Sustainability Report

Better Lives
Wellness for All Stakeholders

Dedicated to Better Lives
The D&L Dictionary (July 30, 2021)

v.  ded·i·cat·ed : devoted to a cause, ideal, or purpose : zealous

Two brothers started a company in 1963, manufacturing, marketing, and distributing colorants, chemicals, and additives for the plastic, paint, and ink industries.  By the time they formally incorporated the company as D&L Industries in 1971, it was a rough time to run an enterprise.  Buckling down to work, Dean Lao thought, “Doing business in the Philippines is a challenge.  I look at the positive side.  There’s an opportunity in everything.”

D&L thrived.  Thinking back, Leon Lao mused, “We grew in spite of this crisis.  Whatever the circumstance, it is the drive, hard work, and attitude that matter.  That is what the spirit of an entrepreneur is all about.”

Being in business is no mean feat.  Look no further than our founding brothers to see how the passion to overcome the odds could nurture a dream to great heights.  From just two thousand pesos in hand all those decades ago, here and now, in the midst of a pandemic in 2021, D&L Industries is valued at over 57 billion pesos in the Philippine Stock Market.

Dedication, devotion, zeal.  This is the secret sauce that drives every ka-D&L.

adv.  bet·ter : to a higher or greater degree : more

“It should be a matter of doing what you do best.”

— Alex Lao

We do not settle.  Hindi pwedeng pwede na.

We simply do better.  Our products are better.  Our service is better.  We are better.

No ifs, no buts.  Fact.

adj.  bet·ter : more attractive, favorable, or commendable

It shows in the products we create & innovate for our clients & consumers, be it the perfect shade of teal for their wall, the perfect blend of taste & aroma for their sauce, the perfect balance of care & scent for their skin.

This is where each and every ka-D&L counts.  When sales & marketing deliver above & beyond what their clients need & expect, when technical & production meticulously fine tune their formulations & processes for quality & efficiency, when supply chain, finance, & admin ensure the smooth running of the engine that is D&L, the result is a better product.  We provide a better service.

Edwin Lao sums it best.  “D&L’s most important asset is our dynamic and loyal employees.  How the company will grow and prosper in the next 50 years will be dependent on how we hire, train, and retain the best talents.”

n.  plural lives : the sequence of physical and mental experiences that make up the existence of an individual

Why do we do what we do?

We do it for God.  We do it for country.  We do it for family.  We do it for us.

By so doing, we cannot help but be driven, for these are the most important things in life.  We have a burning desire to do well… nay, to do our best!

Every good word and every good deed fuel the fire even more.  Every task well done makes it easier for the next task to be done better.  We do well, we feel great.

Our peers get infected with our joie de vivre.  Our products are delightful, our services, par excellence.  Our customers & stakeholders are gratified.

The factory hums & thrums with efficiency.  There is little or no waste.  The community prospers.  The environment is cleaner.

Our lives are better.

“We are always passionate about what we do.  We were the first to come into the market, and we can’t be stagnant.  We can’t take it easy or be complacent.  We work together for long term growth.”

— John Lao

This is us.

We are D&L.

Better Lives
GRI 3-1, 3-3

D&L Industries recognizes that its business directly impacts the lives of investors, employees, customers, suppliers, communities, and the environment.

The Company delivers long-term value for investors through sustainable investments and offers employees a safe and supportive work environment with competitive compensation & benefits, opportunities for growth, and wellness programs for body & soul.

For customers, D&L provides high-quality products and services, building long-term relationships through exceptional customer service and innovative solutions. The Company works with suppliers transparently, building strong relationships based on mutual respect and trust.

D&L invests in initiatives that support local businesses, education, and the environment, creating better lives for communities.

Throughout all this, the Company minimizes its environmental footprint through sustainable practices, protecting the planet for future generations.

Economic Performance

GRI 2-6, 3-3, 201-1, 203-2 | SDG 1.2, 8.2, 9.4, 9.5

D&L’s strong corporate performance is key to providing better lives for all.  With growth comes opportunities to do more, to do better, to pursue even more sustainable action.

For FY2022, D&L Industries recorded its highest ever net income, demonstrating a full recovery from the COVID pandemic amidst a confluence of macroeconomic headwinds.  The P3.3 billion of earnings exceeds the company’s previous record of net income achieved in 2018.  The company’s full year 2022 net income stood at P3.3bn, higher by 26% YoY.  In 4Q22 alone, earnings were up 62% YoY to P777 million.  These results outperformed expectations and were mainly driven by strong consumer spending amidst wider economic reopening and the company’s exports undergoing resilient growth.  The three biggest business segments of the company—food ingredients, oleochemicals and other specialty chemicals, and specialty plastics—all booked positive earnings growth for the year which were either at record highs or slightly below.

D&L’s robust earnings for the year demonstrate its ability to weather various macroeconomic conditions given its diversified businesses, the essential nature of the products it manufactures, and its ability to adjust its selling prices regularly.

Employee Management

GRI 3-3, 2-7,

Employee Hiring and Benefits

GRI 3-3, 401-1, 401-2 | SDG 1.2, 3.8, 5.1, 5.5, 8.2 8.5, 8.6, 10.3

D&L’s hiring practices only give merit to the competence and skills of applicants, and match them according to job requirements as defined by the Hiring Manager and the department filling the position.  Gender, race, age and other discriminatory characteristics are never standards by which applicants are decided upon.

Standard social and government-mandated benefits are provided upon employment.  Minimum wage laws are complied with at the lowest entry level positions.  On top of the benefits mandated by the government, the company implements programs which safeguard the health and welfare of its employees and their families through health insurance, maternity assistance, medicine subsidies, and even financial risk alleviation initiatives.  The Performance Dashboard is used as the basis for merit increases, promotions, job rotations, new assignments, and training and development.

Educational Program

SDG 4.1, 4.3, 4.4, 4.5

The Lao Foundation, under the Lao Boh Lim Educational Program, has been extending scholarships to deserving dependents of both regular and outsourced service providers (OSP) employees since 2018.

The Foundation has also been rewarding children of employees in all levels who excel academically through the Educational Excellence Awards established in 2005.  It also recognizes auxiliary educational achievements such as placing in national and international competitions, passing board exams, among others.

Talent Succession Planning

There is also a detailed succession plan organized by the Talent Management team identifying and grooming high potential employees to assume greater roles in the future. It emphasizes that employee development and progression is a top priority for the company.

Employee Training & Development

GRI 404-1, 404-2 | SDG 5.1, 5.5 8.2, 8.5, 8.6, 10.3

D&L takes the growth of its employees very seriously because management believes that the development of its people will ultimately redound to the benefit of the group.  In this regard, D&L has established a dedicated team specifically for employee training and development called ‘Infinite Learning’.

Since its formalization in 2019, the team has been organizing various training sessions and programs about many different topics including certification compliance, equipment handling, and the refinement of soft skills, among many others.  The team has always been open to suggestions for new topics of interest, and is always looking at trends in order to keep training topics up to date.  D&L has also forged partnerships with a number of institutions such as Dale Carnegie Training, the Ateneo Graduate School of Business, and the Philippine Red Cross to share their expertise in certain areas with the group.  High potential employees are enrolled under the Leadership Development Program in the hopes of producing future leaders.

The team also maintains a feedback system for both internal and external training sessions.  It is to ensure that sessions are actually useful and informative, and to take note of any subtopics that may have been missed or any additional topics that may call for extra sessions.

The Infinite Learning team, together with D&L’s Information Systems Department, had launched a series of training sessions that aims to upskill its employees to be able to work better digitally.  The series also came at an opportune time because COVID hit and all non-essential employees in the group were forced to work from home.  The team has since pivoted and continues to conduct training sessions virtually.

Labor-Management Relations

GRI 2-16, 2-26, 3-3, 402-1 | SDG 8.8

“Kumustahan” Sessions (or catch up sessions) are regularly conducted between upper management and all the employees in order to present the state of the business, and to respond to concerns and issues raised by employees.

D&L has always been a company that listens to its employees.  Everyone has a direct line to the Managing Directors, the President and CEO, and their immediate managers.  It is a two-way communication with no layers.  HR has also implemented a 24/7 HR Program so employees are able to reach out to the HR Business Partners anytime, any day.

Diversity and Equal Opportunity

GRI 405-1 | SDG 5.1, 5.5, 8.2, 8.5, 8.6, 10.3

D&L has no restrictions in hiring and promotion.  There is no discrimination and no age requirement, and the company engages retirees to become consultants in order to continue working for the company for as long as they wish.  Job postings do not require gender, age, and any other restriction as long as the candidate is qualified for the role being filled.  Resumes are not required to contain photos or any such distinguishing information, other than their experience for the role they are being considered for.  Despite operating production plants normally populated by male workers, 34% of the workforce in D&L are female.

The Infinite Learning Team reviews training requirements and works with the Talent Management Team to identify competency gaps and deliver appropriate training programs regardless of gender, age, and race.  The main consideration is the individual needs of employees.

Occupational Health & Safety

GRI 403-1, 403-2, 403-3, 403-5, 403-8, 403-9, 403-10 | SDG 8.8

D&L implements a Safety and Health Program to comply with RA 11058 and other relevant regulations through its Health, Safety and Environment (HSE) Department.  Each plant has a satellite HSE unit.  The department regularly conducts virtual safety orientations for new employees (direct hire and OSPs), contractors, and third-party haulers in light of the pandemic.  It also acknowledges the innumerable hazards that come with operating manufacturing plants.  Thus, it also conducts various other plant-specific seminars and training sessions on topics such as hand and finger safety, aspect impact hazard and risk assessment, EPR (fire, spill, typhoon, earthquake), work environmental hazards, behavioral safety, and welding, electrical, forklift, chemical and boiler safety, among many others.

The department regularly conducts safety walkthrough audits with follow-up monitoring of corrective actions where necessary.  It also enforces self-assessment audits in all of its plants, warehouses and buildings.  It has an efficient accident reporting mechanism, and conducts safety drills where possible given the pandemic.

As much as physical health and safety is important, employees’ mental health is also a priority for the company.  D&L’s HR Business Partners provide counselling to employees needing help.  Employees can freely approach any of the HR representatives and discuss issues without fear of reprisals.

Rights & Privacy

Labor Laws & Human Rights

GRI 3-3

The family culture in the company allows employees to be open and straightforward in discussing any issues they have without fear of retaliation.  Communication is top-down, bottom-up, and sideways.  There are no layers and barriers, so issues are resolved at the onset and no grievances are escalated.

D&L takes human rights issues seriously, and always considers the topics of forced labor, child labor, discrimination, and harassment in its dealings within and outside its subsidiaries.  Its Code of Business Principles strictly outlines the company’s stance and policies on such matters, and guides all its employees on business decisions involving such.

Customer Management

GRI 2-16, 2-26, 3-3, 416-1 | SDG 12.8

As a B2B company, D&L deals with most of its customers on a face-to-face basis, thus making customer service one of its top priorities.  Its dedicated sales teams have been working throughout the pandemic to ensure that every customer is served well despite the local and global restrictions.  The nature and specificity of its products also call for close coordination between the customers and the technical teams of the subsidiaries.  Major concerns are elevated to top management quickly, and are dealt with immediately.  The Company believes that customer feedback is very important especially when it comes to product development.
Key Concerns Actions Taken to Address Concerns
Consumer Products ODM
Worry over stock outs during pandemic, floods, unforeseen events Created a business continuity plan for products and personnel
Stock security for imported raw materials and packaging Aggressive forecasting, maintenance of 3 months’ worth of stocks, and monthly updating of forecasts
Food Ingredients
Constant shifting of consumer wants Present customer range of product flavors and builds based on current up-to-date trends
Simplification of customer supply chain Educate customers on proper product usage across their respective product ranges for convenience and cost efficiency
Reduction of customer regulatory risk Ensure products supplied to customers are compliant with local food laws and regulations, as well as global food safety standards
Demand for formulation of natural products and use of renewable packaging Development and innovation geared towards natural, pursuit of regulatory compliance (ecosearch, organic certification)
Low stocks Discuss lead times with customers, produce safe level of buffer stocks
Warping of sealed HDPE packaging for hydraulic brake fluids Redesign bottle, nitrogen purging
High raw materials price Sourcing of new suppliers, exploration of alternative materials
Long lead time Increased inventory levels, advanced ordering of raw materials, advanced booking of orders, and regular updating of forecasts
Limited finished goods Close coordination between sales and warehouse teams prior delivery
Shortage of raw materials Regular communication between sales, technical and production teams on level of raw materials on stock and urgent items for production

Marketing and Labeling

GRI 3-3, 417-1 | SDG 12.8

The Company has no history of substantiated complaints on marketing and labelling and, therefore, no complaints addressed.

Most of its products and services are offered to business entities and not directly to consumers.  They only indicate the product name, packing size, and batch number on the labels.

Customer Privacy

GRI 3-3, 418-1 | SDG 16.10

Customers provide information for purposes of applying for credit extension.  The information is both private and confidential and, therefore, is treated with utmost care to prevent leakage.  Once the credit application has been approved, the Customer Information Sheet is kept by a Marketing Assistant for safekeeping.  A separate form is prepared and submitted to the Accounting department.  It contains information needed only for customer account creation and does not contain any unnecessary personal information.  Access to the customer data master file is limited only to an assigned person who is at least supervisory level.

The Company is committed and motivated to protect its customers’ information.

Product Health and Safety

GRI 3-3; 416-1 | SDG 12.8

Aero-Pack’s adherence to green chemistry has made many a home beneficiaries of organically sourced household products.  These eco-friendly products have provided families peace of mind—secure in the belief that the likes of insect killers and dishwashing detergents are safer and greener.

Chemrez’ green innovations have provided coco-based wellness solutions for health-conscious consumers.  The remarkable market acceptance of its medium chain triglyceride (MCT), Laurin™, is a strong testimony to the company’s green advocacy.

D&L Polymer & Colours (DLPC) has developed a key raw material—durable and non-toxic—used in the production of the toy sensation, Hatchimals.  The use of raw materials on other products of DLPC also complies with the RoHS (Restriction of Hazardous Substance) requirement.

First in Colours provides business solutions to companies given the potential ban on single-use plastics.

Oleo-Fats’ standard operating procedures mandate that all food-related products undergo shelf life studies, microbial, and sensory tests to ensure these remain safe for human consumption until the end of shelf life.

Focusing on what the customer wants and needs, subscribing to green chemistry and subjecting finished products to rigorous testing processes have helped the Company develop products that are healthy and safe for humans and the environment.

Data Security

GRI 3-3, 418 | SDG 16.10

In the sphere of ever-evolving technology, data security and privacy have become increasingly important topics.  With the emergence of alternative working arrangements, threats to cybersecurity are at an all-time high.  The Company recognizes this, and ensures that various controls are in place to secure all pertinent data.  It is compliant with the Data Privacy Act of 2012 and all other regulations set forth by the National Privacy Commission.

An appointed Data Protection Officer (DPO) oversees and monitors all topics concerning cybersecurity.  The success of a cybersecurity program hinges on how well a company’s employees understand the importance of the policies, and how consistently these rules are followed.  Thus, a data security and privacy awareness program is permanently in operation.  It includes a monthly wallpaper and email newsletter, as well as regular online training on cybersecurity.

The Company makes extensive use of data sharing agreements with clients, third parties, and sister companies.  Client information is treated as strictly confidential, even between subsidiaries, and client permission is always sought before it is shared.  When and where applicable as required by law, a privacy notice is displayed on all external websites for the information of site visitors.  Privacy impact assessments are regularly conducted to evaluate each department on processes that collect or process personal information.  Departments that deal with a large volume of sensitive information and those that are at high-risk of data breaches are also closely monitored by the DPO.

Community Action

GRI 3-3 | SDG 13.1

The Company employs an in-house team of safety officers trained in firefighting, rescue, and emergency response.  These assets are deployed not just for contingencies in its offices, warehouses, and facilities, but also to assist local communities and government and volunteer teams during emergencies and natural calamities.  

The Company also fields volunteers in such diverse civic activities as tree planting, river clean-up, fumigation, firefighting, and first aid training in and around its communities