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Philippine D&L Industries Remains World Class


D&L Industries Incorporated is a Philippines-based company doing product customization and specialization in food, plastics and aerosols.

More than 70% of sales are to consumer companies and more than 50% come from food ingredients.

D&L has many large domestic and international companies in the food and chemicals sectors as customers, including KFC, Jollibee (JFC PM), 3M (MMM US) and Petron Corp. (PCOR PM).

Business Description

The majority of DNL’s sales (about 80%) comes from the domestic market. The food ingredients segment contributes 52% of total sales and makes industrial and specialty fats and oils, culinary and other food ingredients. It supplies leading manufacturers and fast-food chains in the Philippines, such as Universal Robina (URC PM), KFC and Jollibee (JFC PM).

The oleochemicals, resins and powder coatings segment comprises 32% of DNL’s sales, and it produces Coco-Biodiesel (derived from coconut oil) and oleochemicals (derived from vegetable oils) that are used to make soaps and detergents. It also makes resins, such as polystyrene, acrylic emulsion and polyester. Petron Corp. (PCOR PM) is one of its biodiesel customers.

Colorants and plastic additives contribute 13% to total sales. It provides plastic color dyes and PVC compounds to the automotive industry, as well as emulsions and colorants to Boysen Paint, a leading Philippine paint brand.

The aerosol segment produces 3% of total sales. DNL makes aerosol cans and components used for home care products, such as body sprays, insect control sprays, spray paints and air-conditioner cleaners.


Co-founder Leon Lao, a director since 1971, has filled the role of chairman since 2012 when the company went public. The Lao family, of which he is a member, retains ownership of 69% of the company.

Taking over after a relative, John Lao, ran the company as CEO for the first four years of its public existence. Alvin Lao, a member of the younger generation, took control in August 2016.

He has inherited a company in prime performance, currently ranked at #1 overall among its peers.

World Class Benchmarking

Profitable Growth has been World Class for most of the last five years, except for a dip to #2 in 2013.

D&L Industries ranked among the best 97 of 970 medium-sized Materials companies globally.

Profitability drives Profitable Growth and has remained #1 for each of the last five years.

Growth, however, has been less stellar. It fell to #7 in 2015 from #1 in 2014 and then to #5 in 2016, which means Growth ranked average in the past 12 months.

Asset utilization and Profit margin are both performing well at #2.

Sales growth has been strongly competitive over the last five years. Margin change has suffered though in the last two consecutive years.

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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

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Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.


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