Chemrez Technologies Inc. (ChemrezTech) reported Monday a 37.2 percent jump in net income to P131.7 million in the first quarter of 2009 from P96 million in the same period last year, owing to strong oleochemical and biodiesel sales, as well as higher margins.

In a disclosure to the Philippine Stock Exchange, ChemrezTech said consolidated revenues in January to March amounted to P1.15 billion, up 7.7 percent from the P1.07 billion in the same months in 2008, while net profit margin improved to 11.4 percent from 9 percent.

The company largely attributed the revenue growth to the surge in domestic demand for coco-biodiesel after the government stepped up the required biodiesel blend from 1 to 2 percent in February.

However, it said the increase in coco-biodiesel volume sales was partially dampened by lower selling prices on the account of declining coconut feedstock costs and a more intensely competitive market environment.

Latest data from the Department of Energy showed that total registered annual capacity of local biodiesel manufacturers has expanded further to 380 million liters as of March 31, 2009, more than double the 150 million liters required under the 2-percent blend mandate.

Meanwhile, ChemrezTech said it experienced lower sales volumes in certain product lines due to generally weak markets amid the economic downturn.

While certain downstream markets exhibited continuing growth, ChemrezTech said its other industrial customers reduced their orders in response to lower demand as well as shrinkage in their own end-user markets. 
Customers in industries manufacturing durable goods such as automotive parts, construction and appliances have been affected the most.

On an aggregate basis, ChemrezTech’s oleochemical segment (coco-biodiesel and other oleochemicals) accounted for a total of 66 percent of the consolidated revenues for the first three months of 2009. 

The firm’s traditional resins product segment (comprising mostly of polystyrene, polymer dispersions and unsaturated polyester resins) and color dispersions for the paint industry contributed close to 30 percent, down from 41 percent in 2008, while powder coatings accounted for the 4 percent balance. 

The notable transformation in revenue mix from 2008 to 2009 continues to underscore ChemrezTech’s growing profile as a producer of "green chemistry" or environmentally-friendly chemicals from a combination of renewable sources of raw materials and engineered products that are characterized by low toxicity and environment friendliness.

ChemrezTech grew its gross profits by 22 percent to P179.4 million in the first quarter of the year and continued to improve its administrative and marketing overhead, which resulted in lower expense ratios of 3.5 percent as against 4.2 percent in 2008.

The company does not expect any substantial capital expenditures for this year.