Company name: Nam Kim Steel Joint Stock Company HOSE: NKG Company Abbreviation: NAKISCOHeadquarters: D2 street, Dong An 2 Industrial Park, Thu Dau Mot city, Binh Duong Province, Vietnam
Basic information of the company
Company name: Nam Kim Steel Joint Stock Company (HOSE: NKG) Company Abbreviation: NAKISCO
Headquarters: D2 street, Dong An 2 Industrial Park, Thu Dau Mot city, Binh
Founded in 2002, Nam Kim Steel JSC is a premier manufacturer of galvanized steel sheets in Vietnam, recognized for its commitment to technological innovation and high-quality standards The company’s products are widely trusted across the country and are exported to over 50 countries globally.
Nam Kim utilizes cutting-edge technology from leading global steel industry corporations, including SMS from Germany and Drever from Belgium The company sources its steel materials from renowned firms such as Nippon Steel (Japan), Hyundai Steel (Korea), CSC (Taiwan), and Formosa (Vietnam) Additionally, Nam Kim has invested in entirely new coil processing lines at its Nam Kim 2 Steel Factory, featuring the latest technology from developed nations This strategic initiative aims to address the growing and diverse demands of the market.
The Nam Kim coil processing line ensures high-precision steel cutting, adhering to rigorous quality control at every production stage As a result, Nam Kim meets the world's most demanding quality standards, including JIS (Japan), AS (Australia), ASTM (USA), EN (Europe), ISO 9001, and ISO 14001.
Establishment and development process
Nam Kim Steel JSC, established on December 23, 2002, by the Binh Duong Department of Planning and Investment, is headquartered in Binh Duong Province, covering over 43,000 square meters The company specializes in the production and distribution of cold steel sheets, including 55% aluminum zinc alloy coated steel sheets, galvanized steel sheets, color coated steel sheets, and various industrial steel products Nam Kim's offerings cater to sectors such as industrial and civil construction, handicraft industries, interior decoration, electromechanical manufacturing, precision mechanics, and metal stamping.
Nam Kim Steel Joint Stock Company, listed on the Ho Chi Minh Stock Exchange under the stock code NKG since 2011, began operations at its first factory in 2012 in Dong An 2 industrial park, Binh Duong province, covering over 65,000 square meters The factory features a closed production process with six production lines, including pickling, cold rolling, thick galvanizing, cold galvanizing, and color plating, achieving a total capacity exceeding 350,000 tons per year, which significantly enhances the company's competitive edge for long-term growth In 2016, the company expanded its operations with the launch of a second factory in Vinh Loc 2 industrial park, Long An province, increasing the total production capacity to 1 million tons per year.
With two decades of growth and development, Nam Kim Steel has established its presence in households, high-rise construction projects, and workshops across Vietnam Recognized as one of the top 500 largest enterprises in the country (VNR 500), Nam Kim Steel JSC is a leading player in the galvanized steel sheet market.
Nam Kim’s main product lines
PRE-PAINTED ALUMINUM-ZINC ALLOY COATED STEEL SHEET INCOIL AZ100/ AZ150/ PVDF
Pre-painted zinc-aluminum alloy galvanized steel produced by NAM
KIM STEEL features advanced paint layers that provide exceptional color retention and outstanding corrosion resistance for zinc-aluminum alloy base steel This product is produced using cutting-edge technology from SMS, ensuring high quality and durability.
Serving as flat, waved roofing steel plates, Seamlock roofing plates, Kliplock roofing plates, wall steel plates, eave gutters, accessories and other construction applications.
GALVANIZED STEEL SHEET IN COIL
Hot-dip zinc galvanized steel consists of steel sheets in coil that are coated with two layers of 99% pure zinc This process utilizes continuous hot-dip technology and NOF furnace temperature control to ensure optimal mechanical properties for various applications.
Serving as deck floor, HVAC pipes, steel purlins, details in household electrical products, interior decoration products, other construction products.
ALUMINUM-ZINC ALLOY COATED STEEL SHEET IN COIL
Zinc-aluminum alloy galvanized steel, featuring a coating of 55% aluminum, 43.5% zinc, and 1.5% silicon, is produced using advanced continuous hot-dip technology This process ensures optimal mechanical properties, making it ideal for various applications such as deck flooring, HVAC pipes, steel purlins, and components in household electrical and interior decoration products.
Vision, mission and core values
Vision
Nam Kim steel products are recognized by domestic and international customers in the high quality segment.
Mission
Nam Kim Steel is committed to "continuous improvement and innovation in all business activities," ensuring high-quality products, attentive customer care, and competitive pricing The company focuses on enhancing its financial strength and competitiveness while innovating its management practices and business model By improving product quality to meet international standards, Nam Kim Steel aims to satisfy the growing demands of both domestic and international markets, maintaining its position among the top three in the galvanized steel sheet industry nationwide.
Core values
Nam Kim Steel embodies a culture of continuous quality improvement across all operations and departments The company prioritizes investment in modern technology, establishes a scientific management system, and implements human resource training programs to uphold and enhance its core values.
Nam Kim Steel prioritizes a culture of continuous learning and training to enhance the skills of its staff, fostering trust and long-term commitment between employees and the company Employees are provided with diverse learning opportunities, including integration training, on-the-job training, professional development, and management training Experienced leaders pass their knowledge to the younger generation, ensuring a legacy of skilled human resources The company also facilitates employee participation in prestigious domestic and international seminars and sends them to learn from major corporations worldwide.
Every team member at our company embodies innovation and accountability, actively seeking to implement new ideas that enhance work efficiency and quality Our employees are committed to adhering to established standards and processes across production, business, and organizational practices We lead in identifying trends and developing products that meet international quality standards, characterized by high aesthetics and exceptional sales and after-sales service.
Organization structure
Nam Kim’s organizational chart can be seen as follows:
Figure 1: Nam Kim’s Functional Organization
(Source: Nam Kim Steel’s Annual Report)
This report focuses on analyzing the production, marketing and logistics segments of Nam Kim Steel JSC Below are the functions and duties of the departments related to these segments:
Functions of the Production Department:
- Receiving orders from the sales department, analyzing data, planning,scheduling production.
- Estimating production time and budget; ensuring the production of goods on time and on budget.
- Planning on demand, coordination, rotation of equipment and materials
- Managing productions; detecting, evaluating, and fixing product defects
Functions of Supply chain planning Department:
- Maintaining and updating the orders
- Supplier selection and price negotiation
- Managing contracts and building relationships with material suppliers
- Supply management with the goal of improving delivery quality and performance
- Supply management with the goal of improving delivery quality and performance
- Controlling stock to manage production schedules; ensuring adequate stock is in line with requirements
- Managing orders and supporting customers
- Collecting and synthesizing information in the country where the company plans to export (Economic geography, law, investment policy, import and export tax, etc.)
- Researching, determining the needs and consumption behavior of the local population (type of roofing, color, size, thickness, wave pattern, appropriate price, etc.)
- Participating in international buiding and construction trade shows, establishing good relationships with foreign partners, customers, trading companies and agencies related to export work.
- Drafting export contracts, negotiating with customers on contract terms (types of goods, prices, quality, quantity, payment methods, delivery methods, document requirements, etc.) and submit the export contract.
- Monitoring and reminding customers to make payment commitments on contract.
Overview of the business situation of Nam Kim Steel JSC in the
Regarding the business situation, Nam Kim has experienced impressive growth over the 3-year period from 2019 to 2021.
(Source: Nam Kim Steel’s Annual Report)
In 2020, the importing revenue declined to VND 11,559 billion, marking a 5% decrease from 2019 Despite this drop, the company's profit surged to 295 billion VND, reflecting a remarkable year-on-year increase of 624%, driven by a significant rise in HRC steel prices.
In 2021, Nam Kim achieved a remarkable net revenue of 28,173 billion VND, marking a 2.5-fold increase from the previous year Domestic revenue contributed 9,005 billion VND, a 31% rise, while export revenue soared to 19,200 billion VND, over four times higher than the prior year, making up 68% of total revenue This revenue growth was driven by enhanced sales channels, increased production output, reduced production costs, and improved gross profit margins Additionally, the company optimized its production system by investing in a new warehouse in Binh Duong, which boosted factory capacity Nam Kim also focused on diversifying its customer base and adapting to market demands through effective sales strategies.
A key strategy for driving positive business results has been the focus on boosting exports to high-priced markets like North America and Europe, which account for 70% of total volume This approach has proven essential, especially as the domestic steel consumption market faced significant challenges due to the COVID-19 pandemic In 2021, Nam Kim capitalized on this export opportunity, achieving record output and export turnover.
Future orientations of developing Nam Kim Steel JSC
In the business plan of 2022, Nam Kim set out the following strategic directions:
To enhance competitiveness and achieve a production target of over 1 million tons per year, it is essential to effectively utilize existing human resources and optimize production line productivity This approach will lead to increased productivity and reduced production costs per unit.
The company is investing 250 billion VND in a centralized warehouse for the domestic market and a 5-hectare steel pipe factory in Binh Duong This strategic investment will facilitate the relocation of several auxiliary and logistics activities from the galvanized steel sheet factory, thereby optimizing production space and enhancing the production line's capacity.
The company is actively researching new high-quality products for both domestic and international markets Nam Kim is committed to diversifying its export markets, with a particular focus on high-quality product lines for Europe, North America, and Australia.
KEY ASPECTS OF THE BUSINESS OF NAM KIM
Steel market
Between 2015 and 2020, the domestic steel market experienced significant fluctuations From 2015 to 2017, a reduction in HRC steel output by China, coupled with a sharp increase in demand for galvanized steel sheets and pipes, led to rising HRC prices, benefiting domestic enterprises However, from mid-2017 to mid-2018, HRC prices fell, and domestic demand weakened due to excess supply from exports amid the escalating U.S.-China trade war This situation prompted domestic steel companies to restructure and divest from inefficient galvanized steel projects Since early 2019, the financial health of steel enterprises has gradually improved, but a tightening of real estate supply has resulted in decreased domestic steel output.
In 2020, the steel industry faced significant challenges due to the Covid-19 pandemic, which disrupted the domestic steel supply chain However, with effective pandemic control measures, the galvanized steel sector rebounded strongly in the latter half of the year By the end of 2020, Vietnam's total steel production reached 17.219 million tons, marking a 14% increase compared to 2019, while consumption rose to 16.984 million tons, reflecting a 12% growth over the previous year.
In 2021, Vietnam's steel industry demonstrated significant growth despite the challenges posed by the Covid-19 pandemic According to the Vietnam Steel Association, crude steel production reached approximately 23 million tons, marking a 16% increase, while finished steel production rose to 33 million tons, up 19% Additionally, sales of finished steel reached 29 million tons, reflecting a 16% increase compared to the previous year However, the onset of social distancing measures in July severely impacted construction activities and domestic steel consumption.
Despite a challenging domestic consumption landscape, Vietnam's export market has experienced remarkable growth since early 2020, bolstered by the implementation of new generation free trade agreements (FTAs) such as CPTPP, EVFTA, and RCEP These agreements have opened up new high-growth export markets for the steel industry According to the Vietnam Steel Association, the leading steel export markets in 2021 included ASEAN (28.64%), China (21.32%), Europe (12.56%), the United States (7.51%), and Taiwan (5.05%).
In 2020, Vietnam's iron and steel exports reached 9.86 million tons, valued at nearly $5.26 billion, with an average export price of $533.4 per ton This marked a significant increase of 47.9% in volume and 25% in export turnover Vietnamese steel enterprises successfully navigated supply chain disruptions, capitalizing on opportunities to export to countries facing supply shortages Notably, Vietnam exported 3.01 million tons to China, representing 35.9% of its total export volume and contributing $1.48 billion, or 28.2%, to the country's overall export turnover.
In 2021, iron and steel exports exceeded 13 million tons, valued at 11.79 billion USD, marking a remarkable 124.3% increase from 2020 The export price rose by 68.8%, equating to an additional 367 USD per ton This export promotion strategy has successfully diversified consumption markets, especially as the domestic market faced challenges due to the Covid-19 pandemic Notably, this year marked the first time steel product exports surpassed 10 billion USD, providing a strong impetus for the steel industry to sustain its trade surplus growth into 2022.
Figure 2: Nam Kim Steel's exporting market
Nam Kim specializes in three primary export product lines: galvanized steel sheets, aluminum-zinc alloy coated steel sheets, and color coated steel sheets, along with galvanized steel pipes in round, square, and rectangular shapes These products cater to the high demand in key Southeast Asian markets, including Indonesia, Malaysia, Thailand, and Myanmar In recent years, the company has invested in and implemented advanced production technologies from Europe and Japan, ensuring that their product quality meets leading global standards such as JIS (Japan), EN (Europe), AS (Australia), and ASTM (USA).
The company has successfully exported to over 50 high-quality markets, including the United States, Europe, and Australia Its market coverage is expanding, with export shipments reaching various regions worldwide, such as Asia, Europe, North America, South America, Africa, the Middle East, the Pacific Islands, and the Caribbean Nam Kim's primary export markets are Asia, Europe, and North America, driven by increased demand for steel as these countries enhance their economies through government spending on infrastructure projects.
2.1.3 Market shares of Vietnamese steel companies
In the galvanized sheet market, companies like Hoa Sen Group, Nam Kim, and Hoa Phat Group have successfully capitalized on export opportunities to increase their market share Hoa Sen Group and Nam Kim are the frontrunners, holding market shares of 35.5% and 15.6%, respectively Additionally, Hoa Phat has emerged as the 5th largest producer of galvanized steel sheets, boasting a market share of 5.9%.
Figure 3: Market share of galvanized steel sheet in Vietnam 2021
In the steel pipe market share, Nam Kim ranked fourth, accounting for 7.39%. Hoa Phat is at the top (30.23%) and followed by Hoa Sen (21.33%).
Figure 4: Market share of steel pipe in Vietnam 2021
Regarding the market share of construction steel, cold-rolled coil (CRC) and hot-rolled coil (HRC), Nam Kim accounts for only a small percentage.
Nam Kim's production process
Nam Kim Steel JSC's three steel factories in Binh Duong and Long An are now fully operational, utilizing advanced technology from SMS (Germany) and other developed nations to ensure the highest quality products for customers.
Nam Kim's steel production process includes the following steps:
Nam Kim sources input materials from globally recognized companies, including PPG Paint (USA), Beckers (Sweden), ZINC plating alloy (Korea), MGK Metal, Quaker Houghton (Netherlands), and Unicoh (Korea) To guarantee the highest product quality, Nam Kim conducts comprehensive inspections and evaluations of these materials prior to their use in production.
Input steel typically consists of cold-rolled full hard steel with a thickness ranging from 1.5 to 5.0 millimeters and a width spectrum of 750 to 1,300 millimeters These raw materials undergo de-rusting on advanced SMS group lines in Germany, which feature an efficient acid recycling system that significantly aids in environmental protection.
Weigh the ingredients and compare the stated weight on the packaging with the actual weight Conduct a preliminary inspection of the material bags by unpacking them and examining the contents, ensuring that any unsatisfactory materials are rejected from the production process.
CRS undergoes a thorough cleaning process with a chemical solution prior to entering the high-pressure water jet system, which effectively removes grease and contaminants After this cleaning procedure, the material is dried and subsequently stored for future use.
2.2.3 NOF stage (Non-Oxidizing Furnaces)
After the cleaning process, it is put into the NOF, where the CRS will be cleaned for the last time and softened before being cooled.
After being heated in the NOF process, the corrugated iron remains hot It is subsequently cooled in a water bath, reducing its temperature to between 60 and 80 degrees Celsius while simultaneously removing zinc dust.
Nam Kim operates Vietnam's first double cold rolling line featuring six CVC shafts, significantly enhancing production capacity while minimizing labor and operational expenses The process involves a cold rolling system that efficiently cleans iron and automatically determines the ideal flatness of corrugated iron at high speeds, producing sheets with a thickness range of 0.15 to 3.0 millimeters.
After cooling, the corrugated iron is sent to the Skinpass mill and Tension Leveler, which ensure a smooth and flat steel surface prior to the chemical coating stage.
Zinc-aluminum alloy galvanized steel
After going through the treatment process, the corrugated iron is almost completely cleaned to enter the zinc-aluminum galvanizing tank in order to make Zinc-aluminum alloy galvanized steel
Nam Kim operates five advanced metal plating lines utilizing NOF technology to produce galvanized and cold-coated steel sheets that meet various standards These lines, manufactured by SMS (Germany), incorporate cutting-edge technologies from EMG (Germany), Drever (Belgium), and Ajax (USA-Japan), ensuring optimal control over the flatness and uniformity of the plating surface The use of ceramic technology and induction heating from Ajax enhances the efficiency of the plating process Notably, Nam Kim's L-shaped furnace plating line improves heating on both sides of the corrugated iron, resulting in high-quality products with superior aesthetics.
Pre-painted zinc-aluminum alloy galvanized steel
Color coated corrugated iron is created by processing galvanized corrugated iron through a color coating line, allowing for a wide range of colors based on customer preferences This product comes with a warranty period of 15 years, ensuring durability and quality.
Nam Kim owns 2 advanced advanced color coating lines provided by Paco engineering (Korea) and Shanghai JX with an intelligent control system to ensure uniform coating quality and color durability.
Finished products will be classified A, B, C according to prescribed quality standards After rolling, the coil is weighed, labeled and transferred to the warehouse.
Quality of logistics services at Nam Kim steel JSC
The primary goal of production is to meet consumer demand, making the market a critical focus for manufacturers and businesses To gain a competitive edge and expand their market presence, companies must leverage effective logistics services The enhancement of logistics services significantly impacts the ability of businesses to explore and grow their market reach Consequently, elevating the quality of Nam Kim's logistics services is vital for boosting its competitiveness in the marketplace.
The initial step in the ordering process involves receiving and relaying the order to the appropriate departments For customers, the quality of the ordering procedure with the supplier is crucial In essence, streamlined, adaptable, and swift ordering processes are key elements that enhance customer value.
Nam Kim offers multiple ordering methods, including email, fax, phone, text message, and direct interaction with sales staff, with the latter three being the most common Order confirmations are typically processed within one day, and domestic customers can expect to receive their products within 7 to 10 days after placing an order The company also manages the hiring of shipping companies to ensure timely delivery to customers' warehouses.
The delivery time for export orders from Vietnam varies based on the geographical distance to the importing country Additionally, international orders may experience delays due to factors such as adverse weather conditions and customs clearance issues Nam Kim utilizes direct exporting processes to streamline these operations.
Figure 5: Nam Kim’s export process
Figure 6: Sample Bill of Lading of Nam Kim
Source: Nam Kim Steel JSC 2.3.2 Information quality
Information plays a crucial role in guiding customers' decisions regarding product usage It reflects the commitment to delivering comprehensive and precise details about order specifics and the requirements associated with products and services.
At Nam Kim, the sales team plays a crucial role in communicating with customers by providing essential information about products, pricing, production status, and delivery timelines This team collaborates closely with both the production and production planning departments to ensure seamless operations and customer satisfaction.
Nam Kim has partnered with Citek Technology Joint Stock Company to successfully implement the EPA - SAP system (Enterprise Resources Planning - Scientific Advisory Panel), which has been operational since July.
In 2020, a comprehensive system was implemented to standardize various business processes and functions, including financial accounting, sales, supply chain, production, transportation, human resources, and inventory management This software enables Nam Kim to efficiently track and manage its operations, ensuring a swift response to the ever-changing external environment, which in turn accelerates the flow of information to customers.
2.3.3 Order accuracy and order quality
Timely delivery, along with adherence to quantity and quality standards, enhances a company's market competitiveness Nam Kim is dedicated to manufacturing and supplying products that meet stringent technical specifications and undergo rigorous quality control Each product is inspected to ensure it meets quality standards before reaching customers, minimizing issues related to incorrect types, quantity shortages, or non-compliance with technical requirements As a result, product quality is consistently maintained at the highest level.
An efficient warehouse layout and the use of QR codes for product identification streamline the process of locating and transporting goods Strict management of imported raw materials, along with regular stocktaking reports, helps balance supply and demand, ensuring an adequate quantity of production materials As a result, the goods delivered to customers consistently meet the required quantity.
Nam Kim Steel JSC prioritizes the safe distribution of goods to prevent damage during transportation and handling, which can lead to additional compensation costs and refunds Such issues not only incur expenses but also diminish customer satisfaction due to the time required to address complaints To ensure quality, goods are stored in well-ventilated warehouses before being packed into containers.
When packing steel sheets, which occupy a large area in containers, they are rolled into circles rather than stacked A full container load can accommodate approximately four corrugated iron rolls, each weighing between 2 to 5 tons depending on the item type After the corrugated iron is packed, the responsible staff must document the container's condition by taking photographs, noting the number of seals, and recording any damage to the container foundation for future reference in case of complaints.
The company ensures quality control at the factory and is responsible for transporting containers from the warehouse to the seaport for exports or directly to domestic warehouses For export goods, the company handles all necessary procedures, including packing, document preparation, transferring goods to the port, completing customs procedures, and delivering containers to the vessel.
In today's highly competitive market, the pressure for timely delivery is intensifying, making quick response and efficient order processing essential for ensuring high-quality customer service.
The order process begins with the sales team confirming the order based on production capacity, which is then passed to the planning department This department develops a production plan to ensure that goods are ready for delivery to the warehouse by 7 a.m on the requested delivery day The delivery department is tasked with transporting the goods along with the necessary documentation Meanwhile, logistics staff monitor and coordinate delivery plans, managing inter-departmental collaboration and overseeing the transport fleet to guarantee timely and secure delivery to customers.
Handling wrong orders involves collecting complaints and suggestions from customers to answer, adjust and provide the most suitable solution for customers to improve customer satisfaction with the company.
Marketing activities of Nam Kim Steel JSC
Marketing activities significantly influence business competitiveness, directly affecting sales, market share, and brand development Effective strategies, including advertising, communication, promotions, pricing, and distribution, are essential for driving customer engagement However, Nam Kim faces challenges in its marketing efforts, resulting in limited brand recognition, particularly in the Northern market The reliance on sales staff for promotions and constrained marketing budgets hinder the company's competitive edge against industry rivals like Hoa Phat Group, Hoa Sen Group, and Ton Dong A Corporation.
Nam Kim branded building materials are recognized for their high quality in the domestic market The steel produced by Nam Kim consistently meets high and stable quality standards, as it is rigorously monitored under the ISO 9001-2008 Quality Management System and tested in a modern laboratory equipped with European-standard testing equipment.
Nam Kim lags behind competitors like Hoa Sen and Hoa Phat in market research and development activities These rivals benefit from a nationwide retail presence, allowing them to quickly understand customer needs regarding pricing, product quality, and preferences They also establish free telephone exchanges for customer inquiries and feedback on product quality and pricing In contrast, Nam Kim has not prioritized consumer engagement, resulting in slower information reception compared to its competitors.
Nam Kim primarily exports galvanized steel sheets, CRC, color-coated steel sheets, and galvanized steel pipes to key markets like Indonesia, Malaysia, Thailand, and Myanmar The company has invested in advanced production technologies from Europe and Japan to meet the high-quality standards of demanding markets such as the US and Europe Additionally, Nam Kim aims to expand its exports to new regions, including Africa, the Middle East, and the Caribbean To ensure compliance with technical requirements, Nam Kim carefully studies external factors like the environment and climate of importing countries, focusing on essential attributes such as elastic limit, durability, and elongation.
By opting for an indirect distribution channel, Nam Kim has effectively conserved its human and financial resources while leveraging agents in emerging markets This strategy has led to increased production and market share, enhancing the Nam Kim brand's visibility among consumers at a competitive cost Currently, Nam Kim's galvanized steel pipes, known for their quality and affordability, have gained the trust of numerous customers This advantage is evident in the company's consistently rising sales volume and revenue over recent years.
Nam Kim employs a variety of flexible pricing strategies tailored to meet the needs of diverse customers By establishing a pricing model that considers individual consumption patterns, the company incentivizes bulk purchases, encouraging customers to buy larger quantities of products.
Nam Kim effectively integrates a bonus policy based on monthly cumulative output, allowing for flexible pricing that enhances its competitive edge in the market Additionally, the company implements a payment discount strategy to incentivize early payments, which not only offers customers preferential pricing but also aids in the prompt recovery of debts.
Nam Kim utilizes an indirect distribution channel for the domestic market, supplying products to distribution agents via centralized warehouses, primarily located in the South, with an additional warehouse in Hanoi.
Nam Kim effectively conserves financial resources by leveraging intermediaries to connect with consumers Its branches serve solely as distribution warehouses for commercial clients, lacking retail functions for end-users, which limits its competitive edge in business and delivery locations compared to industry rivals In contrast, Hoa Sen Group boasts a significant advantage with a widespread network of nearly 60 provincial branches and over 400 affiliated stores across 63 provinces, facilitating optimal transaction conditions for customers Nevertheless, Nam Kim benefits from a strong base of long-term, loyal wholesalers, providing it with distinct advantages in product distribution to consumers.
Nam Kim has strategically chosen the ASEAN region as its primary export market due to several compelling reasons Firstly, Vietnam benefits from the ASEAN Free Trade Area Agreement (AFTA), which facilitates tariff reductions and eliminations Secondly, the cold corrugated iron products offered by Nam Kim are well-suited to the climate of Southeast Asia, resulting in high demand Additionally, the ASEAN market is relatively less stringent regarding technical standards, and consumer preferences align closely with those in Vietnam, allowing Nam Kim's products to easily meet import requirements Furthermore, the geographical proximity of ASEAN countries enables the company to minimize transportation costs, reduce delivery times, and mitigate risks, ultimately leading to more competitive pricing for its products.
In recent years, Nam Kim has successfully expanded its market presence to Europe, America, and Africa, regions known for their stringent technical regulations on export products The company is committed to meeting these rigorous standards to ensure its success in these competitive markets.
Nam Kim faces challenges in media access and social activities, which limits its ability to effectively advertise and build its brand The company's communication and public relations efforts remain modest, primarily utilizing low-cost advertising methods such as magazines, signboards, outdoor panels, and a few television channels.
Those large advertising campaigns of the company up to present were renting advertising screens in the first round of an oversea football tournaments in
2017 and sponsoring the Miss Vietnam 2018 program.
Hoa Sen Group Joint Stock Company leads in marketing activities among enterprises, followed by Hoa Phat Group and Ton Dong A Corporation These companies heavily invest in initiatives like supporting the Covid-19 epidemic prevention fund and sponsoring television programs and events for the underprivileged and flood-affected communities As a result, these brands have gained widespread recognition and significant market influence.
ASSESSMENT & SOLUTION RECOMMENDATIONS
Assessment of the company situation
In today competitive market, Nam Kim still achieves a good growth rate, develops and creates trust for domestic and foreign customers Here are some of the company's strengths:
Steel materials are primarily sourced from reputable corporations like Nippon Steel (Japan), Hyundai Steel (Korea), CSC (Taiwan), and Formosa (Vietnam) These companies implement stringent input quality control measures, ensuring that their steel products are highly regarded by consumers and comply with both domestic and international quality standards.
Nam Kim is a leading iron and steel production company in Vietnam, utilizing advanced production technology from Europe and Japan to ensure high-quality products that meet global standards The company's production system adheres to ISO 9001 and ISO 14001 standards, implementing a rigorous quality management process Nam Kim's products are manufactured according to Japanese standards and have received the JIS-3320 certification from the Bureau of Quality Certification, ensuring compliance with the stringent requirements of importing countries This commitment to quality gives Nam Kim a competitive edge in the steel industry, which demands high standards for aesthetics and durability.
In 2019, the company launched a cold plating line with an annual capacity of 150,000 tons, a color coating line capable of producing 120,000 tons, and a cold rolling line with a capacity of 200,000 tons Additionally, the Long An zinc steel pipe factory commenced operations, contributing another 200,000 tons, resulting in a total galvanized steel output of 1.2 million tons per year.
The company offers flexible logistics services with multiple order receiving channels, making it easy for customers to place orders Its experienced sales staff foster strong relationships with both domestic and international clients, ensuring attentive service Additionally, the company actively seeks new business partnerships to promote long-term collaboration.
In addition, flexible sales policy and competitive prices are also an advantage of Nam kim compared to competitors.
In spite of the above advantages, Nam Kim also has the following limitations:
Nam Kim primarily sources its steel materials through imports, necessitating payments in foreign currencies for these contracts Consequently, fluctuations in exchange rates pose a significant risk, impacting the cost of imported materials and, in turn, the company's profitability.
Nam Kim's analysis using the 4P's model reveals a significant limitation in its sales channel strategy Unlike competitors such as Hoa Sen and Hoa Phat Group, Nam Kim lacks the financial strength to invest heavily in a retail network, relying instead on agents for distribution This dependency has negatively impacted Nam Kim's gross profit margin, making it less competitive in the market.
The Nam Kim steel brand currently has low awareness in the domestic market compared to competitors like Hoa Phat Group and Hoa Sen Group, which enjoy nationwide recognition This limited visibility is primarily due to underdeveloped distribution channels in key regions and a lack of investment in marketing efforts to enhance brand presence.
Solution recommendations
To ensure a smooth production process, the company must strategically reserve an adequate supply of raw materials Additionally, negotiating and securing contracts with suppliers can help maintain stable prices for these essential inputs.
Training courses enhance employees' understanding of the ERP model, enabling them to effectively coordinate information flows and optimize business processes to better satisfy customer needs These courses equip employees with the necessary knowledge and skills to actively engage in the operation of the ERP system.
Maximizing production line efficiency is essential for lowering costs, minimizing product depreciation, and enhancing labor productivity Effective maintenance of machinery and equipment is crucial to ensure uninterrupted operations, reduce downtime from repairs, and extend the lifespan of machines, ultimately leading to decreased operational expenses and lower product prices for businesses.
Employees must always keep in touch with customers regularly and collect their opinions about the quality of services and products that the
Company provides Since then, the Company promotes the advantages and limits the disadvantages to improve the quality of its products and services.
Establishing relationships with shipping service providers to be able to support customers in the best way about shipping solutions with the best cost, meeting the competitiveness in the market.
Investing in community relations programs is essential for the company, as it includes initiatives that serve the public, support the underprivileged, engage in charitable activities, enhance education, sponsor entertainment events, and participate in specialized forums on steel sheets These activities not only attract significant public interest but also build trust within the community, ultimately aiding the company's objective of increasing its market share.
To enhance marketing efforts, the company should prioritize its marketing resources Currently, the human resources dedicated to marketing are limited, necessitating the development of this area By improving both the quantity and quality of marketing personnel, the company can better support sales activities and meet its growth objectives.
To enhance the distribution of Nam Kim's products, it is essential to strengthen communication and relationships with construction contractors and iron and steel entrepreneurs The company should allocate additional resources to develop effective communication channels and foster trust with these customers, aiming to establish long-term partnerships By reinforcing connections with construction contractors and designers, Nam Kim can position its galvanized steel pipes as the preferred choice during construction projects, tapping into a promising market for galvanized steel pipe consumption.
From 2019 to 2021, Nam Kim experienced significant growth, achieving notable successes in both domestic and international markets However, it is important to address existing challenges to develop effective solutions for these issues.
With regards to the main research purposes of the topic " Key aspects of the business of Nam Kim Steel Joint Stock Company” the report has completed the following tasks:
- Providing an overview of the current situation of the domestic and international steel market
- Analyzing and evaluating key aspects of Nam Kim's business including production, logistics and marketing strategies
- Proposing solutions based on existing limitations of Nam Kim Steel JSC.Once again, sincerely thanks to Dr Luu Minh Duc for helping me complete this report.
1 Nam Kim Steel Joint Stock Company, Annual Report 2019, 2020, 2021
2 Vietnam Steel Association (VSA), Tình hình thị trường thép Việt Nam tháng 11/2021 và 11 tháng đầu năm 2021.
3 Vietnam Steel Association (VSA), Hội thảo Thị trường Thép Việt Nam và Công tác hoạt động Hiệp hội Thép Việt Nam năm 2021- Triển vọng năm 2022.
4 Vietnam Steel Association (VSA), Tổng quan thị trường thép toàn cầu – tháng 5/2021.
6 Vietcombank Securities, Steel Industry Report 2021
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