Table 6: Fluctuations in the number of employees of Thai Duong in the period 2008-2010.
Unit: Person
Target
2008 | 2009 | 2010 | 2009/2008 | 2010/2009 | |
Total number of employees | 350 | 441 | 423 | 91 | (18) |
Number of employees increased | 114 | 134 | 76 | ||
Number of workers decreased | 61 | 43 | 94 | ||
General labor | 319 | 402 | 370 | 83 | (32) |
Skilled labor | 31 | 39 | 53 | 8 | 14 |
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Source: Thai Duong Company's administrative organization department in 2008-2010
For Thai Duong Investment and Development Joint Stock Company, the total number of employees in 2009 and 2010 increased compared to 2008, proving that the company's production scale has increased. In 2009, the number of employees increased by 91 people compared to 2008. This is explained by the fact that in 2008, the company's production stagnated, the company could not use its full capacity, so the number of employees to maintain production was only 350 people. By 2009, after a difficult period, the company's production and business situation had positive changes, the company's production capacity increased significantly, shown here that the company's direct labor force increased to 441 people. However, by 2010, the company's total number of employees decreased slightly to only 18 people. There are several reasons to explain this phenomenon: the company's growth is not large, the demand for labor is not as high as before, or the labor policy is not competitive, so it cannot attract workers.
Analyzing the increase and decrease in the number of employees over the years, we can see that in just one year, the number of employees leaving the company as well as the number of employees joining the company is a relatively large number, accounting for nearly ¼ of the total number of employees of the company. This shows the inadequacy of the company's labor policy. However, it is clear that the number of highly skilled employees of the company is increasing, which shows that the company pays great attention to training and improving the skills of employees and the number of new employees joining the company is mainly unskilled workers replacing the old unskilled workers who have left the company.
To further assess the quality of a company’s labor force, we need to relate it to the company’s production scale. First, we look at the fluctuations in the company’s average labor productivity over the years based on the following table:
Table 7: Average labor productivity fluctuations of Thai Duong in the period 2008-2010.
Target
2008 | 2009 | 2010 | 2009/2008 | 2010/2009 | |
Total number of employees | 350 | 441 | 423 | 91 | (18) |
Net revenue | 120,306 | 146,708 | 150,050 | 26,402 | 3,342 |
Average labor productivity | 343.73 | 332.67 | 354.73 | (11) | 22 |
Source: Finance and Accounting Department of Thai Duong Company
From the above table, we can see that the average labor productivity in 2009 decreased by 11 million VND compared to 2008 because the enterprise used too many low-skilled workers, so the labor efficiency was not high. In 2010, the average labor productivity of the enterprise increased significantly by 22 million VND per worker compared to 2009, which is a good sign for the enterprise. The reason is that in 2010, Thai Duong paid great attention to improving the skills of workers. Although the number of workers decreased slightly, it was mainly a decrease in unskilled workers, while the number of highly skilled workers increased, thereby improving labor efficiency throughout the enterprise.
We continue to examine the fluctuations in the salary fund as well as the factors affecting the fluctuations in the salary fund to see more clearly the ability to manage salary costs as well as the labor force of the enterprise.
Table 8: Fluctuations in number of employees and average salary at Thai Duong company in the period 2008-2010.
Target
Unit | 2008 | 2009 | 2010 | |
Total number of employees (N) | People | 350 | 441 | 423 |
Average salary (I t ) | Million Dong | 1,961 | 2,347 | 2,600 |
CFTL t | Million Dong | 8 238 | 12 420 | 13 200 |
Source: Thai Duong Company's Administrative Department
Based on the formula CFTL=N*I, we see that the enterprise's salary fund is affected by two factors: the number of employees and the average salary per employee in the year.
In 2009 compared to 2008, the impact of the number of employees on the fluctuation of salary costs was:
CFTL N = N 2009 *I 2008 – N 2008 *I 2008 = 441*1,961*12 – 350*1,961*12 = 2141,412
% CFTL N = CFTL N /CFTL 2008 = 2141,412/8238 = 25.99%
The impact of average monthly salary factor on wage cost fluctuations:
CFTL I = N 2009 *I 2009 – N 2009 *I 2008 = 423*2,600*12 – 423*2,347*12 = 2042,388
% CFTL I = CFTL I /CFTL 2008 = 2042.388/8238= 24.79%
Summary of the influence of factors:
CFTL = CFTL N + CFTL I = 2141.412 + 2042.388 = 4183.8
% CFTL = % CFTL N + % CFTL I = 25.99% + 24.79% = 50.78%
Similarly, 2010 vs. 2009:
CFTL = CFTL N + CFTL I = (506,952) + 1286,628 = 779,676
% CFTL = % CFTL N + % CFTL I = = - 4.08% + 10.36% = 6.28%
Thus, in 2009, the total salary cost of the enterprise increased quite significantly by 50.78% compared to 2008. In particular, due to the increase in the number of employees by 91 people, it contributed to an increase of 25.99% in the salary fund, the increase in the average monthly salary also affected an increase of 24.79% in the salary fund. In 2010, the salary fund of the enterprise still increased, although not significantly, only about 6.28%, although the number of employees decreased, causing the salary fund to decrease by 4.08%, but the average salary per employee increased by 0.253 million VND per person, making the salary fund increase by 10.36%. Although the salary cost of the enterprise has increased over the years, it does not mean that the enterprise does not manage and use this cost well. In 2009, due to the increase in operating capacity, it was necessary to increase the number of employees, along with that, the salary level also increased, contributing to encouraging labor. By 2010, the company continued to increase salaries, which clearly demonstrated the company's desire to retain long-term, highly skilled workers with bonuses, contributing to stabilizing the labor force.
be more proactive, avoiding letting their workers run to competitors or other industries with higher incomes.
In short, all signs such as unstable increase and decrease in the number of employees, small increase rate, low professional qualifications, low labor skills, still allowing employees to leave the company show that the company's human resource policies have not really achieved high efficiency as expected. However, the company's proactive implementation of labor skills training as well as proactive salary increase to match social requirements has shown new perspectives on the company's ability to develop labor resources in the future.
2.2. Analysis of fixed assets factors.
A small part of the machinery and equipment used for the company's production was installed in 2003 when the company first started operating. Over time, the company gradually expanded its scale and invested in many new equipment lines. The company's machinery and equipment can be divided into the following two groups:
Group of main machinery and equipment: PE bag blowing machine, BOPP laminated film blowing machine, PP packaging blowing machine, PE bag cutting machine, PP bag, PP non-woven fabric blowing and cutting machine, etc.
Group of supporting machinery and equipment: bag strap punching machine, bag sealing machine, printer, material mixer, air pump, etc.
Table 9: Fixed asset equipment indicators of Thai Duong in the period 2008-2010.
Target
Unit | Sun | HPB | STP | TTP | |||
2008 | 2009 | 2010 | 2010 | 2010 | 2010 | ||
Average fixed asset value army | Million copper | 39,080 | 34,980 | 33,280 | 21,530 | 13,079 | 111,032 |
Increase in fixed assets | Million copper | - | - | 5,600 | - | 676 | 31,078 |
Reduce fixed assets | Million copper | - | - | - | 2,989 | - | 18,113 |
Fixed Asset Growth Coefficient | Time | - | - | 0.17 | - | 0.05 | 0.28 |
Fixed Asset Reduction Coefficient | Time | - | - | - | 0.14 | - | 0.16 |
Fixed Asset Depreciation Coefficient | Time | 0.33 | 0.41 | 0.45 | 0.82 | 0.64 | 0.75 |
Source: Notes to Thai Duong's financial statements 2008-2010
Based on the above table, we can see the status of tangible fixed assets of Thai Duong Company over the years in the period 2008 - 2010. In 2008 and 2009, the company did not buy any new fixed assets but continued to use the machinery and equipment invested in previous years that the enterprise had not yet fully exploited. By 2010, the company decided to invest in an additional non-woven fabric production line, contributing to increasing the company's fixed assets by 5,600 million VND, equivalent to 0.17 times the average fixed assets in the year. This shows that since 2010, the company has increased its scale of operations as well as realized the importance of improving labor tools. The company's fixed assets are gradually being updated and modernized, producing more diverse products to meet market demand, while also increasing the competitiveness of the business compared to other businesses in the industry, forecasting the company's growth in the near future.
Compared to other companies in the industry, Thai Duong's average fixed assets are also quite high, excluding large companies like TTP. In all three years, the fixed asset reduction coefficient was zero, along with the fixed asset depreciation coefficient of Thai Duong being the lowest compared to the other three companies. This can be explained by the fact that compared to the three companies included in the comparison, Thai Duong was established the latest, and the oldest equipment was also installed in 2003, so Thai Duong's fixed assets can be considered the most modern. That is why, while the other companies continuously have to replace old, outdated fixed assets, Thai Duong can still continue to exploit existing assets. This demonstrates Thai Duong's saving policy and ability to use fixed assets reasonably. However, in the current technological era, Thai Duong needs to pay close attention to technological innovation because technology is an important factor that determines the competitive advantage of businesses.
. If not careful, Thai Duong can be left behind by other businesses in terms of technology.
Table 10: Fixed asset utilization efficiency of Thai Duong and comparison with HPB, STP, TTP
Target
Unit | Sun | HPB | STP | TTP | |||
2008 | 2009 | 2010 | 2010 | 2010 | 2010 | ||
Original price Average fixed assets | Million copper | 55,468 | 55,468 | 58,268 | 109,777 | 32,048 | 417,122 |
Net revenue | Million Dong | 120,306 | 146,708 | 150,050 | 188,710 | 192,909 | 1,334,515 |
Fixed Asset Utilization Efficiency | Time | 2.17 | 2.64 | 2.58 | 1.72 | 6.02 | 3.20 |
Source: Notes to financial statements of Thai Duong 2008-2010 and of HPB, STP, TTP in 2010.
Based on the above analysis table, we can see that in 2009, although fixed assets did not increase, Thai Duong exploited its existing fixed assets very effectively, as shown by the increase in fixed asset utilization efficiency from 2.17 times to 2.64 times. By 2010, the enterprise proactively invested in additional fixed assets with the expectation of further revenue growth, but due to the general difficulties of the economy, which negatively affected most business sectors, hindered the enterprise's revenue from increasing as expected, so the fixed asset utilization efficiency in this period decreased slightly to 2.58 times. This is a problem mainly due to objective reasons, until these difficulties pass, the enterprise can completely expect to achieve higher revenue and performance.
On the other hand, if compared with the three companies HPB, STP and TTP, the fixed asset utilization efficiency of Thai Duong in 2010 was only higher than that of HPB and lower than that of STP or TTP. The reason for this is that in 2010, both STP and TTP had significant improvements in machinery and equipment, contributing significantly to increasing revenue and improving the quality of fixed asset utilization. This further confirms the warning that Thai Duong needs to pay close attention to improving machinery and equipment.
In short, Thai Duong Company has had quite reasonable strategies in the use of labor assets in the past time, which is to maximize the capacity of machinery and equipment, and to be proactive in investing in fixed assets. Although the performance of fixed assets has not increased as expected, Thai Duong can fully expect to have positive changes in the future when the economy stabilizes.
2.3. Analysis of raw material factors.
For the packaging industry, raw materials account for a very large proportion of the total cost of producing a product. Raw materials include main raw materials and auxiliary raw materials, additives used to produce the product. Here, we only mention the main raw materials because they account for the largest part, including plastic pellets such as PE, HDPE, PP, LLDPE, coated PP pellets, bical pellets, karap vang paper, corrugated karap paper, etc. Most of these raw materials are imported from countries such as Taiwan, Singapore, Thailand and Korea. Therefore, the domestic raw material situation is greatly affected by fluctuations abroad.
Thai Duong Company is in the same situation as most other businesses in the industry. The reality is that if the company buys raw materials from domestic importers, the supply is unstable depending on the period, and the price is also high. If the company finds its own suppliers abroad, it can overcome the above disadvantages because the supply from foreign suppliers is often more stable and now signing transaction contracts and import procedures are also very easy, not as difficult as before. However, importing by itself also means that the business must accept the risks it brings, most prominent of which is the impact of exchange rates.
Raw materials of Thai Duong as well as other enterprises in the industry are mostly imported in US dollars. If in the past the US dollar was considered a fairly stable currency, since 2008, the global economic crisis, especially in large economies like the US, has caused the US dollar to gradually lose value. In the Vietnamese exchange market, the USD/VND exchange rate has fluctuated constantly and generally in an upward direction, which is considered an extremely disadvantageous thing for the company's production and business. Specifically, we can understand that the increase in exchange rate causes the cost of raw materials to increase, the cost of production
When product prices increase, businesses will try to sell products at higher prices, and that is not easy in today's fiercely competitive environment.
Another thing worth noting is that the main raw materials of the enterprise include plastic granules such as PE, HDPE, PP, ... which are all petroleum products. Therefore, fluctuations in world oil prices have a great impact on the cost of raw materials of the enterprise.
World crude oil price (FOB) USD/barrel
160
140
120
100
80
60
40
20
0
Jan 11, Jul 11, Jan 11, Jul 11,
2008 2008 2009 2009
Jan 11,
2010
Jul 11,
2010
Chart 1: Fluctuations in world crude oil prices in the period 2008-2010
Source: World Oil Price Database of the US Energy Information Administration EIA
Through observing the chart above, we can see that the fluctuations in world crude oil prices in the period 2008 - 2010 were very large. Most notably, in 2008, world oil prices reached a peak of nearly 140 USD/barrel, nearly double that at the beginning of the year and nearly 4 times that at the end of 2008. This astonishing figure shows the difficulties in business production. With such high prices, most domestic raw material importers did not dare to import, and businesses in the industry were also afraid, only daring to produce moderately, which was also a reason why the output in 2008 was lower than expected. From mid-2009 to mid-2010, world oil prices still fluctuated somewhat but were much more stable than before, contributing to stabilizing costs as well as the production situation of businesses. By the end of 2010, oil prices began to increase again, the underlying cause of which was the effects of increased reserves in oil exporting countries.