RFM plans to acquire food, beverage firms

MANILA, Philippines -  RFM Corp. is on the lookout for other food and beverage companies it can buy to grow its business.

“We’re still looking for potential acquisitions,” RFM president and CEO Jose Concepcion III said during the company’s annual stockholders’ meeting Tuesday.

In an interview after the meeting, Concepcion said the company is looking to acquire businesses in the pasta, sauce and milk businesses.

“We’re looking at those areas that are not very competitive. Health drinks are very difficult,” Concepcion said.

“Nobody is selling anything anymore. We keep looking but everybody wants to list their company in the stock market,” he added.

He said the company is setting aside roughly P400 million for its budgetary requirements this year.

Last year, RFM achieved its target of hitting P1 billion in net income.

Concepcion said business is doing well and is optimistic growth would be sustained.

Last year’s P1 billion income reflected an increase of 11 percent over the 2015 profit, which was achieved on the back of P12.7 billion in sales revenues.

Revenue was up six percent over the previous year.

For ice cream, the company’s Selecta sustained double-digit growth rates supported by intensive selling, marketing and distribution as well as continuing product innovations.

On the other hand, the 11 percent revenue growth of branded businesses was tempered by the six percent drop in institutional sales as flour prices remained soft.

Nevertheless, the company continues to pursue a 50 percent dividend policy, Concepcion said.

Early this year, RFM declared P300 million in cash dividends to shareholders and is looking to declare the next tranche of dividends in the second half of the year.

Incorporated in 1957 as Republic Flour Mills Inc., the company today is a branded food and beverage company known for nurturing and growing heritage local brands like Pop Cola and Sarsi, under its previous subsidiary Cosmos Bottling Corp., and Selecta ice cream, now under the joint venture with Unilever.

RFM is also known for its major brands like White King Fiesta, Selecta Milk, Sunkist and Swift, which are major brand players in the industry.