters on the sidelines of the company’s stockholders meeting.
Calauag said, “Our five-year growth plan is
export-driven. The reality is we have a large market locally, [but]
we do not have a big room to grow unless the economy behaves like
China. In order for us to grow faster than the economy, we have to
export [so that] increasingly our revenues would come from
exports.”
The company, the country’s market leader in
oleochemicals, managed to capture at least 80 percent of the local
biodiesel market last month with oil companies as its main
customers. However, Caluag said it is uncertain whether the company
can sustain this level. The firm targeted only 75-percent market
share by year-end.
Dean Lao Jr., Chemrez Tech chief operating
officer, said the Middle East, although it sources most of its
oleochemicals from Europe, offers the company the biggest potential
for export growth because, “[in] ‘troubled’ markets we do not
have much competition . . . opportunities are better [as] ignored
markets have better prices, better loyalty, probably longer lasting
relationships.”
Lao added that for the next five years, exports
would comprise 80 percent of the company’s revenue pie from
supplying manufacturers with oleochemicals like glycerine, which is
used by the soap and detergent industry, and emulsions for the
paints and coatings industries.
These high-margin products already make up 70
percent of the company’s total revenues while the rest come from
resins sales, which bring single-digit margins for Chemrez Tech due
to volatile commodity prices. The company has to import
petrochemicals to make these resins so it has to take advantage in
the temporary dips in price in the world market.
Caluag said “the trend is going up” as the
company has positioned itself as supplier of raw materials. He added
that in the marketing front-end, the company has been booking sales
at the cost of the raw materials.
“That’s why we end up with single-digit
margins because that’s playing poker.”
Chemrez Tech ended last quarter with a net
income of P96 million, a 31-percent jump year on year as
consolidated revenues increased by 51 percent to P1.07 billion. The
growth was driven mainly by wholesale biodiesel revenues, the sale
of which was not mandated yet by law during the same period last
year. It was only on May 6 last year that the 1-percent biodiesel
blend was made available to the public.
-- Likha C. Cuevas-Miel
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