By James A. Loyola
D&L Industries, Inc. has started construction for a massive expansion of its manufacturing capacity while its parent company Jadel Holdings Co., Inc. has broken ground for a new research and development (R&D) facility to explore new products and technologies for D&L.
In a press briefing, D&L President Alvin D. Lao said D&L has yet to finalize the cost and timeline of the facilities to be built in First Industrial Township.
“Because of its size, we have not yet completed the plans,” Lao said.
He noted though that D&L expects that “the bulk of this expansion should be operating by 2021” adding that, while no project cost has been finalized, “this expansion can easily be financed by our cash flow and debt since we have a lot of room in our balance sheet to borrow.”
Meanwhile, Jadel Holdings, the holding company of the Lao family and the parent company of D&L, is planning to build the Jadel Research Center (JRC) which is envisioned to house new research initiatives in areas that are outside DNL’s current fields of research.
Lao said that, while D&L’s own R&D department are focused on the needs of existing products and clientele, JRC will be exploring new fields and ensuring D&L’s long-term growth by creating a new research pipeline.
“We are very excited to embark on this strategic project. We recognize that R&D is at the core of our business and represents the biggest source of earnings growth and margin expansion,” said Lao.
He noted that, “this investment represents our family’s steadfast commitment to both R&D and innovation, allowing us to achieve sustainable growth in new and existing businesses and increase our relevance to customers.”
JRC will be an eight-story LEED-certified building located in Quezon City and Jadel will shoulder 100 percent of the capex for JRC. Start of operations is expected to be in 2021.
The state-of-the-art research center is meant to be a research platform that will allow the Lao group to explore potential growth areas without D&L taking significant risks.
D&L, however, is strategically positioned to benefit from JRC’s research initiatives in areas that may complement its existing business segments.
JADEL sees JRC as a strategic and long-term investment and aims to sustain its operations and generate returns on investment by selling or licensing successfully developed technologies.
D&L has the option to be the licensee for customized products and technologies that are relevant and complementary to its existing business segments, while non-complementary products and technologies may be licensed to other companies outside of the D&L group.