Cemex gets incentives for new cement production line
MANILA, Philippines – Cement-maker Cemex Holdings Philippines Inc. has bagged a set of fiscal incentives, including income tax holiday, for its 1.5-million metric ton new integrated cement production line in Antipolo City.
Cemex Holdings’ wholly-owned subsidiary Solid Cement Corp., operator of the Antipolo cement factory, obtained from the Board of Investment (BOI) “pioneer” status as a new producer of cement but with “non-pioneer incentives.”
Solid Cement primarily produces cement products that carry the Island and Rizal cement brands. This expansion program will jack up the total capacity of its Antipolo plant to 3.4 million metric tons yearly.
The “pioneer” status with “non-pioneer” incentive means that the 1.5-million MT cement production line will have non-pioneer incentives, such as shorter income tax holiday, for the time being. This is until the project is able to present proof that it is using new technology.
Pioneering firms are granted six-year income tax holiday while non-pioneering firms are given four years of income tax holiday.
To lengthen its income tax holiday to six years from four years, the Cemex unit will have to prove its use of new technology.
In the Philippines, a preferred area of investments may be classified as “pioneer” if the activity involves the manufacturing or processing, not merely assembly or packaging of goods or raw materials that have not been produced in the Philippines on a commercial scale. This status can also be granted if the project uses a design, formula, scheme, method, process or system of production or transformation of any element or raw material or finished good which is new and untried.
Last November, Solid Cement availed itself of a $75-million revolving credit facility from an affiliate, Cemex Asia B.V. Part of the proceeds will be used to construct and install the new production line in Antipolo.
Cemex began operations in the Philippines in 1997 and has grown to become one of the leading cement producers. The company debuted on the Philippine Stock Exchange in 2016 and is now valued by the stock market at around P13.3 billion.
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