Enhancing competitive advantages of building materials production companies under the ministry of construction

Due to the above reasons, in the current competitive environment, the enhancement of competitive advantages for Vietnamese businesses in general and building materials production busines

PREFACE

1 Rational:

In order to maintain market share, improve business’s effectiveness and

efficiency, it is very important to enhance company’s competitive advantages

The questions how to help companies make the right and effective decisions to

enhance competitive advantages; which solutions can help companies improve

their competitive advantages will be more and more important not only for

business practitioners but also for researchers

Due to the above reasons, in the current competitive environment, the

enhancement of competitive advantages for Vietnamese businesses in general and

building materials production businesses under Ministry of Construction in

particular will be urgently and strongly required The thesis with the title

“Enhancement of the competitive advantage for building materials production

companies under Ministry of Construction” is very necessary and important

theoretically and practically

2 Aims of thesis:

The thesis’s objectives are identifying competitve advantages of building

materials production businesses under Ministry of Construction; exploring

resources, especially intangible resources that create these competitive

advantages The thesis’s objectives are specified by the following research

questions:

Firstly: Current competitive advantages of building materials production

businesses under Ministry of Construction?

Secondly: Which tangible and intangible resources play imprtant roles in

creating competitive advantages of building materials production businesses

under Ministry of Construction?

Thirdly: Which solutions can help to enhance competitive advantages of

building materials production businesses under Ministry of Construction?

3 Research Scope and Objectives:

Research objectives: the research objectives are competitive advantages and

the impact of intangible and tangible resources on these competitive advantages

of building materials production businesses under Ministry of Construction The

research also examines the impact of competitive advantages on these companies’ performance Finally, the research proposes solutions to enhance these competitive advantages

Research scope:

Date collection: The sample of all 43 building materials production

companies under Ministry of Construction has been selected These businesses cover four main areas in building materials production: construction glass,

sanitary ware, granite and ceramic tiles; brick and clay products

Geographic area: The companies selected have been locating and operating

in all provinces in Vietnam

Timing: secondary data had been mainly collected during the period

2008-2013 Primary data had been collected and analyzed during period 2012 – 2008-2013

4 Research methodology:

In order to achieve it’s objectives, there are 3 steps:

Table 1.1: Research steps STT Research Objectives Interviewees Data collection

and analysis

1

Literature review, research modeling, clarifying practical and theoretical contribution of the research

05 company’s managers

08 current customers

05 business researchers

Secondary research In-depth interviews

2

Specify competitive advantages;

Specify resources creating competitive advantages for companies

04 focus group discussions with customers in four main areas

04 focus group discussion with managers in four main areas

Focus group discussions

3

Check the relationship between tangible, intangible resources and competitive advantages

Check the total impact of these resources on company’s competitive advantages

Check the relationship between competitive advantages and company’s performance

900 manager at building materials production companies in four main fields: building glass, sanitary ware, granite and ceramic tiles, bricks and clay products

Survey Questionnaires Aggression analysis

(Source: Author)

5 Thesis structure:

Thesis includes the following components:

Introduction

Chapter 1: Literature review of theory on competitive advantages of

manufacturing businesses

Chapter2: Current development of building materials production business

under Ministry of Construction

Chapter 3: Research Methodology

Chapter 4: Analyze and Identify competitive advantages of building

materials production business under Ministry of Construction

Chapter 5: Solutions to enhance competitive advantages of building

materials production business under Ministry of Construction

Conclusion

CHAPTER 1: LITERATURE REVIEW OF THEORY ON COMPETITIVE ADVANTAGES OF MANAFACTURING

COMPANIES

This chapter includes three main parts as summaried as bellows:

1.1 Sources of Company’s Competitive Advantages

There are theoretically many opinions about and understanding of competitive advantages, sustainable competitive advantages as well as the sources of these advantages Although there are many theories to explain the creation of these competitive advantages but these theories can be divided into two main streams: (a) theories explaining the creation of competitive advantages from outside company, including: national competitiveness, industrial competitiveness; (b) Theories explaining the creation of competitive advantages from within company, including: value chain, company’s resources

Miller & Shamsie’s research (1996) used the resource theory to analyze the role of company’s resources on performance Other research in Vietnam (Nguyễn Vĩnh Thanh, 2005; Nguyễn Đình Thọ, 2008; Zhan and colleagues, 2009; Bùi Xuân Phong, 2006; Phạm Quang Trung, 2008; Vũ Trọng Lâm, 2006; Nguyễn Kế Tuấn, 2011) also evaluate the competitive advantages and the source of these advantages in companies

1.2 Literature review 1.2.1 Basic concept

1.2.1.1 Competition

Competition is the fighting among differrent economic entity (among nations, companies) based upon the effective employment all economic resources, advanced production technology, provision of excelent services in order to satisfy customer’s needs by providing better quality products at resonable price compared to company’s competitors Competition is foundametal principle of market economy Competition has both plus and minus impacts

1.2.1.2 Competitive advantages:

After review major theories about competitive advantages, it can be summarized the common points about competitive advantages as follows:

Competitive advantages have been assessed by customer’s perception:

competitive advantages reflect customers or end-user’s general perception about

the value of products and services provided by company in comparison with its

competitors

Company’s competitive advantages have to be compared with its

competitors: Normally, these competitors are businesses operating in the same

industry and in the same market

1.2.1.3 Sustained Competitive Advantages

Sustained Competitive Advantages had been mentioned long time ago by

many researchers Alderson (1965), Hamel & Prahalad (1989), Dickson (1992),

Hall (1980) & Henderson (1983) are the authors discussed very early about

sustained competitive advantages Day (1984) is the first author mentioned about

strategies to help company sustain its competitive advantages In reality, Porter

(1985) mentioned officially the concept “sustained competitive advantages”

when discussing different basic strategies that can be applied by companies (low

cost or differentiation strategy) to have sustained competitive advantages Later

on, this concept have been further discussed by Barney (1991) and Collins &

Montgomery (1995)

1.2.1.4 Generic Competitive Advantages:

Lê Thế Giới and others (2007), generic competitive advantages come from

four components: superior efficiency, superior quality, superior innovation, and

superior customer responsiveness These four components are considered as

generic because any company and business can build regardless which industry

and what kind of services it provides These four components are strongly

interrelated

1.2.1.5 General Company’s Strategy

According to Porter, companies that are successful in pursuing and applying

differrent strategies normarlly have to form different business units and each of these

business unit follows one strategy By seperating strategies for each business unit in

terms of policies or even culture, companies can minimize the risk of being slow

down development

1.2.1.6 Competitive Advantages of Manafacturing Company

Production is primarily activities in the economic activities of man Production

is the process of making the product for use, or for commercial exchange In the production process, the manufacturing enterprises will have to make the decision to answer the following key issues: What to produce? How to produce? To whom to produce?How much does it cost to produce and how to optimize the use and exploitation of the resources needed to do a product?

1.2.2 Theories related to company’s competitive advantages

Ccompetitive advantages of a nation

According to this theory, the competitive advantage of enterprises affected

by the basic characteristics of the country The following features will create a favorable environment or difficult for domestic enterprises in the process of competing with foreign businesses: (a) the conditions of domestic production factors; (b) demand conditions in the country; (c) support and related industries and in the country; and (d) the strategy, structure and competitors of the company In addition, two external factors, including the impact on the business

of government policy and the influence of opportunities also play an important role in creating the attractiveness of the business environment in the country (Porter, 1990)

Theory of Five Competitive Forces in an Industry

This theory was proposed by Porter (1980) to analyze the competitive forces that determine competitive advantages and profitability of each industry This theory assumes the competitive forces in the industry, including: (1) the current competitors of the business, (2) potential new entrants, (3) substitute products, (4) the power of suppliers, and (5) the power of buyers will impact profitability and competitive advantage of firms in the industry

Theory of Value Chain

Porter (1985) argues that competitive advantage is formed from the internal activities and processes of enterprises It should be noted that competitive advantage does not come from a separated activity but depends on and is the result of the interaction, coordination of activities in the value chain

The value chain is considered as a useful tool in finding out the source of

competitive advantage However, many researchers, which is typical Barney

(2002) argues that the use of the value chain is difficult to detect special

resources, intangible nature, but has an important role in creating competitive

advantage of the business: the knowledge-based resources, the special skills of

the staff to develop new products, the ability to establish relationships with

partners and customers, the suppliers, distributors involved in the operation, etc

Therefore, researchers continue to develop new theory to explain the formation of

competitive advantage of enterprises

Resource Based Theory

Researchers classified the resources of the business in many different ways

Barney (1991) classifies resources into human capital resources, physical capital,

organizational capital Grant (1991) divided into tangible resources, intangible,

and people The classification does not reflect the characteristics of the model

VRIN so this method has little value in explaining the origin form the

competitive advantage of enterprises

Miller and Shamsie (1996) based on barriers for competitors to imitate

divided into knowledge-based resources (skills and know-how relating to

management capability, technological capability, and capacity Marketing) and

resources based on ownership of assets (equipment, buildings, factories, land, etc

) This classification represents the characteristics of the model VRIN thus it

helps to explain the formation of competitive advantage of enterprises

These resources may be tangible or intangible and they are owned and

employed by company in the formation and implementation of the strategy (Barney

and Hesterley, 2006) Intangible resources can include skills, human capital,

information capital and organization capital, reputation and relationships capital All

these resources represent resources that business owns Tangible resources are the

number of employees, the size of the total capital of the enterprise Intangible

resources as learning orientation, market orientation of the enterprise

Market orientation:

Naver and Slater (1990) suggest that market orientation consists of three

components: customer orientation (a focus target-buyer), competitor orientation consisting of existing competitors and potential competitors, interfuntional coordination among differrent Boris and CTG (2010) added the concept of internal market orientation based on the views of Joseph (1996) and Berry and Parasuraman (1991) The internal market orientation is thus specified by employee orientation and competitor orientation on the employee market

Learning orientation:

According to Sinkula (1997), learning orientation consists of three main dimensions: Commitment to learning of all idividuals in the company, shared vision among members of the business, open-mindedness in operating and running business activities in company

1.3 Related research in the world and in Vietnam

Miller and Shamsie (1996) studied how resources could contribute to company’s performance during the less volatile business environment from 1936 to

1950 and more volatile between 1951 and 1965

Experimental study of Zhan and co-author (2009) using resources based to forming competitive advantages of joint ventures in Vietnam

Nguyen Vinh Thanh (2005) mentioned primarily the role and impact of tangible resources (company capital) and business activities (including market research and target market selection, business’s strategy, research and development

of new products, technology development, management competency) on competitive advantage of enterprises

Bui Xuan Phong (2006) showed that for that building corporate culture, an intangible resource of the enterprise is one of the solutions to improve the competitive advantage of the telecommunications industry

Pham Quang Trung (2009) suggested that the resources that affect the competitiveness of business including: capital and financial ability, quality of human resources and technology development, brand and marketing activities

Vu Trong Lam (2006) has summaried the theories that can be employed to evaluate competitiveness of enterprises and analyze the current state of competitiveness of enterprises

CHAPTER 2: CURRENT DEVELOPMENT OF BUILDING

MATERIALS PRODUCTION COMPANIES UNDER MINISTRY OF

CONSTRUCTION

This chapter includes the four main parts as follows:

2.1 Introduction of building materials industry

Currently, building material manufacturers in Viet Nam has been early

accessed to global up-to-date science and technology for development of

production, quickly switching from small producer to large producer, from

backward technology to modern technology The potential of mineral resources,

market, technology, labor will be exploited for the development of construction

materials into strong economic sector, which meet the quantity, quality and type

of exportation and domestic needs

In addititon, building materials production and trading companies come from

diferrenr sectors, including state-owned, private equity, joint ventures and forein,

100% foreign owned companies Among those companies, 43 enterprises belong to

the Ministry of Construction (Appendix 3), with nearly 25,000 officers and staffs It

also comprises relative companies which exploit raw material as inputs for these

companies Besides, the Building Material Corporation and the Ceramics

Cooperation, namely, Viglacera, also have its own business units that operate in real

estate, construction and installation business with the aim of expanding their

markets

2.2 The business environment of companies producing construction

materials

2.2.1 General Environment

Political: the political and state legal framework has a direct impact to the

overall business and production of building materials in particular In recent

years, Viet Nam always secures its position, encourage active participation of

private sector, intergrate more into the international economy, strong reform

administrative procedures , remove obstacles of bussiness, improve the foreign

investment environment

Economics: in 2011, Vietnam’s economy has shown some initial signs of overcoming the global economic crisis and recovering economic growth However, the minor busty demand and expansionary monetary policy, an increase in inflation cause macroeconomic becomes a major risk for the economy

of Vietnam

Socio-cultrural: Viet Nam is developing country with a GDP annual growth rate reaches a high level, average per-capita income increases continuously in major cities such as Ha Noi, Ho Chi Minh City, Da Nang, Therefore, the need to use building materials with good quality has been increased This is a new trend Technology: the speed of scientific and technical progress too quickly, science discoveries made improved product more continuously appeared New modern technologies are altering the traditional technology, enable fully replace the traditional goods

2.2.2 Industry environment

Industry environment include the following issues: (1) Capital firms, (2) Technological development, (3) Human resources in companies, (4) Management capacity of firms, (5) Market research and target market selection, (6) Product strategy, (7) Distribution strategy, (8) Research and new product development cost and investment

2.2.3 Opportunities and challenges

Vietnam’s Building materials industry has impressive rate of development and achievement: quality, category products meet the domestic demand; product quality are comparable to many countries in region, capable of competing with imported products; products have been exported to over 100 countries around the world; contributed about 9-10% GDP throughout all industries; is the major contribution to the state budget;

Encourage the development of other industries; create more jobs [10] One of the goals according to the master plan development of construction materials in Vietnam toward 2020 was approved by the Prime minister in decision No.121/2008/QD-TTG August 29,2008 is “ continuously investing in development of basic building materials such as cement, paving material, sanitary

ware, building glass, building materials, roofing materials’ ( page 2) and “

constantly training to improve management capacity” (page 1) “ high competitive

products in domestic and international market’ This planning also identifies that

Ministry of Construction has function of state management of building material

and owner’s representative of the state equity in state owned building materials

construction production companies

2.3 The current development of buidling materials production

companies under the Ministry of Construction

In the manufacturing industry of building materials in Vietnam currently,

there are 5 main manufacturing industries: cement, ceramic tiles, sanitary ware,

construction glass, brick and clay products Although the cement industry is a

major industry, it is homogeneous product and primarily dependent on

technology Therefore, this thesis just focuses on the remaining four sectors

Besides the difference in product quality, many factors such as: categories,

materials, and material innovation, also affect these four sectors

The research mainly focuses on the following sectors (1) Glass building, (2)

Sanitary ware, (3) Granite and Ceramic Tiles, (4) Bricks and clay products

2.4 The financial situation of construction materials production

companies under the Ministry of Construction

Financial resources play an important role in tangible resources of

companies because it reflects the internal resources of an enterprise, the total

assets of the business, Therefore, the author analyzed a number of key financial

indicators of enterprises producing construction materials under the Ministry of

Construction The number of enterprises producing construction materials of the

Ministry of Construction is not small Furthermore, collecting financial data of

these firms so difficult, therefore in this section, the authors evaluated only the

financial situation of business units belonging the Ceramic and Glass Corporation

Viglacera

Equity of building material businesses are at an average compared with the

state-owned enterprises The authors found that, in the period 2009-2011, when

the real estate market there are tremendous growth, these companies producing

construction materials also benefit from that growth, their performance is excellent However, from 2012, when the real estate market froze, the performance of these companies producing construction materials was less efficient, the proportion of equity in total assets decreased markedly

In four areas of research, the manufacturing sector of brick and clay products is strength of the manufacturing enterprises of building materials This also confirms

an objective fact, that the field of glass, sanitary ware, ceramic tiles are under huge competition from a lot of businesses, from imported products

Net profits of most businesses are not stable and tends to decline in recent years As we can see, the value of goods inventory is close to the value of equity These firms currently operate only moderate scale with the aim of keep the companies survived And this issue reaffirms the urgency of improving the competitive advantage of firms

Technology Development

Market

volatility

Competition level

Tangible Resources:

- Number of employees

- Equity

Intangible Resources:

- Learning Orientation

- Market Orientation

Competitive Advantages

Companies Performance

CHAPTER 3: RESEARCH METHODLOGY

3.1 Research model

The competitive advantages will be based on the research and opinions of

Koufteros and co-author (1995), Li and co-authors (2006), Thatte (2007) The firm’s

resources will be classified according to the views of Miller and Shamsie (1996)

Figure 3.1: Model of resources and competitive advantage of firms

3.2 Study Steps

To achieve the research objectives, three steps has been taken: (1) A

preliminary study, (2) Qualitative Research, (3) Qualitative Research

3.3 The study concept and measures

In this section the author present the concept and measures of the

independent and the dependent variables in the research model These are: (1)

The firm’s competitive advantages; (2) The number of employees in the

company, (3) Total Equity, (3) Learning Orientation; (4) Market Orientation; (5)

The level of market volatility, (6) Competition levels (7) The level of

technological development, (8) Business Performance Variables are presented below based on literature, the previous studies and revision of each variable through qualitative research steps

Multi-item scale has been used to measure key concepts These multi item scales have been proved to be consistent with the standards of value and reliability by previous studies

3.4 Questionnaire design

The questionnaire include:

Introduction Information: This section includes an introduction about the content and purpose of research Author gives brief guide to answer the questions on the table and contact information if the interviewee has any questions

Information reflecting respondent’s opinions: In this section, the author poses questions to have comments of the respondents by ging the number for each statement The statement was designed to measure the scale has been used in previuos studies The measures consists of observations of many variables (1) The competitive advantages of the company, (2) learning orientation, (3) market orientation, (4) the business performance of the company

Additional information: In order to collect additional content related to the research model This additional information includes the scales (5) The information about the business environment, (6) General information about the company, (7) Information on the respondents in case they want to know the finding of this research

3.5 Sample Design and Selection

Sample in this study was carried out by non-probability sampling Under this method, the authors have focused on the companies producing construction materials under the Ministry of Construction These companies are state-owned enterprises or state capital more than 51% of the total equity in four areas: building glass, sanitary ware, bricks, tiles and clay products Businesses operating in regions across the country The author sent the questionaires to 43 companies

In each company, the respendents will be selected in order are: board members, managers and executives, head of each divisions The typical divisions in these

companies are: Sales, accounting, planning, personnel, and mechanical and

electrical engineering, production Total questionaires had been sent out is 900

The number of questionaires returned is 236, representing 26.2% of total

respondents It can be said that this sample reflects and represents all building

materials production companies under the Ministry of Construction

3.6 Respondent discription

Table 3.2: Distribution of respondents according to group positions

Position Percentage

1 Chairman of Board of Management 4

5 Deputy Head of Divisions 41,5

(Source: Survey on model of resources influencing to competitive

advantages, author)

Table 3.3: Grouping by field surveys of business

Fields of business Percentages

1 Construction Glass 23,6

3 Granite and Ceramic Tiles 26,8

4 Bricks and Clay Products 25,2

(Source: Survey on model of resources influencing to competitive advantages,

author)

CHAPTER 4: ANALYSE AND INDENTIFY COMPETITIVE ADVANTAGES OF CONSTRUTION MATERIAL ENTERPRISES

UNDER MINISTRY OF CONSTRUCTION

After collecting all questionnaires, author analyzed information, filtered questions and encoded the information from the questionnaires Data were analysed using SPSS software version 20

4.1 Assessing the reliability of variables

To check the reliability of data, Cronbach's Alpha model was applied Cronbach's Alpha model is used to remove the mismatch variables and to limit noise

of variables in research process and evaluate the reliability of these variables Cronbach's Alpha ranges from 0 to 1 In theory, the higher the Cronbach's alpha, the more reliability the variables are These variables which have correlation coefficients less than 0.3 will be disqualified These variables which have Cronbach's alpha correlation coefficient from 0.6 can be used Typically, Cronbach’s alpha is from 0.7 to 0.8 in this research

4.2 Descriptive statistics of the variables

Trước khi đi phân tích mô hình hồi quy, tác giả thống kê các biến trên như sau: Before conducting regression analysis, descriptive statistics of the variables have been discribed as follows:

Table 4.2: Variables using for regression analysis

Numbe

r of observ ation Mean

Standa

rd deviati

on

(Source: Author’s interview and analysis)

4.3 Analysis the correlation between competitive advantage and

resources

Performing correlation analysis based on the assumption H0i: "variable i and

original variable 0 do not have a linear relationship, i.e., the correlation coefficient is

0" In this hypothesis, the level of significance is chosen as 0.01 (i.e the probability

of accepting the wrong hypothesis is 1%) When reliability coefficient is larger than

0.01, we will accept H0i hypothesis, i.e the two variables are considered no

correlation When reliability coefficient is less than 0.01, we will reject the null

hypothesis H0i, or that the two variables are correlated After analyzing the data

through SPSS, we come to the conclusion that competitive advantage is influenced

by learning orientation and market orientation, and not be affected by the number of

employees and total capital size

4.4 Regression analysis

To assess the impact of these factors on competitive advantage, the authors

used multivariate regression models Multivariate regression model is proposed as

follows: Y = f (x) = β0 + + β2X2 β1X1 βnXn + + + ε

In the model: Y is a competitive advantage X1, X2, ., X7 elements

respectively number of employees, size of the total capital, learning orientation,

market orientation, the level of market volatility, level of competition, level of

development technology β1, β2, , β7 coefficient respectively of the corresponding

elements

Hypothesis test using SPSS software to assess the suitability of a multivariate

regression model to test the suitability of the model, the authors concluded

respectively:

- Three environmental factors do not affect competitive advantage

- Two tangible resources does not affect competitive advantage

- Two intangible resources affect competitive advantage

4.5 Analysis of Competitive Advantage, Learning Orientation, Market Orientation

4.5.1 Analysis of Competitive Advantage

Table 4.6: Components of Competitive Advantages

Mean Standard

Deviation

Delivery as Customer’s requirement 3,90 0,78

Time to deliver products to market 3,48 0,65

(Source: Author’s interview and analysis)

4.5.2 Learning Orientation

Table 4.7: Components of Learning Orientation

Mean Standard

Deviation

(Source: Author’s interview and analysis)

4.5.3 Market Orientation

Table 4.8: Components of Market Orientation

Mean Standard

Deviation

Inter-functional Cooperation Orientation 3,63 0,95

Employee Competition Orientation 3,39 0,98

(Source: Author’s interview and analysis)

Analysis of model that Competitive Advantage depends on Learning

Orientation and Market Orientation

SPSS software was employeed to analysis the model and the results are

discribed as follows:

Competitive Advantages = 1,007 + 0,363 x Learning Orientation + 0,356 x

Market Orientation

Competitive Advantages = 1,162 + 0,668 x Learning Orientation

Competitive Advantages = 1,433 + 0,609 x Market Orientation

Competitive Advantages = 1,176 + 0,264 x Commitment to Learning + 0,129 x

Vision Sharing + 0,273 x Open mindedness

Competitive Advantages = 1,004 + 0,505 x Customer Orientation - 0,257 x

Competitor Orientation + 0,007 x Interfuntional Cooperation Orientation + 0,3 x

Employee Orientation + 0,155 x Employee Competition Orientation

Business Performance = 1,368 + 0,414 x Competitive Advantages

CHAPTER 5: IMPROVING THE COMPETITIVE ADVANTAGE OF BUILDING MATERIALS PRODUCTION COMPANY UNDER

MINISTRY OF CONSTRUCTION

5.1 Orientations for socio-economic development of Vietnam to 2020

The strategy of social and economic development (2011 - 2020) has set a target

of "Vietnam basically become a modern industrialized by 2020" On the basis of analyzing weakness and current difficulties, the causes have been found out are lack

of high quality human resources, lack of infrastructure systems (synchronous and modern), and lack of business modern business that it is the enterprenership spirit

As he Konosuke Matsushita (1894 - 1969), founder of Matsushita, one of 20 talented entrepreneurs, the most prominent twentieth-century Japan - wrote: "the success or failure are now man" The centerpiece of the development is due to the talent recruited suitable or not

5.2 The development orientations of building materials industry

The target in 2020 of the industry of building materials is to strive to basically complete the process of industrialization and modernized toward 2030 and aims to reach the level of the modern industry, green industry that are equivalent with the level of other countries in the region and the world

Prime Minister Nguyen Tan Dung has signed Decision No 121/2008 / QD-TTG, approved the master plan on development of building materials Vietnam toward 2020, which continues to invest in developing basic materials such as cement; paving materials, sanitary ware; building glass; building materials, roofing; stone, sand and building decoration materials; and focus on developing new materials, environment friendly

5.3 The challenges and goals to be reached

5.3.1 The challenges

In the trend of globalization today, goods have been imported and exported to other parts of the world; markets are widen, covering the whole world Therefore, any business that has enough resources and wants to grow, would also like to expand their markets abroad The construction materials production company under