D&L Industries Inc., the country’s top specialty food ingredients and oleochemicals producer, has maintained its highest Issue Credit Rating of PRS Aaa, with a Stable Outlook, for its outstanding Fixed Rate Bonds amounting to P5.0 billion.

Philippine Rating Services Corporation (PhilRatings) said obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong. 

On the other hand, a Stable Outlook is assigned when a rating is likely to be maintained or to remain unchanged in the next 12 months.

PhilRatings said the rating and outlook were assigned given D&L’s strong market position in the industries that it is engaged in and its diversification of products offered and markets served.

Also considered were D&L’s innovation-driven specialty products that protect the Company from keen competition and ensure continued demand from customers; relatively stable margins amid higher cost and expenses, including incremental costs related to the Batangas expansion facility; and conservative debt management and adequate cash flow generation.

Since its incorporation in 1971, D&L pioneered and established its market leadership in various industries through product customization and specialization. 

The Company has four principal business segments, namely: Food Ingredients, Oleochemicals and Other Specialty Chemicals, Specialty Plastics and Consumer Products Original Design Manufacturer (ODM).

D&L largely invests in strong research and development (R&D) capabilities in order to produce high quality High Margin Specialty Products (HMSP), and to keep up with the evolving demand of consumers. 

“Given the unique technicalities of producing HMSP, clients tend to conduct business with the same suppliers, hence, ensuring continued demand for the products of the Company. The R&D-driven nature of the products being manufactured, likewise, limits the entry of potential players in the market,” PhilRatings said.

It added that, “On September 14, 2024, D&L is expected to settle its P3.0 billion Fixed-Rate bonds upon maturity. Given its conservative leverage position, as well as its profit and cash flow performance, the Company is seen to be able to comfortably service its maturing obligations.”

As the economy continues to recover from the pandemic, D&L is positive that it is more capable to withstand adverse environments with the expertise it has learned through its years of operations. 

The Company strives to enhance its capabilities in order to maintain a strong market position. D&L is optimistic given the continued strong demand for its products as these mainly cater to essential industries and basic materials.