RFM embarked on thorough product R & D and market research, as it re-strengthened the market positioning of brands with evidently enormous potentials.
With full, clear-sighted confidence, we expect these to become our market leaders. RFM Corporation believes that building brands for today is the surest way to build the business for tomorrow. |
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| RFM Sustains Income Growth to P245M |
| Tuesday, April 21, 2009 |
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Diversified food company RFM Corporation once again displayed its resilience amidst the economic slowdown, with net income increasing to P245 million or about five percent higher than the previous period's P234 million on the back of a 23 percent growth in sales.
In a disclosure to the Phil. Stock Exchange and Securities and Exchange Commission, RFM President and CEO Jose Concepcion III said that "we don't seem to see any sign of recession. RFM sustained its profitability through various cost reduction measures and stronger sales from our branded food group and this has led to a larger absolute margin base".
RFM focused on branded consumer products, driving consolidated net sales to P7.5 billion, from P6.1 billion the previous year. It prioritized value creation for its consumers by introducing innovative, relevant and affordable products.
Concepcion added that "stronger sales, ranging from 30% to over 60% growth rates, were achieved by the branded food and beverage businesses. Sales of beverage products increased with the launching of more Sunkist juice and iced-tea flavors in more convenient PET bottles. The launch of Vitwater as a first-mover in the vitamin-enriched water category also contributed remarkably to the growth with very strong consumer acceptance. Meanwhile, Selecta milk growth was led by the Fortified milk product lines which grew by over 80%".
Concepcion cited innovations from its new production facilities. He said that "Swift Meats launched Chicken Franks, Luncheon Meat, and Meaty Corned Beef, given the versatility of its newly renovated meat plant, which also helped push stronger sales in the second half of the year. This was complemented by huge growth in Fiesta pasta sales which are now coming out from our new and modern pasta plant in Pasig. The sustained growth has made Fiesta the national market
leader in spaghetti as of year-end".
"We expect the growth momentum to continue as we approach the stronger months and as we put more marketing support in building our brands", Concepcion added. The disclosure mentioned that Selecta, RFM's ice cream joint venture with Unilever, likewise posted an impressive 3rd year of double-digit growth with the successful launch of Family Pack,
Supreme and Limited Edition. Concepcion said that "since we bought the Selecta brand 20 years ago, it has steadily grown to become the number one ice cream brand in the country today. Our successful joint venture partnership with Unilever has helped strengthen our position in the market, and this was complemented by the entrepreneurial team of Selecta led by my brother John Concepcion. Selecta ice cream now has a solid 54% market share. Ice Cream exports also
grew driven by volumes from the Middle East market".
For his part, RFM's Executive Vice President and Chief Operating Officer Felicisimo Nacino, Jr. reported that "the Gross profit base increased to P1.63 billion from P1.49 billion. However, the gross margins declined to 21.6% from 24.6% in 2007 as the improvements in yields and efficiencies on account of new facilities and other production cost reduction measures could not offset the generally higher raw material costs that affected everyone in the industry in 2008. Thus, to temper the impact on gross margins, Operating Expenses had to be closely managed, to keep it at 18.1% of sales, versus the 20.4% figure of the previous year".
Nacino emphasized that "moving forward, RFM shall continue with its efforts to bring greater value to consumers with more product innovations at affordable prices, coupled with strategic brandbuilding programs, as it continues to keep watch on its productivity levels and cost structure amidst the volatile raw materials market". |
