But RFM president and CEO Jose Concepcion III told The STAR that the ‘loss’ phase is just a step which the company has to undergo to achieve its goal of being the leader in all its brands. "Already, our Fiesta brand (noodles) is almost number one," he said.
He recalled that when RFM was just building the Cosmos brand, it had to suffer losses for several years. "But when we sold it, we sold it at a very good price to San Miguel," he added.
Concepcion made the remarks during Tuesday night’s unveiling of RFM subsidiary Philippine Township’s (Philtown) P1.5-billion high-rise residential condominium project to be called the Metropolitan. Concepcion expects RFM to break-even this year and start making money next year as the investments in advertising and marketing start paying off.
Last year, he said RFM made about $3 million in export revenues, and this is expected to double this year. "We are definitely going to push exports this year considering that the peso is already 56 to a dollar. And we have been receiving a lot of inquiries," Concepcion said.
On the possibility of exporting chicken in the light of the big demand abroad due to the bird flu virus (the Philippines remains as the only country in the region that has not been hit), he said that this will be a two-year window and RFM is still studying it.
"The problem is there is a demand for chicken produced in the Philippines because we remain as the only source. But we are still not competitive because of the high price of corn, feeds. Unless we bring down our cost of production, this demand is not going to last," he said.
Asked whether RFM is planning on going into new products and industries, he said the group already has too many products. "We have around 250 SKUs and 10 brands. That’s too many," he stressed.
During Tuesday’s launching, Philtown president Raul Martinez told The STAR that this third high-rise condo project (after the highly successful One McKinley and Fairway Towers at Fort Bonifacio) will cost the company about P1.5 billion, which will be sourced from internally generated funds and corporate funds.
Philtown bought for P100 million a 2,000- square meter lot from the owners of Metroclub in Estrella, Makati just beside the existing sports club where a 35-story condominium will be built between 2005 and 2007.
Metroclub will redevelop the club’s sports facilities by utilizing the P100 million that will be paid by the RFM group. According to Metroclub president Francisco Buencamino, the redevelopment will benefit the 1,600 existing shareholders of the club as well as the ones who will be buying units (about 560 of them) at the Philtown project who will have playing rights or the privilege to use the club facilities by just paying the dues. "We are not going to issue new shares," Buencamino said.
The club will be redeveloped for one year starting in April. "We want the club developed first so that the condo buyers will get to enjoy it," Martinez added.
Martinez said that units will be sold for around P73,000 per square meter compared to P92,000 per sq.m. in the adjoining areas. This means that a 40 sq.m. unit will sell for around P2.7 million. "We are focusing on the reasonable luxury market," he said.
Concepcion for his part told The STAR that they are looking at building condos that people can practically aspire for because they are affordable and still get the same quality as the more expensive ones.