CHAPTER I: THEORITICAL FOUNDATION ON BUSINESS STRATEGY
2.1.7 Production and Sales results of MEKOPHAR over recent 3 years
Table 2.1: Consumption and sales Output of some product groups over the years
Items Unit Year2007 Year2008 Year2009
Injections 1.000 phial 7.362 5.821 6.647
Infusions 1.000bottle 3.692 2.768 5.330
Tablet 1.000tablet 1.728.068 1.881.251 1.826.700
‘Com” (is being highly
appreciated in the market) 1.000pack 41.625 41.858 49.904
Liquid Mixture 1.000bottle 1.866 1.871 1.257
Ointment 1.000tube 3.415 3.999 6.044
Raw-materials for
Antibiotics 1.000kg 95 101.000 64.000
Raw-materials
pharmaceutical Chemistry 1.000kg 26 18.0000 31.000
Source: Mekophar Chemical Pharmaceutical JSC.
b. Turnover of each product group over the years: (Table 2.2)
Table 2.2: Turnover of each product group over the years
Unit: Million Vietnam Dong
Items Year2007 Year2008 Year2009
Value Proportion Value Proportion Value Proportion
Injections 18.984 3,48% 27.701 4,65% 38.330 5,93%
Infusions 24.074 4,41% 17.666 2,96% 34.371 5,31%
Tablet 366.041 67,10% 398.322 66,83% 412.287 63,74%
‘Com” (is being highly appreciated in the market)
48.945 8,97% 48.613 8,16% 66.937 10,35%
Liquid Mixture 10.274 1,88% 13.420 2,25% 5.202 0,80%
Ointment 7.688 1,41% 9.100 0,53% 15.298 2,37%
Raw-materials for
Antibiotics 57.036 10,46% 66.700 11,19% 33.580 5.19%
Raw-materials pharmaceutical Chemistry
1.386 0,25% 1.339 0,22% 2.299 0,36%
Other Revenues (*) 11.059 2,03% 13.167 2,21% 38.541 5,96%
545.487 100,00% 596.028 100,00% 646.845 100,00%
Source: Mekophar Chemical Pharmaceutical JSC (*) Other revenues of our company are from materials, packages sold to other enterprises, leasing factories, offices and stem cell bank. Those revenues are insignificant and not regular.
c. Revenue of each product group over the years
Table 2.3: Revenue of each product group over the years
Unit: Million Vietnam Dong
Items Year2007 Year2008 Year2009
Value Proportion Value Proportion Value Proportion
Injections 2.096 2,46% 3.138 3,91% 4.942 6,11%
Infusions (664) -0,78% (1.131) -1,41% 654 0,81%
Tablet 52.170 61,13% 52.150 65,04% 57.83
0 71,47%
‘Com” (is being highly
appreciated in the market) 11.707 13,72% 10.545 13,15% 16.83
0 20,80%
Liquid Mixture 2.512 2.94% 1.946 2,43% 443 0,55%
Ointment 772.00
0 0,90% 1.114 1,39% 287 0,35%
Raw-materials for
Antibiotics 11.431 13,39% 9.011 11,24% -298 -0,37%
Raw-materials
pharmaceutical Chemistry 112.00
0 0,13% 41.000 0,05% 396 0,49%
Other Revenues (*) 5.203 6,10% 3.369 4,20% -166 -0,21%
85.339 100,00% 80.183 100,00% 80.918 100,00%
Source: Mekophar Chemical Pharmaceutical JSC (*) Comment: Total revenues before tax of 2009 is 80.918.143.384 VND representing an increase of 743.724.078 VND from 2008. This can be considered as an achievement for our company since a lot of other pharmaceutical companies are deleteriously affected by economic crisis. Despite unfavorable economic situation, our company still operated stably and maintained high compound interest rate. The inflation rate in 2009 increased significantly which resulted in the increase of input and labor costs. However, the increase in expenses of our company stayed relative with inflation rate in 2009. This is because MEKOPHAR imposed tight control over input costs:
d. Export quota
From 2007 to 2009, average annual export revenue made up 17% of total revenues.
Export quota in 2009 reached 100 billion VND while other companies experienced effects of economic depression. Some of traditional export markets are Laos, Cambodia, Myanmar, Malaysia, Congo, Nigeria, etc.
Table 2.4: Results of production and business of years 2007, 2008 and 2009
Unit: Thousand Vietnam Dong
TARGET Year 2007 Year 2008
Proportion of 2007 and 2008
(%)
Year 2009 Proportion of 2008 and 2009 (%) Total asset 385.752.965 401.476.172 4,08% 447.382.505 11.43%
Net sales 545.487.429 596.028.175 9,27% 646.844.920 8.53%
Profits 83.407.161 78.227.701 -6,21% 79.942.308 2.19%
Financial Revenue 1.305.311 3.278.942 151,20% 4.966.297 51.46%
Other profits 1.932.003 1.955.718 1,23% 975.835 -50.10%
Revenue before tax 85.339.164 80.183.419 -6,04% 80.918.143 0.92%
Taxable Income 85.339.164 80.183.419 -6,04% 80.918.143 0.92%
CIT 22.555.007 18.520.201 -17,89% 19.727.457 6.52%
Revenue after tax 62.784.157 61.663.218 -1,79% 61.190.687 -0.77%
Earnings per share 7.854 7.267 -7,47% 6.753 -7.07%
Dividend Rate 20% 30% 50,00% 30% 0.00%
Source: Audit Report of years 2007, 2008 and 2009 (*) Dividends from An Sinh Hospital in 2008 and 2009 were 1.054.368.322 and 1.676.000.000 VND respectively. Until 31th December 2009, Mekophar owned 22% of 38.1 billion VND chartered capital of An Sinh Hospital.
In spite of many fluctuations in the economy, MEKOPHAR achieved positive results:
- Net Sales was 646,8 billion VND representing an 8,53% increase from 2008 - Profit before tax was 80,9 billion VND representing an 0.92% increase from 2008 - Profit after tax was 61.2 billion VND, completed 108.93% plan of 2009.
(*) Comment:
- Total assets on 31st December 2009 were 447.382.505.024 VND, representing an 11.43% increase from those of 31st December 2008. The most remarkable one was an increase in fixed intangible assets and cash item in Balance Sheet (Appendix 5: Balance Sheet and Financial Ratios). Liquidity rate remained high as the company had high volume of cash and didn’t use loan. This fact demonstrated our company’s financial independence and sustainable development. According to audited financial report on 31st December 2009, profit after tax was 61 billion VND, completed 108.93% plan of 2009.
- If our company keeps the same pace of development and macroeconomic situations are stable, the use of “financial leverage” will become more effective, contributing to the increase in total revenues and profits from expansion activities.
2.2 Internal Environment Analysis of MEKOPHAR 2.2.1 Management Model
MEKOPHAR Chemical pharmaceutical JSC follows the model below:
- Shareholders’ Committee: Shareholders’ committee is the bodies with utmost decision right. Our shareholders have voting right. Shareholders’ meeting is held at least once a year.
- Board of trustee: MEKOPHAR has 8 members; maximum term of each member is 5 years. Head of Board of Trustee is the legal representative of the company.
- Controlling Department: includes 3 members, term is 5 years. Controlling board is independent of Shareholders’ Committee and Board of Directors.
- Board of Directors: includes 1 General Director and 2 Vice General Directors (Vice General Director of Production and Vice General Director of Administration)
2.2.1.2 Human Resources
Number of staff is stable over years and according to the Human Resources Department, structure of staff in education group is as follows: Total number of staff is 823 people of which 5 people (0.61%) have graduate degrees, 137 people (16.65%) finished undergraduate studies, 155 people (18.83%) have college diploma, 526 people (63.19%) completed high school education and basic courses about production. Our Research and Development division has 12 people with Pharmaceutical Undergraduate Degree or higher and pharmaceutical specialist collaborators.
In contrast with Economics, Pharmacy industry doesn’t many staff has pharmaceutical undergraduate degrees. However, the percentage of pharmaceutical undergraduate degree holders is relatively high. This percentage will change due to the change in educational plan of Ministry of Education and Training. (Appendix 4: Labor Structure from 2007 to 2009)
Policies to workers:
a. Working conditions:
Number of working hours: 9 hours/ per day, 5 days / per week. Workers rotate in 2 shifts/ day. With some specialist units, there are 3 shifts/ per day. When there is any sudden requirement about production or sales, staff will be required to work extra hour.
b. Recruitment and training policies:
Our company gives careful attention to staff training, cultivation, especially GMP skills, management skills for management staff, expert skills, professional skills for workers and staff in the factories. Training process includes training and retraining meeting requirements of GMP factories. Training process also has sum-up and overview to assess and to propose next course of trainings, measure effectiveness of the means and methods for improvement. Our company has implemented the effectiveness assessment system and started to educate staff about organizational culture. Moreover, Mekophar is concerned about training professional skills for employees; retain excellent people, sending staff back to schools for higher studies (company covers tuition fees). Our company gives opportunities in terms of time and working environment for employees to develop. Our company realizes that the most valuable asset is stable and qualified staff. Strong staff will help the company to accomplish its mission “Take care of people’s health” with the motto “Always for your health”.
c. Remuneration, welfare and insurance policies:
The company design suitable remuneration policy depending on the characteristics of jobs. The policy ensures the right of workers according to the law. What is more, upon the sales, our company will offer rewards to staff, group of staff with contribution to business activities by giving 1 month to 4 month salary bonuses in the end of the year.
It’s our company tradition to organize domestic as well as abroad holiday trips depending on the achievements and positions. Maintaining diverse extracurricular activities is our unique cultural trait. Monthly average salary in 2009 is 5.100.00 VND/per worker/per month. Our company monthly average salary is higher than other companies in the same business field.
Brain drainage in Pharmacy Industry has become a major concern for a great number of Pharmaceutical companies in Vietnam. It poses a big challenge for training and retaining activities. Nevertheless, Mekophar always demonstrates steadiness with appropriate human resources policies. With the above analysis, it’s easy to realize the effectiveness of human resources management of MEKOPHAR.