RFM sets aside P1.2 billion for capex

MANILA, Philippines — Food and beverage company RFM Corp. is allocating P1.2 billion  to expand the production capacities of its milk, consumer and institutional businesses.

The capital expenditure plan approved by its board of directors lays the foundation for the future growth of the company, RFM said.

“This P1.2 billion capex approval is one of the biggest set of capex since the purchase of the Royal pasta brand in 2014,” RFM CEO Jose Ma. Concepcion III said.

He said RFM plans to use its excess cash to fund the capex over the next 15 months.

“This capex is expected to support the double-digit growth of our Selecta milk offerings as well as support the growing consumer and institutional businesses that are expected to double in five years,” he said.

RFM is the maker of Selecta milk, Royal and Fiesta pasta and sauces, White King mixes as well as flour and bread.

The company is also a 50 percent owner of the Unilever RFM ice cream joint venture that sells Selecta, Cornetto and Magnum brands.

Concepcion said the company is doubling down its support for the milk and other high-growth segments that will drive the topline of RFM over the coming years.

RFM posted a 17 percent year-on-year growth in sales for the first half of the year , buoyed by ice cream, milk and institutional businesses.

Concepcion said the investment into more production capacity for milk and other high-growth segments would support RFM’s sales growth momentum, even amid current uncertainties in the global economy.

“We have been carefully passing on the cost of higher inputs and also tightening on expenses to manage our margins. Our ice cream joint venture is also continually planning expansion to meet volume growth over the long term,” Concepcion said.

“Our strategy of focusing on our core strengths and brands has yielded good topline and bottom line growth over the past years and we are deploying the extra cash that we have accumulated to further feed into that growth of our core growth drivers,” he said.

RFM’s board  also approved a cash dividend of P200 million or P0.059355 per share, with payment date set on Oct. 11 and record date of Sept. 15.

Total cash dividends declared by RFM in 2022 now total P854 million, or 65 percent of its net income last year.