August 18, 2010

Philippine food and beverage conglomerate RFM Corporation is allotting at least PHP1 billion (US$22.13 million) for its expansion and working capital requirements next year.

In a statement, RFM president and chief executive officer Jose A. Concepcion III said the group's capital expenditure programme will focus on capacity expansion and line efficiencies to meet the growing demand for its products.

The expansion is in line with its strategy to boost revenues and operating margins, he added.

RFM earlier disclosed that its net earnings in the first half of the year jumped 193 percent to PHP395 million (US$8.74 million) as sales increased 10.2 percent to PHP4.2 billion (US$92.96 million). The growth was attributed to successful product innovations in the branded business coupled with aggressive marketing campaigns.

RFM said it is optimistic it would exceed its full year income target of PHP480 million (US$10.62 million) given its impressive performance.

The group's ice cream unit Selecta, a joint venture with global food and personal care giant Unilever, registered a 50 growth in sales, boosting its market share to 68 percent while its main competitors reported a decline in their market share to 20 percent and seven percent as of May.

Another RFM product, Fiesta spaghetti, also performed well, taking a dominant position due to its value-for-money proposition to consumers as well as the improved performance of its Selecta milk and Swift meat groups.

The company approved a regular cash dividend policy, allotting 30 percent of its recurring net income beginning 2010 for annual distribution to its shareholders.