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