D&L Industries Inc., the country’s top specialty food ingredients and oleochemicals producer, was recognized by the Institute of Corporate Directors (ICD) for its outstanding corporate governance practices based on the ASEAN Corporate Governance Scorecard (ACGS). 

In a disclosure to the Philippine Stock Exchange (PSE), the firm said this is the fourth consecutive year that D&L Industries received a Golden Arrow Award from the ICD.

The ACGS measures the performance of the companies in the areas of facilitating the rights and the equitable treatment of shareholders, how they relate to their different stakeholders, 

Ensuring transparency and accountability thru timely disclosure of material information, and how the board guides the company strategically, monitors the management, and ensures the board’s accountability to the company and the shareholders.

ICD is a non-stock, not-for-profit national association of corporate directors and other stakeholders engaged in corporate governance. Its mission is to champion good corporate governance and stewardship for the benefit of the society. 

It aims to be the key catalyst in the Philippine corporate governance ecosystem for inclusive and sustainable development.

“We are honored to receive such prestigious recognition from the ICD,” said D&L President and CEO Alvin Lao. 

He added that, “as a company, it’s our top priority to uphold the highest standards of good corporate governance. We see it as the solid foundation for a sustainable and lasting organization,”

D&L posted a net income of P1.24 billion in the first half of 2023. For the second quarter of the year, earnings grew by nine percent quarter-on-quarter to P646 million.

While events over the past three years have resulted in a change in sales mix favoring commodities, Lao said the first half of 2023 saw a reversal of this trend with High Margin Specialty Products (HSMP) revenue contribution back to pre-pandemic level at 63 percent from 51 percent in 2022. 

This, in turn, resulted in a 4.6 ppts improvement in blended gross profit margins to 17.7 percent. Lao explained that HSMP products have margins of over 20 percent while their commodity products have margins of only five to 10 percent.

“Over time, as commodity sales continue to normalize and as the company continues to allocate much of its resources in growing the HMSP business, D&L expects to see a continued increase in HMSP revenue contribution,” he said.

Nonetheless, while commodity products have lower margins, the company intends to keep this segment as it continues to have a strategic importance in the overall business in the form of maintaining customer goodwill, protecting HMSP business by blocking off potential competitors, covering some of the fixed costs, and assuring the quality of HMSP raw materials.

D&L’s next generation facility in Batangas started commercial operations last July. With upgraded capabilities and a footprint that will more than double the company’s existing manufacturing capacity, the new plant ushers in a transformational period for the company.