At the company’s stockholders meeting yesterday, RFM president and chief executive officer Jose Concepcion III said he expects the food and beverage conglomerate to break even this year and start making money in 2005 as investments in advertising and marketing start paying off. Sales are expected to grow to P6.5 billion this year compared with only P5.72 billion in 2003, Concepcion said.
RFM’s net loss last year amounted to P455 million, significantly lower than the P1.29 billion incurred in 2002. The company suffered from weak consumer spending and investors’ confidence last year due to the peso depreciation, political uncertainties, the outbreak of the severe acute respiratory syndrome (SARS) virus in Asia and the tension between Iraq and the US.
Concepcion said RFM sees growth in sales volume to continue this year and the coming years as it steps up its marketing campaign. He said the company is also counting on the improved performances of subsidiaries Swift Foods Corp. and Philippine Townships Inc.
"We are confident that we can complete our transformation to a strong and respectable leader in the branded foods business," Concepcion said.
Concepcion said RFM will continue to focus on building up its branded foods business. Brands under the RFM umbrella include Sunkist Juice, Selecta Milk, Swift processed meat, White King Flour, and Fiesta Spaghetti.
He said the firm’s Fiesta brand noodles is now at number two and is close to grabbing the top spot from the Royal brand while its Selecta milk products have already overtaken Nestle’s Chuckie with a commanding market share of over 60 percent. "We will focus on what we see are potential brands in the future. With the right strategy, I think that in the next couple of years many of these brands that we have will become power brands," Concepcion said. RFM’s strategy of building brands through massive advertising, marketing and distribution support has paid off. When it acquired Cosmos in 1989, Pop Cola had a meager eight percent share of the market. After eight years, it controlled 28 percent and overtook Pepsi Cola. RFM later sold Cosmos to San Miguel Corp.
Selecta was another model of success for RFM. From a one percent share of the market in 1990 when RFM acquired it, its market share grew to 37 percent after 10 years. Unilever acquired 50 percent of Selecta in 1999 and in 2000, Selecta-Walls already gained market leadership. Selecta is now under joint venture management.
Meanwhile, RFM executive vice-president Felicisimo Nacino Jr. said Philtown’s initial high-rise condominium project One McKinley, located inside Fort Bonifacio, has just a few units remaining while its newest project, Fairways Tower, is almost sold out. RFM has around 200 hectares of still undeveloped land mostly in the provinces. RFM pioneered flour milling in 1957 and since then has grown into a highly diversified food and beverage company with products such as flour, feeds, poultry, processed and canned meat, fruit juices and snack foods.