BOI OKs tax perks for Cargill’s P2-B cut chicken pro­duc­tion

The Philippine Star - - BUSINESS - By LOUELLA DESIDERIO

The Board of In­vest­ments (BOI) has ap­proved the grant of tax perks to Cargill Joy Poul­try Meat Pro­duc­tion Inc.’s P2.08bil­lion mar­i­nated cut chicken pro­duc­tion project as an in­clu­sive busi­ness (IB) model project.

In a state­ment, the BOI said the ap­proval of Cargill Joy’s IB model project would al­low the firm to en­joy in­cen­tives.

Un­der the In­vest­ment Pri­or­i­ties Plan (IPP), an IB project ap­proved by the BOI can en­joy income tax hol­i­days for a to­tal of five years.

To be­come el­i­gi­ble for the in­cen­tives, at least 25 per­cent of the to­tal costs of goods sold should be de­rived from mi­cro and small en­ter­prises (MSEs).

In ad­di­tion, a min­i­mum of 300 in­di­vid­u­als from the marginal­ized sec­tors should be en­gaged in the project and at least 30 per­cent of which should be women.

Income de­rived from such en­gage­ment should be equal to at least min­i­mum wage, or base­line income plus 20 per­cent in­crease, which­ever is higher, by the end of the third year of op­er­a­tion.

As part of the IB cri­te­ria, firms are also re­quired to pro­vide tech­ni­cal as­sis­tance and ca­pac­ity-build­ing mea­sures to MSEs and in­di­vid­u­als en­gaged, fa­cil­i­tate fi­nanc­ing ac­cess, and/or pro­vide in­puts or tech­nol­ogy that can in­crease pro­duc­tiv­ity and im­prove prod­uct qual­ity.

Cargill Joy, which started op­er­a­tions for the project in Batan­gas in Novem­ber last year, has set a pro­duc­tion tar­get of 79,465 met­ric tons an­nu­ally.

“Cargill Joy has the po­ten­tial to cre­ate in­clu­sive im­pact in Batan­gas by en­gag­ing the low-income farm­ers through sourc­ing of goods and ser­vices,” Trade Un­der­sec­re­tary and BOI man­ag­ing head Ce­ferino Rodolfo said.

Cargill Joy ex­pects the to­tal cost of goods sold to reach P5.9 bil­lion by year three, with around P1.54 bil­lion to be sourced from MSEs.

For the project, the com­pany’s agri­cul­ture team pro­vides tech­ni­cal sup­port to the MSEs which they consider as part­ner­grow­ers.

Com­pany vet­eri­nar­i­ans guide the MSEs on how to fur­ther im­prove the grow­ing process of chick­ens.

In ad­di­tion, the com­pany part­ners with other firms for tech­ni­cal as­sis­tance for poul­try op­er­a­tions such as sem­i­nars on ven­ti­la­tion sys­tems, dis­in­fec­tion tools and au­dits and weather spe­cific man­age­ment.

Cargill Joy would also help en­able part­ner-grow­ers to avail of cap­i­tal ex­pense loans from banks.

While only those en­gaged in the tourism and agribusi­ness in­dus­tries may qual­ify for IB in­cen­tives in the IPP at present, the BOI wants firms from other sec­tors to de­velop their own IB mod­els as well.

“We look for­ward in see­ing more IB part­ner­ships in the pri­vate sec­tor as we work to­wards multi-sec­toral col­lab­o­ra­tion for a bal­anced econ­omy where shared pros­per­ity is en­joyed,” he said.

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