The Board of Investments (BoI) recently granted pioneer status and income tax holidays (ITH) to a P7-billion greenfield cement plant in Bulacan, even as it slapped strict guidelines on any ownership transfer while the firm is enjoying these perks.
Documents showed BoI awarded Eagle Cement Corp.’s P6.73-billion cement plant income tax holidays for four years. The San Ildefonso, Bulacan-based plant will start operation in December 2009.
The company will supply cement to Metro Manila and the rest of Luzon, the largest cement market in the country. It will be able to manufacture 1,080 million metric tons of cement per year, which is equivalent to 26.4 million bags of Portland cement. The firm also has its own power plant, which enables it to reduce its operation costs.
According to BoI papers, the largest shareholder of the company, with 60% of the shares, is a certain businessman named Manny C. Teng.
A Trade department official said the company was awarded tax perks because of the magnitude of its investments and because it has indicated that it would sell cement at a lower price than the existing industry price. It is estimated that the Eagle Cement’s factory price will be 25% less than prevailing factory prices, the BoI said. Prevailing retail prices of cement is at P150 to P160 per bag of cement.