Oleo-Fats primed for higher demand from firms looking for import alternatives
Oleo-Fats Inc., a subsidiary of D&L Industries, is investing heavily on research and development to provide local firms alternatives to imported goods.
“On the back of increasing complexities in taste and logistics, more and more companies are looking to develop local supply to reduce dependence on imports,” D&L said in a statement. “As the dominant domestic player, Oleo-Fats is positioned to take advantage of this opportunity.”
While the congestion in the country’s ports proved to be a setback for D&L’s plastics business, it was a boon to its foods business and created a long-term opportunity as “it highlighted the importance of having a strong domestic supplier like D&L, particularly in such highly dynamic markets as consumer F&B,” the company said.
D&L increased its spending on research and development for food by 82 percent in 2015, fuelling the performance of its high-margin business as it transformed into a total food ingredients and solutions systems for its clients. Its research and development on food increased the company’s visibility and footprint in new markets that have traditionally been relying on imports.
Lower vegetable oil prices may have reduced Oleo-Fats revenues by 10 percent but the improvement in its revenue mix improved its margins, increasing its net income by 19 percent in 2015. The performance was also aided by the increase in the volume of sales of its specialty ingredients and food safety products that had bigger margins.
“By going up the value chain and exploring margin opportunities through R&D investments and partnerships with companies such as Ventura, Oleo-Fats is building a strong specialty base that could weather the unpredictability of commodities,” the company said.
Oleo-Fats is the leading manufacturer of industrial fats and oils, specialty fats and oils, and other food ingredients in the country. (Eileen A. Mencias)