Philippine Daily Inquirer
4:25 pm | Wednesday, June 26th, 2013
Jose Concepcion III INQUIRER file photo
MANILA, Philippines—RFM Corp. has earmarked P1 billion for capital spending this year to expand its pasta, ice cream, bread-making as well as to realign beverage facilities.
In a press statement on Wednesday, the Concepcion-led food and beverage firm said this year’s capital spending would substantially rise from the P350 million spending last year in order to cover the expansion in pasta operation and ice cream distribution infrastructure.
RFM is also spending for bread-making operations, distribution centers and the transfer of its milk and juice beverage facilities to Cabuyao, Laguna.
RFM likewise reported that its interim January-to-May performance net income for the period reached P315.2 million, which grew by 32 percent over the same period last year.
This was on the back of consolidated sales revenues of P4 billion for the same period, down by 6.7 percent year-on-year, as RFM’s former Swift meat business was no longer part of consolidated sales this year. The meat business was earlier sold to the Century Tuna group of the Po family.
Jose Concepcion III, RFM president and chief executive officer, said income growth was sustained with better margins from its production processes, due to the easing of commodity cost inputs such as milk and sugar, as well as efforts to cut processing costs, improve yields and bring down fixed overhead expenses.
RFM continued to strengthen further its supply chain competency to stay ahead of competition, Concepcion said, adding that the overall economic growth and sound fundamentals remained encouraging for consumer-oriented companies to build on its operations’ capabilities.
“We have to sustain our leadership in cost-efficiencies and productivities to be able to strengthen RFM brands’ long-term value-for-money proposition to Filipino consumers,” Concepcion said.
He also reported that RFM’s brands like Selecta Ice Cream, a joint venture with multinational giant Unilever, and Fiesta pasta have maintained their strong market leadership in their respective categories. Selecta ice cream continued to grow its market share to a dominant market position of 76 percent level, while Fiesta pasta kept a 28 percent market share in the pasta market, he said.
As a strategy, Concepcion said RFM was to give priority to its brand leaders, in terms of resource allocation and support to keep their competitiveness in the market.
“As we upgrade our supply chain capabilities, we shall continue to build on the very good momentum in terms of brand equity for Selecta ice cream and Fiesta pasta, through continuous marketing support and product innovations. We expect these efforts to lead to higher purchase frequency and per capita consumption that will lead to growing the market size,” he said.
RFM also reported that sales of Selecta milk and Sunkist juice drinks continued to grow faster than their respective category growth. These came about as the efforts in these brands were refocused to more responsive market segments, supported by product repackaging, aggressive merchandising, advertising and trade-related programs.
The company recently signed a new distributorship agreement with long-time condiments brand Marca Pina. This was in addition to the current selling and distribution service that RFM provides to Dole Philippines for its packaged fruit products in selected modern trade accounts and all downline accounts nationwide.
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Tags: Business , capital , Commodities , Food and Beverage , income , Profit , rfm corp.
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