Chapter 1

The Republic Flour Mill (RFM) Corporation

Introduction

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), Swift (meat based products), 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 (property development),
RFM Insurance and Brokerage Inc. (industrial and consumer insurance) and Rizal Lighterage Corp.
(integrated cargo-handling services).

Over the years, various partnerships, acquisitions and licensing agreements have boosted RFM's strong
market presence and successful brand building efforts. Among its past acquisitions were the Cosmos
Bottling Corp., Selecta Dairy Phil., Inc. which have grown to be major brands in the country. RFM also
has partnership with Unilever Philippines Inc. on the Selecta ice cream operations, and a brand
franchising arrangement with Sunkist Growers of USA, Inc.

The solid partnerships that it has built, together with its commitment to produce more value for the
consumer's money, contributed much to making RFM world-class Filipino food conglomerate. It is
expected to gain even more consumer patronage as it continues to give the Filipino consumer the
option to buy world-class products at affordable prices. Value for money is the same commitment it
upholds in entering the highly competitive and dynamic world market.

Product excellence, aggressive marketing, keen management and good governance are the driving
forces that steer RFM's recognized success.

History
Its founders included Salvador Z. Araneta, José N. Concepcion, Sr., B.J. Server, Albino Z. SyCip,
Zoilo Alberto, Francisco D. Gamboa, Edward Miller Grimm, Leonardo Eugenio, David SyCip
and Charles “Chick” Parsons. In 1973, RFM entered into an exclusive licensing agreement with Swift
& Company to use the brand “Swift” for its meat processing business (in 1987, RFM purchased
ownership rights for its exclusive use in the Philippines). For the next 15 years, RFM concentrated
on growing its established core businesses and also introduced other grocery products, such as
cake mixes, hotcake mixes, and ingredient mixes.
As it entered the 1990s, RFM began acquiring of a number of local companies and established
partnerships with foreign companies.
In 1994, RFM divested its interest in hog operations and the poultry operations became known as
Swift Foods Inc. (SFI). In 1995, RFM Properties and Holdings, Inc. was established to consolidate
RFM’s real estate assets as well as break into the property development business.
Between 1995 and 2000, RFM briefly ventured into noodle manufacturing, tuna processing,
bakeshop business with the acquisition of the Rolling Pin trademark, food franchising (Little Caesars
Pizza and Dairy Queen) and thrift banking (Consumer Bank).
In 1999, RFM formed a partnership with Unilever to produce and market its Selecta ice cream under
the joint-venture company, Selecta Walls Inc., (now, Unilever-RFM Ice Cream Inc.).
In 2001, RFM sold its soft drink subsidiary Cosmos Bottling Corporation to Coca-Cola Bottlers
Philippines, Inc. (now known as Coca-Cola Beverages Philippines, Inc.).[3][4] Cosmos continued to be
listed in the Philippine Stock Exchange until 2013.[5]
In 2003, RFM spun off Swift Foods Inc., which formerly operated RFM's Swift poultry business, to
become a separately owned company.[6]
By the end of the first decade of the 2000s, RFM significantly reduced its holdings in Philtown
Properties, Inc. after 66% of the outstanding shares were declared as property dividends in 2008
and 15% in 2009.
In November 2012, RFM sold its Swift processed meat business to the Pacific Meat Company
Inc. (PMCI). RFM said the transaction's total value can reach between P800 million and P850
million.[9][10][11][12][13]
In January 2014, RFM acquired the Royal pasta brand from Unilever Philippines Inc. for $47.8
million (around P2.1 billion). The acquisition of the Royal pasta brand will allow the company to
solidify its market leadership in the pasta category in the country. RFM's Fiesta brand is currently the
top pasta brand in the Philippines, while the Royal brand is second.

Company Profile

RFM Corporation (RFM) was incorporated on August 16, 1957 as Republic Flour Mills, Inc. to
manufacture flour in the Philippines. From its original business of flour milling, the Company diversified
into poultry and livestock production and areas of food manufacturing that includes flour-based
products, margarine, milk & juices, canned and processed meat, ice cream, and bottled mineral water.
RFM also operates non-food businesses, which include barging services and leasing of commercial/office
spaces that serve the internal requirement of the various operating divisions.

RFM operates two business segments namely, institutional segment, which primarily manufactures and
sells flour, bakery and other bakery products to institutional customers; and consumer segment, which
manufactures and sells ice cream, milk and juices, pasta products and flour- and rice-based mixes. The
Company is known for the following brands: "White King All-Purpose Flour"; "Fiesta Spaghetti", "Selecta
Moo"; "Sunkist Orange Pulp"; "Vitwater"; "Selecta Magnum"; "Selecta Cornetto"; "Selecta Paddle Pop";
and "Royal Spaghetti".

Under the food business, RFM has four subsidiaries namely, Interbake Commissary Corporation; RFM
Foods Philippines Corporation; Southstar Bottled Water Company, Inc.; and FWBC Holdings, Inc.; and
two joint venture firms named Unilever RFM Ice Cream, Inc. and Engrain-RFM Pacific, Inc. Under the
non-food business, the Company has six subsidiaries namely, RFM Equities, Inc.; Rizal Lighterage
Corporation; Cabuyao Logistics and Industrial Center, Inc.; WS Holdings, Inc.; Selecta Wall's Land
Corporation; and Invest Asia Corporation.

Company Vision

To be the Philippine market leader in affordable-quality food and beverage products.

Company Mission

To produce and market better value branded food and beverage products for the greater mass of
Filipino consumers everywhere in the country.

Company Commitment

Commitment to quality in all the products we make available. Commitment to innovate our products in
ways that will make our children healthier and happier. Commitment to give our children the best we
can, because.
Organizational Structure
Corporate Social Responsibility

RFM Foundation Inc. is the social development arm of the company. Among its notable projects are the
Ten Outstanding Students of the Philippines and Project Pagsulong.

The Ten Outstanding Students of the Philippines seeks to honor students who made excellent academic
performances and their contributions to society.

Project Pagsulong invites young Filipinos form a team and come up with innovative business ideas good
enough to stand against proposals from other teams, as well as viable enough to provide real-life
solutions for alleviating poverty.

Chapter 2

industrial Production Process

Raw Materials

After harvesting, wheat is transported to on-farm storage facilities or directly to elevators. Most modern
elevators are equipped for receiving grain from farm trucks and cleaning, drying and preparing it for
shipment by sea, rail or truck to export ports or domestic flour mills. The flour milling industry is the
main consumer of wheat and rye because these grains are the key cereals used for bread production.
Maize, oat, barley and rice are used in flour production in significantly lesser quantities. Wheat flour –
the most important product of wheat milling – is used in the baking and confectionary industries and for
home cooking.
The Process Flow

Figure: The process of milling wheat into flour

At the flour mill, the wheat is always cleaned. Cleaning involves using magnetic separators (to remove
iron particles), vibrating separators (to remove straw and dirt), aspirators (to remove dust) and de-
stoners (to remove stones). Disc separators are used later in the process for separating the various sizes
of wheat kernels. Wheat conditioning and tempering (moisturizing) finalize wheat preparation for
milling. Moisture is added to toughen the bran and to facilitate easy separation of kernel parts.
Tempered wheat is stored for about 8–20 hours, depending on the type of wheat, whether soft, medium
or hard. Blending of different wheat types and qualities can be done at this stage to achieve a specific
flour quality. The wheat is then milled in roller mills. The modern mills use the process of gradual
reduction of the wheat kernels with the goal to obtain middlings (coarse particles of endosperm). The
middlings are then separated from the bran by sieves and returned to the appropriate rollers until the
desired flour is obtained. Proper adjustment and settings of the rolls ensure maximum output of high-
quality flour. Grinding that is too hard will result in bran particles getting into the flour, while grinding
that is too light will result in the waste of endosperm. From the rolls, the milled products are sent by
pneumatic systems to rotating box-type sifters. The sifters separate the larger particles from the smaller
particles. Larger particles are shaken off at the top, leaving the finer flour particles to sift to the bottom.
This process may be repeated several times. The following table summarizes the output coefficients of
the main products received from wheat milling (measured as percentage of wheat that arrives at the
mill). These coefficients largely depend on wheat quality, type of equipment, technological processes
used and the experience of the flour mill staff.

Production Output

The approximate cost-price breakdown of flour production is as follows: the cost of grain accounts for
approximately 81% of the total cost of flour, followed by electricity cost (6.5%), labour cost (4%), and
expendable materials and other costs (8.5%), according to the International Association of Operative
Millers.

Like the grain trade, wheat milling is also a thin margin business. On the one hand, wheat millers depend
to a great extent on wheat markets that determine the cost of the raw material. On the other hand, they
depend on the preferences and willingness to pay of their consumers – bakeries, the confectionary
industry, restaurants and other users of flour – for the flour they produce. 27 The ability of wheat millers
to hedge the price risks is often limited due to the lack of grain futures markets or poor contract
enforcement in the spot grain and flour markets in the transition countries. Millers in the private sector
in many countries may be subject to government regulation as flour and bread are considered to be
socially important food products. In this case, governments may regulate the wheat milling business
through administrative price fixing, establishment of maximum margins or provision of input subsidies.
Depending on the output ratios, wheat flour may contribute 93% to the gross margin generated in
wheat milling, while wheat bran may contribute 7% (Figure 6). These contribution ratios change
depending on flour and feed demand and prices.

Pictorials
Chapter 3

Finance, Sales, and Marketing

Market

RFM Corporation's mission is to produce and market better value branded food and beverage products
for the greater mass of Filipino consumers everywhere in the country. In order to attain its mission
through its predetermined objectives and goals, the RFM Corporation innovates and developed their
products. First, RFM Corporation consider on how to increase its sales of existing products to existing
markets (market penetration). They distributed their products not only in the supermarkets, but also in
convenience store like, 7-11 Stores, Mini Stop, and the like. Consumers can access easily to RFM
products anytime to the nearest 24-hour stop shop. They also promote their products through TV
Commercials. They hire Judy Ann Santos, Sarah Geronimo, Vhong Navarro, Carmina Villaroel and Zoren
Legaspi for their Selecta Ice Cream brands which captivated the attention of the mass people and
continue purchasing the said product. RFM Corporation also released its new product line, the Vitwater,
which endorsed by people's champ, Manny Pacquiao. They also capture the kids through promoting its
Selecta Moo site, which engaged to different kinds of games which kids would love.

RFM management also consider on how to develop its existing products to new markets (market
development). Selecta Ice Cream created a Premium Line of Selecta ice cream which is low-fat and best
for consumers who is diet-conscious. They also offer different flavors for various ages, kids, teens and
adults. Swift Brands enter its new market, the Muslim community. Only Swift offers a wide variety of all-
time favorite canned and processed meat products with Halal Certified which means those products that
do not contain any prohibited substance, and have been prepared and processed in accordance with
strict standards for purity, nutrition and quality in the Muslim community. Swift formulate Rica Protina
hotdogs with lower price for the budget-concerned consumers. Swift canned goods also offer a Premium
brand of corned beef and luncheon meat for the consumers who like imported but can avail in
affordable price.

Offering modified or new products to current market segments (product development) is the third
consider of RFM. Sunkist brands now offer Hi-Juice with three times daily supply of Vitamin C. They also
offer Sunkist Healthy Heart, which reduce cholesterol and god for the heart. Selecta Moo also
introduced Selecta Moo Rocky Road, it's not just a simple choc drink but with a premium flavor of
mallows, nuts, and chocolate. Selecta Ice Cream brand modified its 3-in-1 Ice cream with free mini Nips,
which kids would love. They also developed their ice cream by adding coco milk to its newest, Pinoy
Sorbetes line endorsed by Michael V.

Starting up a new product to the new markets (diversification) is the fourth consideration. RFM take the
pride in helping Filipino farmers. They release a vegetable-enriched pancit canton noodles made from
real squash. Selecta Ice Cream, newest Sorbetes with coco milk, collaborated with Mang Inasal which
they offer a 3-scopped ice cream or a halo-halo topped with Pinoy Sorbetes. New Alo Youth is also
offered to its target market, the youth, endorsed by Chris Tiu.

Product excellence, aggressive marketing, keen management and good governance are the driving
forces that steer RFM's recognized success.
Appendix

CURRICULUM VITAE

REY NIÑO A. GARCIA

Poblacion, Talibon, Bohol

garciareynio@gmail.com

PERSONAL BACKGROUND

Age : 21

Gender : Male

Birth date : January 17, 1998

Birthplace : Poblacion,Talibon,Bohol

Religion: Roman Catholic

Civil Status: Single

EDUCATIONAL BACKGROUND

Elementary : Talibon Central Elementary School

Secondary : San Jose National High School

Tertiary : Cebu Technological University- Main Campus

 Organization :   DOST SA CTU, DOST SA CEBU, JPSME

CURRICULUM VITAE

ROMEO G. PEREZ JR.

Poblacion, Vallehermoso, Negros Oriental

romeojbperez@gmail.com

PERSONAL BACKGROUND

Age : 20

Gender : Male

Birth date : October 17,1998

Birthplace : Vallehermoso, Negros Oriental

Religion: Protestant

Civil Status: Single

EDUCATIONAL BACKGROUND

Elementary : Vallehermoso Central Elementary School

Secondary : Vallehermoso National School

Tertiary : Cebu Technological University- Main Campus

Organization : DOST SA CTU, DOST SA CEBU, JPSME