SAO VANG RUBBER JOINT STOCK COMPANY (SRC)
2.1 OVERVIEW OF SAO VANG RUBBER JOINT STOCK COMPANY
Sao Vang Rubber JSC, a subsidiary of the Vietnam National Chemical Group, was established as Sao Vang Rubber Firm under Decision No 3500/QD-BCN by the Ministry of Industry on October 24, 2005 The company completed its equitization process on April 3, 2006, and was officially renamed Sao Vang Rubber Joint Stock Company.
Sao Vang Rubber Joint Stock Company, headquartered at No 231 Nguyen Trai, Thanh Xuan District, Hanoi, Vietnam, is a reputable firm in the rubber industry For inquiries, you can reach them at Tel: 04.8583656 or Fax: 04.8583644 Their official website is www.src.com.vn, and they operate under Tax Code 0100100625 The company maintains a Vietnam account at Viettin Bank, Dong Da, Hanoi, with the account number 102010000069759, and a foreign account at Vietcombank, numbered 220-110370.569 They are registered under Business Registration Certificate No 0103011568, issued on April 3, 2006.
Vinachem's key trading sectors encompass the manufacture and sale of rubber products, as well as the import and export of equipment, materials, and chemicals essential for the rubber industry Additionally, Vinachem specializes in creating, fitting, and trading machinery and equipment tailored for the rubber sector The company also offers leasing services for stores, offices, and warehouses, while engaging in the trade, repair, and maintenance of vehicles, including cars and motorbikes, along with their spare parts Furthermore, Vinachem trades in sunglasses, optical equipment, and a variety of electrical items for personal and family use, along with providing retail spaces for buying and selling products.
Main products named SRC including: o Inner tube, tire for bikes o Inner tube, tire for motorbikes o Inner tube, tire for cares o Boot, rubber pipe o Conveyor belt to produce tire
Our production capacity for key products is impressive, with over 500,000 pairs of inner tubes and tubes for cars manufactured annually We also produce 2.5 million inner tubes and 7 million tubes for motorbikes each year Additionally, our output includes 8 million inner tubes and 10 million tubes for bicycles annually, showcasing our commitment to meeting diverse market needs.
SRC offers a range of high-quality inner tubes and tires for bicycles, motorcycles, and cars that meet international standards and are favored by consumers In response to evolving technology, SRC has successfully developed specialized tires for aircraft such as the TU-134 (930x305), IL 18, and MIG-21 (800x200), as well as tires for heavy trucks (starting from 12 tons) and other premium rubber products.
2.1.1.2 The History of Development and Company Achievements
Sao Vang Rubber Joint Stock Company, formerly known as Hanoi Sao Vang Rubber Firm, was established on May 23, 1960 It underwent a name change to Sao Vang Rubber Joint Stock Company following Decision No 645/CNN issued by the Ministry of Heavy Industry on August 27, 1992.
- On 24 th October 2005, Sao Vang Rubber Joint Stock Company is equitized according to Decision No 3500/QD-BCN by the Industry Ministry.
On April 3, 2006, the company obtained its first Business Registration Certificate with a chartered capital of VND 49,048,000,000 Subsequently, on December 7, 2006, it received its first change certificate, increasing the chartered capital to VND 80,000,000,000 The second change certificate was issued on July 27, 2007, further raising the chartered capital to VND 108,000,000,000.
- On 7 th October 2009, SRC is listed at HoSE with the open price at VND 42,000/ share
The SRC logo features a star with the capital letters "SV" enclosed in a circle, alongside the abbreviation for Sao Vang Rubber Company It is registered under Name Register Certificate No 44599, as per Decision No 5089/QD-DK issued by the National Office of Intellectual Property of Vietnam on December 24, 2002 Additionally, the Commodity Register Certificate No 44599 was updated to reflect a name and address change in accordance with Decision No 5724/QD_SHTT on June 15, 2006.
Over 50 years, SRC has identified its fame and brand Sao Vang in the domestic and international market SRC is honored medals by the Party and the State for famous products as followed:
- Golden medal- Vietnam quality award by Ministry of Science and Technology.
- VIFOTEC Creative Science and Technology Award for The flight tube Research for the Defense
- Top- Ten Commodities Good of Vietnam for 5 years
- The first for Top 5 Vietnam high standard Goods, car and spare sector
- The Famous Name Award 2007 chosen by customers
- The Intellectual Property, Inventory Register and Commercial Brand.
2.1.2 Vision and Mission of the company
2.1.2.1 Vision until 2020 of the company
Sao Vang Rubber Joint Stock Company will become a strong corporation in
2020, with the main products are the rubber inner tubes and tires.
2.1.2.2 Mission of the company in the following years
• The average annual growth rate of the industrial production value is 10%/year, the revenue is 20%/year.
• The average income of labor is estimated to increase 10%/year.
• From 2011 onward, the profit of the following years will be higher than the previous years.
• Submit to the state budget with correct amount, in time as the government policy
• Comply with the policy of environment protection and health & safety requirements.
Sao Vang Rubber Joint Stock Company operates in accordance with the Business Law enacted on November 29, 2005, by the National Assembly of the Socialist Republic of Vietnam The company is governed by its organizational structure, operational charter, and relevant regulations.
The board of management, comprising shareholders with voting rights, serves as the highest governing body of the company, convening at least once a year during the annual general meetings This board is responsible for making decisions in accordance with the Law and the company’s Charter, including the approval of annual reports and budgets for the upcoming financial year, as well as voting on the appointment and dismissal of members of the board of directors and the control division.
The Board of Directors serves as the governing body of the company, holding the ultimate authority to make decisions and enforce rights and responsibilities that exceed the scope of the management board Comprising five members, each director serves a full term of five years and is eligible for unlimited re-election The chairman is appointed by the Board of Directors.
The control division operates independently from both the Board of Directors and management, consisting of three members appointed by the Board of Management This division is empowered to review all operational aspects of the company and is responsible for reporting its findings directly to the Board of Management.
The General Management team consists of four members, including one CEO and three Deputy Chief Executive Officers The CEO is responsible for overseeing all company operations in accordance with legal regulations and the Annual Resolution.
Shareholder Meeting, the Decision of Board of Director and Corporate Charter The CEO is the legal representative of the company
- Department of Finance and Accounting: The function to solve the problems of financial accounting, currency, financial planning and annual financial statements
The Human Department plays a crucial role in advising the CEO and board on labor organization and staffing strategies to enhance business production efficiency It addresses employee-related issues, including policies, salary planning, and bonuses, while also overseeing the settlement of wages and annual bonuses.
Organization structure of SRC
Control Division Board of Director
HCM Branch Board of Management
The demand for rubber products such as tubes, tires, conveyor belts, rubber rings, and hoses is primarily driven by secondary needs, as these items are essential components in finished products like bicycles, motorcycles, and automobiles Consequently, the demand for rubber products is closely tied to the overall demand for these vehicles and machinery Furthermore, rubber products play a crucial role across various sectors of the national economy, highlighting their widespread significance and application.
- 68% rubber used in the transportation industry for production of tires of all kinds.
- 13.5% for industrial rubber for the manufacture mechanical products (belts, conveyor belts, rubber roller ).
- 9.5% rubber for the manufacture thin film products (gloves, balloons ).
- 5.5% for the manufacture rubber footwear.
- 2.5% rubber for the manufacture other rubber products (table tennis is a safe, rubber ball ).
- 1% for the manufacture rubber glue.
The macro environment plays a crucial role in influencing the rubber industry, particularly in the production and consumption of various rubber products such as tires for bicycles, motorcycles, and cars Factors such as economic conditions, technological advancements, and environmental regulations significantly impact the manufacturing processes and market demand for rubber goods Understanding these macroeconomic elements is essential for businesses involved in rubber production to adapt and thrive in a competitive landscape.
Table 2.2: Economic Growth of Vietnam over years
Over the past decade, Vietnam has experienced significant economic growth, with its total domestic product in 2010 increasing 3.2 times compared to 2000 This impressive development has had a profound impact on the entire business sector, influencing various aspects of industry dynamics and operations.
- Transportation, manufacturing and assembly automobile and motorcycle development accompanied by the demand for inner tubes and tires up.
- Increasing people's income increases the demand for tires with high quality,good design.
In 2010, Vietnam imported 95,600 motorcycles, while local manufacturers aimed to introduce approximately 800,000 units to the market, according to the Vietnam Automobile Manufacturers Association (VAMA) and the General Department of Statistics At that time, the total number of cars and motorcycles in Vietnam was around 1.3 million, contributing to a staggering nearly 30 million vehicles on the roads.
The Vietnamese market is experiencing a significant surge in demand for car and motorcycle tires, driven by the growth of various industries that require technical rubber products.
Increasing needs of customers is a good opportunity for businesses in general rubber processing, rubber company Golden Star in particular.
- Inflation tends to rise: Inflation in 2010 was 11.75%, 6.88% in 2009 and 22% in 2008.
- The increase of the exchange rate: exchange rate in 2010 increased 10.9% which adversely affected the operation of businesses, including SRC
Politics and law in Vietnam ensure social stability and security, fostering an environment conducive to business operations The country's social security and welfare systems have seen gradual improvements, enhancing the quality of life for its citizens Additionally, the legal framework is continuously evolving, creating a supportive atmosphere for businesses to thrive.
The Party and State of Vietnam always offering positive policies to promote economic development:
- The control policies for tightening public spending and monetary to stabilize the macro economy have created good environment for business operations and development.
- To reform the public administration of the Government to create a good environment for residents and businesses.
International economic integration presents firms with access to advanced technology and modern management practices, but it also intensifies competitive pressures As Vietnam engages with the WTO, it must adhere to commitments outlined in Circular 184 from the Ministry of Finance In the ASEAN region, a standard tax rate of 70% is automatically applied, effective from January 1, 2011, specifically for traders dealing with vehicles and spare parts sourced from other ASEAN countries, provided that these constitute over 40% of their imports.
- Government launched the movement "Vietnamese people use domestic commodities", Vietnamese goods are consumed at the countryside in order to expand the market for businesses in Vietnam, including SRC.
The State has implemented various policies to support the tire industry, including a local content policy aimed at enterprises involved in the production and assembly of motorbikes and cars financed by foreign direct investment (FDI) This policy establishes specific localization rates for producers and assemblers during their initial years of operation.
In our country, motorbike manufacturers, primarily foreign-invested enterprises, are significantly influenced by the rising costs associated with vehicle value, which can increase from 15-16% in the first year to 60-70% in subsequent years To mitigate these costs, companies often source tires and inner tubes locally, promoting domestic pricing and reducing production expenses This presents a strategic opportunity for SRC to implement consistent marketing policies that align with these industry trends.
The State's investment policy for the chemical industry aims to enhance the development of rubber products, particularly through tax incentives and import protection measures, such as a 50% tax on imported tires This creates opportunities for domestic enterprises like SRC to innovate and upgrade technology, improve production lines, and enhance tire quality and design while reducing production costs.
The company encounters challenges due to policies aimed at promoting public transportation in urban areas, which reduce the reliance on personal vehicles, including motorbikes, to alleviate traffic congestion If these initiatives prove effective, tire consumption in major cities such as Hanoi may decline, impacting tire companies operating in these markets.
Ho Chi Minh will be significantly reduced.
When analyzing the market shares of SRC, it is crucial to consider the cultural differences that impact business practices across various regions, including urban and rural areas, cities, and mountainous provinces Tires are essential for travel and serve as a complementary product for vehicles, leading consumers to prioritize durability and performance over design Additionally, local customs and habits significantly influence the establishment of distribution channels, labeling, packaging, and promotional strategies employed by the company.
Vietnam has 54 ethnic groups, demand is diverse and abundant This is a huge market for consumer products.
Vietnamese often promote and prefer imported goods Psychology "foreign goods consuming" is a threat to domestic enterprises.
As of April 1, 2009, Vietnam's population was approximately 85.8 million, increasing to about 86.9 million in 2010 This makes Vietnam the third most populous country in Southeast Asia, following Indonesia and the Philippines, and ranks it as the 13th most populous country globally.
As of April 1, 2009, the population of our country had risen by 9.47 million over the past decade, reflecting an average annual increase of 947,000 The annual population growth rate during the period between the 1999 and 2009 censuses was 1.2% per year, according to data from the General Statistics Office (GSO).
The lack of effective public transport development leads to higher crowd density, resulting in an increase in the number of cars, motorcycles, bicycles, and pedestrians This growing demand for mobility creates a significant opportunity for the tire manufacturing industry to thrive.