MANILA, Philippines - D&L Polymer and Colours (DLPC), a subsidiary of customized food ingredients manufacturer D&L Industries Inc., has secured an extension of its tax perks.
The Philippine Economic Zone Authority (PEZA) upgraded the status of DLPC to pioneering status, allowing the company to enjoy another tax holiday.
“Including a one-year bonus for meeting PEZA’s minimum net foreign exchange earnings (NFEE) requirement, DLPC’s income tax holiday entitlement was extended by three more years to 2016,†the company said in a statement.
In 2009, DLPC started commercial operations with a corporate income tax holiday as it was granted a non-pioneering status by PEZA.
PEZA is the government’s primary agency for the promotion of investments in export-oriented manufacturing and service industries.
“Since then, DLPC’s facility in Carmelray Industrial Park I in Canlubang, Laguna has made further progress in manufacturing, in particular, of specialty polymers and color compounds for export,†the company said.
DLPC said it was the first in the Philippines to produce such compounds on a commercial scale. The specialty raw materials, also called engineered polymers, are tailored depending on customers’ specifications.
A non-pioneering status means that companies employ existing manufacturing methods. It allows firms to enjoy four years of tax perks and other incentives such as the duty-free importation of capital equipment.
Companies with a pioneering status, for their part, involves the use of new technology or the creation of a new product.
DLPC’S specialty products are primarily used in the manufacturing of insulation for automotive wirings and accessories.
“DLPC is the leading automotive wiring compounder and the only non- Japanese company to supply the Japanese global wire harness industry in the Philippines,†the company said.
In terms of income, DLPC said its NFEE for the first three years of its operations exceeded $4 million, or eight times more than PEZA’s $500,000 minimum requirement.
This qualified the company for an additional year of income tax holiday.
“The income tax holiday is expected to have an impact on the after-tax profitability of D&L Industries, which effectively owns 100 percent of DLPC,†the firm said.
Early this month, DLPC and another D&L Industries unit, First in Colours, became the local distribution partners of NatureWorks, the world’s leading supplier of renewably-sourced plastics or biopolymers.
The development marks D&L Industries’ fourth partnership with a foreign firm so far this year.
Sales from high margin goods through partnerships signed early this year will allow the company to jack up its earnings to almost P1.4 billion for the entire year.
D&L Industries customizes food ingredients, plastics, biodiesel and aerosols. The company is principally into the manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use.