UNIVERSITY OF CALOOCAN CITY
STRATEGIC MARKETING
RFM CORPORATION
PREPARED BY:
KIM RONNIEL S. SEVILLA
VANESSA C. FRANCISCO
ARMANDO S. BASCO JR.
JENNIFER L. RODOLFO
RODEL ZAMORA
JOHN REEVE REJUSO
SUBMITTED TO:
MR. RONALD BARRIGA
AUGUST 17 , 2017
Strategic management
Chapter 1
Introduction
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 Caesars 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.
Nature of business
is one of the biggest food and beverage companies in the Philippines (Over US$300 Mn asset-
size in 2014). It was established 58 years ago (1958) as the pioneer in the flour-milling industry in the
Asian region, and it evolved from a single company producing bags of flour, to a multi-company
enterprise managing a chain of branded products that are highly visible in the consumer market
today. RFM offers strong consumer brands known for quality and value in the Philippine market. The
company is either the market leader or a significant player in many of the food and beverage
categories in the market. Among the branded products which it markets are: White King (cake mixes
and flour-based products), Royal and Fiesta (Pasta and Sauce), Sunkist (fruit juices), Selecta (milk-
based products) and Selecta (ice cream, under the joint venture with Unilever). The company
continues to operate its flour milling business that serves the requirements of several bakeshops, and
makers of biscuits, cookies, noodles, snacks and other flour-based products. It also produces flour for
its internal requirements for pasta, flour mixes, and bread.
Major market served
RFM Corporation is one of the biggest diversified food and beverage companies in the
Philippines (Over US$250 Mn asset-size in 2007). It was established 50 years ago (1958) as the
pioneer in the flour-milling industry in the Asian region, and it evolved from a single company
producing bags of flour, to a multi-company enterprise managing a chain of branded products that are
highly visible in the consumer market today. RFM offers strong consumer brands known for quality
and value in the Philippine market. The company is either the market leader or a significant player in
many of the food and beverage categories in the market. Among the branded products which it
markets are: White King (cake mixes and flour-based products), Fiesta (Pasta and Sauce),Sunkist
(fruit juices), Selecta (milk- based products) and Selecta (ice cream, under the joint venture with
Unilever). The company also has business interest in non-food categories, which includes Philippine
Township
Number of employees
Based on the information given by RFM corporation is currently employing 6.0 ratio of people in
every business sector around the selected industry. and significantly higher than that of Number of
Employees in other industry, The Number of Employees for all stocks is over 1000% lower than the
firm.
OTHER RELEVANT INFORMATION
Address: Pioneer St, Mandaluyong, 1550 Metro Manila
Phone: (02) 631 8101
Current revenue size and profit
RFM Income Statement December 31 2016
(PHP)
Total Revenue 12698.658
Operating Revenue 12698.658
Gross Profit 5275.797
Cost of Revenue 7422.861
Operating Expenses 3827.971
Selling,General and Administr... 3844.962
General and Administrative 1084.17
Ex...
Selling and Marketing Expense 2760.792
Special Income/Charges 3.432
Impairment of Capital Assets 3.432
Other Special Charges -6.864
Interest Income/Expense,Net- 13.559
O...
Interest Income-Operating 23.411
Interest Expense-Operating 9.852
Operating Income 1486.18
Other Operating Income, Total 38.354
Dividend Income 0.065
Miscellaneous Other 38.289
Operating...
Other Non-Operating 0.00
Income/Ex...
Pretax Income 1486.18
Provision for Income Tax 485.8
Net Income Available to 1001.85
Commo...
Net Income 1001.85
Net Income Including 1000.38
Noncontr...
Net Income from Continuing 1000.38
Op...
RFM Income Statement December 31 2016
(PHP)
Minority Interest 1.47
Basic EPS 0.29
Basic EPS from Continuing 0.29
Ope...
Diluted EPS 0.29
Diluted EPS from Continuing 0.29
O...
Basic Weighted Average 3493.803604
Shares...
Diluted Weighted Average 3493.803604
Shar...
Interest and Dividend Income 23.411
Interest Expense 9.852
Net Interest Income 13.559
Net Income from Continuing 1001.85
an...
Normalized Income 999.5398463
44
Basic EPS,Continuing and 0.29
Disc...
Diluted EPS,Continuing and 0.29
Di...
Dividend Per Share 0.08
Net Income from Continuing 1001.85
Op...
Earning Before Interest Tax D... 1874.508
Cost of Revenue,Reconciled 7422.861
Depreciation,Reconciled 378.476
Earning Before Interest and T... 1496.032
TotalUnusualItems 3.432
TotalUnusualItemsExcludingGo 3.432
o...
Tax rate for calculations 0.33
Calculated Tax Effect Of Unus... 1.121846344
32
Normalized Basic EPS 0.29
Normalized Diluted EPS 0.29
MAJOR MARKET SERVED
In late 2012, RFM entered into a Trademark and Asset Purchase Agreement with The Pacific Meat
Company, Inc. (PMCI). The terms of this agreement includes RFMs sale of the Swift brand,
together with finished goods and raw material inventories, the goodwill of the business connected
with the trademarks used for its canned, pouch flexible heat sterilized, refrigerated, chilled and frozen
meat products, and certain machinery and equipment, as well as all product formulations, processes,
know-how and other technical information relating to the production of meat products
NUMBER OF EMPLOYEES
As of December 31, 2016, the company and it's subsidiaries had approximately 437 employees of
which 11 are executives, 44 managers and 111 supervisory staff and 271 were non supervisory staff.
The company does not anticipate any significant increase the number of it's employees in year 2017.
CHAPTER 2
DATA AND INFORMATION SOURCES
We decided to study the RFM CORPORATION. The information that gathered mainly came from the
internet in the different website that related in the company chosen.
http://www.rfmfoods.com/Home.aspx
http://quotes.wsj.com/PH/RFM/financials
HOW INFORMATION WAS OBTAIN & METHODOLOGIES USED
the companys website were thoroughly checked and further conclude that is where sufficient
informations were provided such as the products and services offered by the RFM CORPORATION
through the company mission and vision, company financial statement and etc. those data served as
the primary information of the research. The data collected consist of the product and services offered
in the market and other informations which are essential study.
MAJOR ASSUMPTION
This research paper will focus on the weaknesses and threats of the RFM CORPORATION, that will
shows the negative aspect of the business matter and its environment, per conclude its opportunitys
and strengths that will improve its firm decision making , enriching its techniques and systematical
decision making for the greater cause that will result in favor for the RFM CORPORATION and for
future plans that would help them in this research paper ahead.
