An official of publicly-listed producer of oleochemicals and specialty plastics and food products on Wednesday expressed optimism for their operations this year amidst the impact of the Middle East crisis.
D&L President and Chief Executive Officer Alvin Lao, in a media briefing, said they have learned from past experiences, and have put in place measures such as taking care of their suppliers, given the fact that the Philippines is a small market for foreign providers in terms of what the company needs — raw materials, global supply chain, and oil supply.
He said the first two months of this year looked promising, but this changed after the military operations between Iran and the U.S. and Israel started towards the end of February.
He, thus, believes that “periods of disruption also create opportunities,” noting how the company faced the issues when the Russia-Ukraine war started in 2022, as well as the past oil crises in 1973 and 1979.
During the Russia-Ukraine war, he said the Philippines had just reopened from the pandemic lockdown.
He said that while the latter is a welcome development, the war poses a risk.
He, however, pointed out that it was not all negative at that time, as the company was able to secure more suppliers and pass the price changes to their customers.
“It doesn’t mean the same thing will happen this year,” he said, noting that no one knows how long the current conflict in the Middle East will last.
Lao explained that compared to new businesses, D&L is prepared, given its experiences in the last six decades.
“We were able to survive. We’ve learned the lessons. We have put in a lot of measures to (address the situation) because we still remember what we did before,” he said.
Lao said they have 74 days’ worth of inventories to keep its manufacturing facilities running, “but the trick is getting more inventory.”
Last year, the company registered 10.6 percent growth in recurring net income to PHP2.6 billion, with the fourth-quarter level rising 20 percent to PHP640 million.
Lao declined to project what they will book this year, saying it is hard to set any figure due to the fragility of the current situation.
“We threw out all our projections because all of the assumptions are no longer applicable. We had dollar-peso exchange rate assumption, interest rates, GDP growth, and so on and so forth. Nothing is the same anymore. And things are still changing. It’s so hard to project at the moment,” he added. (PNA)