RFM to raise P500M for new product development

RFM Corp., the food and beverage concern of the Concepcion family, plans to raise as much as P500 million from debt and equity this year to raise funds for the development of new products intended for the mass market and the acquisition of new manufacturing equipment.

RFM president and chief executive officer Jose Concepcion III said the company intends to develop products within the reach of the broader C-D-E socio- economic classes.

"Consumers now don’t want to take the risk of wasting money on food products that are cheap but turn out to be poorly made. They will want to make sure they get their money’s worth every time they make a purchase. That’s where RFM comes in," Concepcion said.

RFM will create new class of shares or up to 32 million in "convertible preferred class B shares," equivalent to about P304 million. The preferred B shares will be convertible to 380 million common treasury shares with a fixed dividend rate of 10 percent a year based on the offer price.

Concepcion reported that the company’s recently-launched Selecta Fortified Filled Milk, has been creating waves in the market. It is RFM’s first entry into the "serious" white milk category, even as its Selecta Moo chocolate milk has been a strong market player in the "fun" flavored milk category for years. "We found a way to formulate a good-tasting and health-giving product, put it in a high-protection aseptic package, and still price it at a level lower than the equivalent glass from powdered milk," Concepcion said.

The ready-to-drink product, targeted to meet the ordinary household’s budget for daily milk nutrition, comes in three affordable tetra-packages: 150 milliliters, 250 ml. and one liter. RFM also makes and markets Fiesta pasta and White King flour mixes, ready-to-drink Sunkist juice and tea, Swift processed and canned meats, and Selecta ice cream in joint venture with Unilever.

RFM said its net income for the first eight months of the year reached P109 million or almost three times the P109-million profit reported in the same period last year. Last year, RFM reported a net profit of P168 million. The company is also into property development.