Monday, April 02, 2007 Cold storage company seeks tax incentives
HOMEGROWN RD Group of Companies in General Santos City is seeking incentives for a major expansion project involving a P350 million cold storage facility, an official confirmed last week.
Joaquin Tiongco, investment division head of the City Economic Management and Cooperative Development Office, said the local investment board would likely grant Igloo Cold Storage Complex Corp. tax relief due to the magnitude of its investment.
Igloo Cold Storage, a subsidiary of RD Group, would have a capacity of 10,000 metric tons.
The investment falls under the large scale enterprises category and would have tax break of up to seven years, Tiongco said.
Cold storage also falls within the top investment priority of the city, the undisputed "Tuna Capital of the Philippines", under the support service sector, he added.
He noted that tax incentives offered by the local government unit were meant to attract the attention of local and foreign investors.
Igloo Cold Storage's application for tax incentives is yet to be tackled by the local investment board.
RD Export, another subsidiary of RD Group, presently operates a 4,800- metric ton cold storage facility.
Igloo Cold Storage is expected to generate 35 more workers to the business empire founded by the elusive fishing magnate Rodrigo Rivera Sr., a former local banker.
Tiongco said Igloo Cold Storage would service 60 percent of the storage needs of the tuna and marine processing arms of RD Group while the other 40 percent is allocated for outside clients.
Ritche Rivera, RD Group's executive vice president and chief operating officer, revealed middle of last year the company's massive cold storage expansion project.
"This will be the biggest cold storage facility outside Luzon that is capable of handling 10,000 tons," Rivera said.
Presently, San Miguel Corp. operates in Luzon island the largest cold storage facility in the country with a capacity of at least 15,000 tons, he added.
Rivera said the project will mainly support the company's tuna manufacturing unit, since this rakes in more money for the firm.
According to him, processed canned tuna products earn threefold more than the fresh form, explaining that for a 40,000 to 50,000 kilos of fresh tuna, it would only generate the company roughly P1.2 billion.
But for processed tuna using the same volume, the earnings would reach as much as P3.6 billion, he noted.
Rivera pointed out that their tuna manufacturing line contributes 70 percent of the total revenues for the firm's fishing endeavor.
"Actually, we can afford to close down our fish catching activities because we can import or buy from other local producers tuna raw materials. But we have not been doing this [stop fish catch activities] because some 7,000 to 8,000 families will be affected," he said.
Aside from fishing, RD Group has interests in banking, pawnshop, real estate, aquaculture, among others. (BSS)
