RFM Corporation

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RFM Corporation (PSE: RFM) is a publicly-listed company and a major player in the food and beverage industry in the Philippines, specifically in the processing and manufacture of flour, flour-based products, milk and juice drinks, canned and processed meats, ice cream, and bottled mineral water. Among its brands are Sunkist, Selecta, Swift, Vitwater and Moo. It also operates non-food businesses, which include barging services (Rizal Lighterage Corporation) and insurance brokerage (RFM Insurance Brokers, Inc.). As of January 25, 2011, RFM has a total market capitalization of P5.4 billion and share price of P1.69.


Company history and development

RFM Corporation was originally incorporated in 1967 as Republic Flour Mills, Inc. to manufacture flour in the Philippines despite wheat not being grown in the Philippines. Its founders include Salvador Araneta, Jose Conception, Sr., BJ Server, Albino SyCip, Zoilo Alberto, Leonardo Eugenio, Francisco Gamboa. The venture proved to be a success despite critics saying it was impossible.

The company eventually diversified into other businesses. In 1963, RFM began manufacturing cooking oil and margarine. Two years later, started manufacturing poultry and hog feeds. In the early 1971, RFM integrated forward into hog and poultry breeding. It entered into a licensing agreement with Peterson Industries and H & N Layers to breed day-old chicks. RFM however divested its interest in hog operations in 1994 and poultry business in 2003 way of property dividends to its shareholders.

In 1973, RFM established the Swift Foods, Inc. and entered into an exclusive licensing agreement with Swift and Company of Illinois to use the brand “Swift” for its canned meat processing business. It was in 1987 that RFM bought the rights for its exclusive use in the Philippines.

At the beginning of the 90s, RFM began a series of acquisition of local companies, and partnerships with foreign companies. It first acquired the Cosmos Bottling Corporation, the maker of Pop Cola brand, from the Wong Family in 1989. A year later, it acquired the Selecta brand from the Arce Family. In 1994, Swift, Selecta, and Cosmos conducted an initial public offering of its shares of stock through the Philippine Stock Exchange.

It also ventured into bakeshop business and food franchising with the acquisition of Rollin Pin trademark and, Dairy Queen and Little Caesar’s Pizza brand. Both franchises were under the Asia Food Franchsing Corporation formed by RFM in 1996.

However, despite the massive expansion RFM is undertaking, the Asian Financial Crisis put a stop on it. With a looming bond of USD83 million, RFM was forced to sell Cosmos to San Miguel Corporation. To date, among the branded food products RFM operates are Swift processed chilled and canned meats like hotdogs, vienna sausage, and corned beef, Sunkist Juices, Selecta Milk, Fiesta Pasta Noodles, White King Hot Cake, and Butterfresh Margarine.

Joint venture with Unilever, Philippines

Unilever-RFM Ice Cream Corporation is a joint venture enterprise owned 50%-50% by RFM Corporation and Unilever Philippines Inc. It is engaged in the business of manufacturing, marketing, distributing and selling, importing and exporting of ice cream and similar food products.

Non-food businesses

In 1995, the Company incorporated RFM Properties and Holdings, Inc. to consolidate its real estate assets as well as to break into the land and housing development business. The company was later renamed Philippine Townships, Inc. In 2008, the company was again renamed to Philtown Properties, Inc.

RFM’s participation in the banking sector is through its thrift bank Consumer Bank, which was sold to Philippine Bank of Communications during the Asian Financial Crisis.

Other subsidiaries

Aside from the businesses above, RFM also owns 82.98% of Rizal Lighterage Corporation, a barging company that transports food commodities like wheat, soya bean and fishmeal via barges along the Pasig River.

WS Holdings, Inc., a joint-venture between RFM and Unilever, Philippines registered in 1999 to invest in, purchase and own shares of stocks, bonds and other securities of obligations including real estate and personal property of any foreign or domestic corporation, or partnership, or association.

Corporate Social Responsibility

RFM Foundation, Inc. is the social development arm of the RFM Corporation and headed by Joey Conception, Jr. Among its notable projects are Ten Outstanding Students of the Philippines and Go Negosyo.

The Ten Outstanding Students of the Philippines desires to honor students who made excellent academic performances and their contributions to society.

Go Negosyo is the advocacy of the Philippine Center for Entrepreneurship, a non-stock, non-profit organization that advocates poverty alleviation through entrepreneurship. RFM Foundation also donated P2 million for Piso Para sa Kinabukasan headed by ABS-CBN Bayan Foundation, Inc.

Financial condition

For the first nine months of 2010, RFM Corporation posted P523.6 million in net income or 85% growth from P282.1 million for the same period last year. This income performance was attributed to the stream of successful product innovations in its branded businesses, backed by aggressive marketing campaigns. Furthermore, its assets totalled to P9.26 billion and liability only amounted to P2.5 billion.

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