BPSI had sought pioneer incentives for the multi-billion peso recycling plant to be put up in San Fernando, Pampanga.
In a disclosure to the Philippine Stock Exchange, SMC said it was officially informed by the BOI yesterday that BPSI’s application for registration of the polyethylene terepthalate (PET) recycling project on a pioneer status has been rejected.
"We continue to believe in the merit of our application and will be submitting an appeal shortly to persuade the BOI to reconsider and act favorably," SMC said.
The application was denied by the BOI due to the absence of the implementing rules and regulations for projects under the Solid Waste Management Act.
If approved, BPSI would be entitled to a package of perks such as a six-year income tax holiday, exemption from wharfage fees, duty-free importation of spare parts, and additional deduction on taxable income.
The recycling plant, the first of its kind in Asia, would produce environment-friendly packaging materials for the local food and beverage industries using state-of-the-art technology approved by US and European Food and Drug Administrations. Under this technology, post-consumer plastic bottles will be processed and converted into food-grade packaging materials and containers.
The materials to be used are 100-percent recyclable as used plastic packaging can be recycled into food-grade containers, fibers for clothing and carpets using a variety of recycling procedures.
The plant is expected to start commercial operations in May 2004.
SMC said the project will create jobs for local residents in terms of direct employment and opportunities from industries that would provide services for the collection, processing and conversion operations of the project.
The project is consistent with SMC’s thrusts to help grow the economy and to protect the environment.
SMC has secured a P5-billion syndicated loan term facility from 11 banks, headed by the state-owned Development Bank of the Philippines, to bankroll the project.
The facility, under DBP’s Environmental Infrastructure Support Credit Program II, is payable in five years.
SMC said plastic has taken global markets by storm as the material of choice for beverage bottles. The format offers good design, flexibility, safety and is also lighter and occupies less space than most other alternatives.