Leading food manufacturer gets SEC okay for P7.2-B IPO

By Zinnia B. Dela Peña, The Philippine Star

Posted at Nov 05 2012 06:59 AM | Updated as of Nov 05 2012 02:59 PM

MANILA, Philippines - D&L Industries, one of the country’s leading manufacturers of food ingredients and specialty plastic colorants and additives, secured the Securities and Exchange Commission’s green light to raise as much as P7.2 billion through an initial public offering.

The company will offer to domestic and international markets up to 1.07 billion shares, representing as much as 30 percent of its outstanding capital, at a maximum price of P5.85 each share to raise around P6.26 billion.

In case of strong demand, D&L’s majority shareholder Jadel Holdings Co. Inc. may sell an additional 160.71 million common shares at the same price to generate P940.15 million in proceeds.

Proceeds from the offering will be used for investments and acquisitions, payment of financial obligations and for general corporate purposes.

Maybank ATR Kim Eng Capital Partners is the lead international and domestic underwriter, issue manager and sole bookrunner for the issue.

D&L produces numerous products and focuses on designing innovative, customized and specialty product solutions for customers mostly in the food and plastic products businesses.

Through wholly-owned subsidiary Oleo-Fats, D&L manufactures a diverse line of specialty fats and oils, culinary and other specialty food ingredients, industrial fats and oils for leading food manufacturers and fast food restaurant chains in the country.

Among D&L’s customers include top food chains such as Jollibee, McDonalds, Kentucky Fried Chicken, all of the major donut chains and food and drink firm Universal Robina Corp.

D&L also owns First in Colours and D&L Polymers & Colours, which produce a line of various products used in the manufacturing of plastic products including pigment blends, color and additive masterbatches and engineered polymers for the Philippine and export markets.

Another wholly-owned subsidiary, Aero-Pack Industries, is the only manufacturer of customized aerosol products in the country and is a leading contract filler for various home and personal care product producers.

Affiliate Chemrez Technologies is engaged in the manufacture and sale of specialty industrial chemicals such as biodiesel, oleochemincals, powder coatings and resins, which have various applications in the construction, shipping, soap and detergent and furniture industries.

D&L expects exports to significantly drive its sales. Based on its prospectus, foreign sales as a percentage of total sales for D&L’s colorants and plastic additives business grew to 49 percent last year from 38 percent in 2009.

To increase its visibility overseas, D&L intends to increase its agents as well as enter into strategic alliances with established manufacturers and marketers in select foreign markets.

For the seven months ended July 31, 2012, D&L’s colorants and plastic additives segment registered revenues of P1.57 billion, 27.7 percent higher than the P1.23 billion recorded in the same period a year go.

The growth is mainly attributable to an increase in sales regionally, particularly in Japan, as Japanese manufacturers and consumers began to recover from the effects of the tsunami in 2011.