Thai broiler firm airs concern over tax perks, protests

Charoen Pokphand Foods Philippine Corp. (CPF) on Wednesday defended the tax incentives it receives from the government, claiming that its current production is hardly making a dent in the local livestock industry.

Speaking to reporters for the first time since local livestock growers started their protest against the company, CPF senior vice president Arnnop Jeanprasert said that the current production of the company is negligible compared to the weekly meat consumption of the country, which has been pegged at 13.7 million birds.

“If the Philippine government decides to remove or reduce the incentive already given us, we cannot do anything but respect the decision. However, it would keep us seriously wondering what was our fault and where did we go wrong,” Jeanprasert said before giving reporters a tour of the company’s broiler farm in San Ildefonso, Bulacan.

CPF, a unit of the Thai multinational conglomerate, started its broiler production in October 2012. It currently produces 50,000 live chickens a week.

Jeanprasert said the company’s total investments in three projects—aqua, feed mill and livestock—has already reached P7 billion.

Because the company’s investments are way above the minimum $20 million set by the Board of Investments in qualifying for incentives, the company was granted tax perks.

The CPF was given a four-year income tax holiday for its swine project, and six years for its chicken project. In both projects, the company may enjoy duty-free importation of capital equipment although it is required to pay the compulsory 12-percent VAT.

“Our production now is not even 1 percent of the total demand for chicken. We don’t know how we are affecting the local industry,” said Eligio Val Manlongat, assistant general manager of CPF’s agro-industrial business group.

Farmers and livestock raisers have been up in arms against the company and the BOI, saying the perks granted to the Thai subsidiary will upset the local industry by flooding the market with cheaper products.

Protesting groups have called on the Department of Agriculture and Malacañang to take away the incentives.

But the official warned the Philippine government that the withdrawal of the incentives would harm the relationship of the country with foreign investors.

“It would send a very negative message to other investors thinking of putting money and doing business in this country,” Jeanprasert said.

The company maintains farms in Floridablanca, Pampanga; Gerona, Tarlac; and Guiniginto and Ildefonso, both in Bulacan. It introduced new technologies that are 10 percent more efficient compared with the usual mode of livestock production, the official said.