Chemrez sees big increase in biodiesel demand

MANILA, Philippines - Chemrez Technologies Inc., the country’s top biodiesel, resins and oleochemicals producer, said it expects demand for biodiesel to significantly increase this year.

The company said this optimism is anchored on the implementation of government’s plan to further increase biodiesel content in fuel products and move from the B2 blend (two-percent coco-biodiesel in diesel) to a B5 blend.

B2 was implemented starting February 2009 and contributed significantly to the 22-percent growth in ChemrezTech’s oleochemical sales. B5 is expected to be mandated before the end of the year.

Coco-biodiesel and other oleochemical specialties will remain the largest operating business of ChemrezTech in 2010, contributing majority of the company’s revenues.

However, the company said the biofuel business will expectedly experience tough competition. Thus, to lessen the impact of aggressive pricing, it will continue to reduce production costs while increasing efficiency.

As biodiesel is the lowest value application for coco-menthyl ester, ChemrezTech is in the process of developing and eventually marketing more value-added downstream products.

The company said it hopes to retain its dominant position in the supply of resins for coatings, plastics and construction while its powder coating business is looking to further increase its market share by introducing new products and increasing promotions on unique product lines.

Meanwhile, Chemrez Tech also announced that its board of directors has approved the declaration of cash dividends worth a total of about P158.6 million.

ChemrezTech declared a regular cash dividend of six centavos (P0.06) per share and a special cash dividend of another six centavos (P0.06) per share.

The cash dividend, a total of 12 centavos (P0.12) per share, is equivalent to 33 percent of the company’s net income of P474 million in 2009. All stockholders of record as of July 20, 2010 are entitled to the cash dividends.

“It is the policy of ChemrezTech to share the fruits of its operations with its shareholders. In line with this policy, ChemrezTech has consistently been paying dividends since 2001,” the company said.

ChemrezTech said it was able to deliver a strong financial performance in 2009, despite an uncertain economic environment, with consolidated sales growing 10 percent and net income rising 27 percent.  — Donnabelle Gatdula