MANILA - Biodiesel producer Chemrez Technologies Inc. (ChemrezTech) reported an 11.4% growth in net income after tax for the first semester of 2009 despite tough economic conditions brought about by the global crisis.

In a statement, the company said its net income in January to June rose to P308.5 million from P276.9 million in the same months in 2008 as the volume of its sales jumped 51% on the back of strong demand for biodiesel and oleochemicals.

ChemrezTech said its coco-biodiesel sales were driven by the step-up in local requirements as the government mandate for biodiesel blend was increased from 1% to 2% effective February 6, 2009 pursuant to the Biofuels Act of 2006.

ChemrezTech remains the leading major supplier to the local biodiesel industry, with a market share of approximately 50%.

The company's consolidated revenues, however, fell 3.2% to P2.37 billion from P2.45 billion. The bulk of revenues was still contributed by coco-biodiesel sales but these gains were partially dampened by the general soft pricing on account of much lower coconut feedstock costs and a more intensely competitive market environment.

As of June 30, the Department of Energy had registered 12 local biodiesel manufacturers, with a total annual capacity of 395.6 million liters.

With the steadily increasing number of DOE-registered biodiesel manufacturers, ChemrezTech is facing greater competition, resulting in lower profit margins for biodiesel. The company expects this trend to continue.

On the other hand, the non-biodiesel oleochemicals business continued to post the highest sales growth, with first-half sales already reaching full year 2008 sales.

ChemrezTech reported that its gross profit margin in the first half was at 17% compared to 14.4% in 2008 while net profit margin improved to 13% from 11.3% in 2008.

ChemrezTech said it had no substantial capital expenditures so far while none is expected for the rest of the year.