INTERNATIONAL BUSINESS MANAGEMENT a

NATIONAL ECONOMICS UNIVERSITY EXCELLENT EDUCATIONAL PROGRAM BACHELOR THESIS IMPROVING EFFICIENCY OF COAL IMPORTATION AT VINACOMIN JOINT STOCK COMPANY HANOI - 2020 Major : International

NATIONAL ECONOMICS UNIVERSITY EXCELLENT EDUCATIONAL PROGRAM

- -BACHELOR THESIS MAJOR: INTERNATIONAL BUSINESS MANAGEMENT

IMPROVING EFFICENCY OF COAL IMPORTATION AT

VINACOMIN JOINT STOCK COMPANY

Tran Tuan Kiet

HANOI - 2020

NATIONAL ECONOMICS UNIVERSITY EXCELLENT EDUCATIONAL PROGRAM

BACHELOR THESIS

IMPROVING EFFICIENCY OF COAL IMPORTATION AT

VINACOMIN JOINT STOCK COMPANY

HANOI - 2020

Major : International Business Management

Class : International Business Management K58

Student’s ID : 11162633

Supervisor : Associated Professor, PhD Ta Van Loi

In order to successfully complete this thesis, I would like to express my sincerethanks to the teacher who instructed Dr Ta Van Loi for guiding me enthusiasticallyduring the process of my thesis

I would also like to send my sincere thanks to the board of director ofVinacomin Coal Import Export Joint Stock Company and its employees

In particular, I would like to thank Mr Dao Xuan Viet, Head of the Coal Importand Export department, for helping me during my internship at the company

Thank you sincerely!

TABLE OF CONTENTS

ACKNOWLEGEMENT

STATUTORY DECLARATION

LIST OF TABLES

LIST OF FIGURES

INTRODUCTION 1

1 Rationale 1

2 Related literature review 1

3 Research and objectives ( em sao ko sửa theo gợi ý, thày đã sửa bao nhiêu bạn là tasks and targets rồi? objective này khái gì bên dưới? 2

3.1 Research goal 2

3.2 objectives 2

4 Research object and scopes 2

4.1 Research object 2

4.2 Scopes 3

5 Research methodology 3

5.1 Data collection method 3

5.2 Research methods 3

6 Research structure 3

CHAPTER 1: THEORETICAL FRAMEWORK OF IMPROVING EFFICIENCY IMPORTATION AT VINACOMIN JOINT STOCK COMPANY 4

1.1 Overview of import 4

1.1.1 Concept of import 4

1.1.2 Characteristics and roles of import 4

1.1.3 Types of import 6

1.2 Theoretical background of business efficiency and business efficiency of import activities 7

1.2.1 Conceptual definition of the business efficiency of import activities 7

1.2.2 Business efficiency of import activities classification 9

1.2.3 Factors influencing the business efficiency of imports 10

1.3 Theorical background on improving the business efficiency of import activities .15 1.3.1 The necessity to improve business efficiency of import activities 15

1.3.2 Measures to enhance the business efficiency of import activities 16

CHAPTER 2: SITUATION OF IMPROVING EFFICIENCY OF COAL IMPORTATION AT VINACOMIN JOINT STOCK COMPANY FROM 2017

TO 2019 21

2.1 Overview of Vinacomin Joint Stock Company 21

2.1.1 Establishment and development 21

2.1.2 Overview of Vinacomin coal import activities 27

2.2 Situation of improving efficiency of coal importation at Vinacomin Joint Stock Company from 2017 to 2019 31

2.2.1 Situation of coal importation 31

2.2.2 Criteria reflecting the efficiency of coal importation at Vinacomin from 2017 to 2019

41 2.3 Assessment of the situation of improving efficiency of coal importation at Vinacomin Joint Stock Company from 2017 to 2019 44

2.3.1 Highlights 44

2.3.2 Limitations 45

2.3.3 Causes of limitations 46

CHAPTER 3: RECOMMENDATION TO IMPROVE EFFICIENCY OF COAL IMPORTATION ACTIVITIES AT VINACOMIN JOINT STOCK COMPANY 48

3.1 Advantages and disadvantages of improving efficiency of coal importation at Vinacomin 48

3.1.1 Advantages 48

3.1.2 Disadvantages 49

3.2 Goals and Orientations 49

3.3 Solutions and Recommendations to improve efficiency of coal importation at Vinacomin 51

3.3.1 Solutions from Vinacomin 51

3.3.2 Recommendations to the Government 52

( quá mất cân đối? chương 3 có 6 trang, giải pháp không nổi 3 trang vậy mà là chuyên đề ? CONCLUSION 54

REFERENCES 55

STATUTORY DECLARATION

I herewith formally declare that I myself have written the submitted BachelorThesis independently I did not use any outside support except for the quoted literatureand other sources mentioned at the end of this paper

I clearly marked and separately listed all the literature and all other sourceswhich I employed producing this academic work, either literally or in content

Ha Noi, …/ 05/ 2020

Tran Tuan Kiet

LIST OF TABLES

Table 1.1: Quality standards for coal used in thermal power 35

Table 1.2: Quality standards for coal used in cement plants 36

Table 1.3: Quality standards of coke used for coke production 36

Table 1.4: Some countries and major suppliers supply imported goods to Vinacomin 37 Table 1.5 Import market structure of Vinacomin Import-Export Company 39

Table 1.6: Coal import types structure of Coalimex from 2017 to 2019 40

Table 1.7: Proportion of import formalities in the period 2017-2019 47

Table 1.8 Overall import business performance 48

Table 1.9 Import profit margin of the company from 2017-2019 49

Table 1.10: Efficiency indicators of working capital in the period 2017-2019 50

Table 1.11: Labor productivity of the company in the period of 2017-2019 51

LIST OF FIGURES Figure 1.1: Charter capital structure of Vinacomin 28

Figure 1.2: Organizational chart of Vinacomin Company's governance structure 32

Figure 1.3: Coal importation turnover of Coalimex from 2017 to 2019 41

Figure 1.4: Demand for imported coal products from 2017 to 2019 44

Figure 1.5 Coalimex's market share in three regions in 2018 and 2019 45

1 Rationale

The energy industry of Vietnam after 20 years of renovation and developmenthas made remarkable changes through its every step, contributing to building andrenewing the country, ensuring fuel resources for manufacturing sectors andconsumption sectors In the energy industry, we need to mention the essential fieldssuch as electricity, crude oil, gas, uranium, coal especially among the above areas,

we need to pay attention to the coal industry because this is considered as one ofVietnam's strengths when it is ranked 26th in coal exportation and 23rd in coalimportation in the world

Vinacomin coal import-export joint stock company, formerly known asCoalimex, is a company with extensive experience in the field of mineral coal inVietnam With the constantly growing trend of the economy and also with Vietnam'saccession to the World Trade Organization, the company has expanded its businessactivities in many areas such as coal import and export, importing materials andequipment, exporting labour, offices construction, renting buildings, …but coalimportation and exportation is still the number one priority of the company as itcontributes 80% of revenue Although the coal importation and exportation sector play

an important role for the company, most of the revenue in this field is fromVinacomin's coal exportation, which is understandable given that Vietnam is a countrywith the 3rd largest coal reserves in the world The company's coal importationefficiency is very limited by many different reasons Facing the difficult situationbecause of the world economy and the youngness of the domestic economy which isintegrating into the world, improving the efficiency of coal importation at Vinacomin

is extremely necessary For this reason, when practicing and learning about thebusiness process of the company, I would like to choose the topic "Improving theefficiency of coal importation at Vinacomin coal import-export joint stock company".Through the topic, I would like to offer some solutions and recommendations to helpthe company import coal more effectively and at the same time help businesses to have

an overview and assessment of the status of their imported coal business

2 Related literature review

In 2016, the thesis “Improving the efficiency of importing materials atC&T Construction and Trading Joint Stock Company” Ms Nguyen Thanh Thuyanalyzed the import activities of at C&T Construction and Trading Joint StockCompany but not in depth

In 2011, the thesis “Solutions to improve the efficiency of import andexport activities at Phu Mai Fiber Joint Stock Company “Mr Vo Ham Thinhshowed some solutions to improve import activities However, Phu Mai FiberJoint Stock Company is the company operating in the garment industry and theway they do import is different with Vinacomin Joint Stock company import

In 2012, the thesis “Enhancing business efficiency of Binh HoaElectronics Joint Stock company” Ms Nguyen Thi Hai Hoa pointed out theorganizational structure of the company but it is different from Vinacomin JointStock Company

In 2015, the thesis “enhancing the efficiency of importing machinery atMecanimex State-owned Limited Liability Company” Ms Vu Huong Lienprovided solutions and recommendations to enhance efficiency of importationbut Vinacomin is a Joint stock company which is different from MecanimexState-owned Limited Liability Company

In 2017, the thesis “ Improving efficiency of importing frozen food atIntimex Export-Import Joint Stock Company “Mr Tran Nhat Tan demonstratedthe same problem with Vinacomin company but the company size of IntimexExport-Import Joint Stock Company is smaller than Vinacomin company so in

my viewpoint I need to make it more accurate with the scale of Vinacomincompany

3 Research and objectives

3.1 Research goal

The thesis will be focusing on the study of the coal importationperformance at Vinacomin, assessing the efficiency of coal importation andtherefore proposing solutions to improve efficiency of coal import activities

3.2 objectives

Giving statistics on the situation of coal importation of Vinacomin coalimport-export company and assessing the status of business efficiency throughindicators

Through the above criteria and evaluation, propose solutions to improvethe efficiency of the company's coal importation and make recommendations tothe government

4 Research object and scopes

4.1 Research object

Propose solutions to improve efficiency of coal importation atVinacomin coal import-export company

 Quantitative method: Using statistics and surveys to calculate, analysisand compare about the situation of improving efficiency of coal importation atVinacomin Joint Stock company

 Qualitative method: From the results of the actual survey and theinterview, author make assessments and explain the results

6 Research structure

In addition to the introduction, conclusion, appendix and references, the maincontent of the thesis is divided into 3 chapters as follows:

Chapter 1: Theoretical framework of improving efficiency coal importation at

Vinacomin Joint Stock Company

Chapter 2: Situation of improving efficiency of coal importation at Vinacomin

Joint Stock Company from 2017 to 2019

Chapter 3: Suggested recommendation to improve efficiency of coal

importation activities at Vinacomin Joint Stock Company

CHAPTER 1: THEORETICAL FRAMEWORK OF IMPROVING EFFICIENCY IMPORTATION AT VINACOMIN JOINT STOCK COMPANY

1.1 Overview of import

1.1.1 Concept of import

It is unequivocal that imports are the components of international trade.Imports consist of transactions in goods and services of jurisdiction (such as anation) from non-residents Importation is the action of buying or acquiringproducts and services from another country to another nation The buyers ofgoods and services is referred to as “importers” and are based in the country ofimport

The national accounts provide a general delimitation of imports asbelow:

An import of good takes place when there is a shift of ownership fromnon-resident to a resident; this does not imply that the good in questionphysically crosses the borderline However, in specific cases national accountsimpute changes of ownership even though in legal terms of no change ofownership occur (e.g cross border financial leasing, cross border deliveriesbetween affiliates of the same enterprise, goods crossing the border forsignificant processing to order or repair)

In conclusion, import is one of the core activities in the internationaltrading business, the process of exchange goods between countries based on theprinciple of currency exchange or barter It is not a single act of trading butsystem of trading relationships in an economy that has both internal andexternal organizations Moreover, imports are foreign goods and servicesbought by residents of a country, including citizens, businesses, and thegovernment It doesn’t matter what the imports are or how they are sent.Imports are anything produced in a foreign country and sold to domesticresidents They can be shipped, sent by email, or even hand-carried in personalluggage on a plane

1.1.2 Characteristics and roles of import

1.1.2.1 Characteristics of import

 Market: The import markets are diverse, goods and services can be importedfrom many different countries, based on the comparative advantage of each country

that businesses have many opportunities to expand, narrow or change their importmarkets to adapt to the needs of the market

 Legal aspect: import activities involving owners, partners, business owners,companies in different countries, each country has different laws on economic andimport As a result, it bears the dominance of many legal systems and procedures and

is governed by the legal system, the filing procedures related to different countriesInput and output: Inputs (sources of supply in which the source of imports) and output(customer) of the business are diverse and often change according to the needs ofconsumers in the country and the business conditions of the company Transportationmodes: Depending on the type of goods, materials, equipment, agreements on bothsides that have different modes of transportation, which is often followed byINCOTERM and The Uniform Custom and Practice for Documentary Credits Somemain modes of transportation are airways, roadways, railways and seaways Theshipping and handling costs should be clearly stated in contracts to avoid affecting thebusiness performance of the business

 Methods of payment: In the import business, the parties use a variety ofpayment method such as: Cash-in-advance, Documentary collections, Consignmentand so on, which is agreed by the two parties and stipulated in the terms of thecontract However, the mainly used method of payment is letter of credit (L/C).Currency used in payment in import depends heavily on the exchange rate betweenlocal currency and foreign currency

1.1.2.2 Roles of import

Firstly, imports offset the shortage of demand due to inadequatedomestic production Moreover, imports also create new demands for societywith a variety of types, models, quality for the market It means that importscontribute to a positive balance between supply and demand in the domesticmarket to meet the needs of the imbalances of the economy, ensuring thedevelopment of a stable economy

Secondly, imports help the country exploit its comparative advantage,exploiting the economic advantage of economies of scale when participating ininternational trade Not only create more domestic consumption goods,importing but also create input materials for domestic production, creatingtechnology transfer As a result, it contributes to the development of socialproduction, saving costs and time, creating a uniform level of socio-economicdevelopment, saving costs and time, creating a uniform level of socio-economicdevelopment, contributing to the elimination of monopoly status in the country

Thirdly, imports increase competitiveness in the market with highlycompetitive imported products, creating new capacity in production Domesticenterprises have to face in a great competition, in order to survive they have to

be more active and rise As a result, the efficiency of domestic production hasbeen improved, domestic goods become more competitive, labors have moreopportunities to find jobs, thus contributing to improving the socio-economiclife

Finally, combined with exports, imports create a close relation betweendomestic

production and consumption and the world economy, facilitating internationaldivision

of labor development

1.1.3 Types of import

1.1.3.1 Direct import

Goods are purchased directly between seller and buyer without the help

of any intermediaries, the exporter sends the goods directly to the importer Inthe field of self-trading, the enterprise is in full control of itself and conduct theactivities of seeking partners, negotiating the signing of contracts and have toinvest their own capital of trading in imported goods and bear all transactioncosts, market research, freight forwarding, payment of goods and consumptiontax Enterprises shall have to pay their own capital for expenses incurred intheir business activities and gain all the profits earned as well as takeresponsibility for such losses if they suffer from losses When consuming theimport goods, the enterprise shall be liable to turnover tax and /or profit tax.When conducting the import under this method, endeavors must lead statisticalsurveying at home and abroad, completely figure costs, guarantee beneficialimport business, follow national legitimate approaches and universal

1.1.3.2 Indirect import

- Entrusted import

Entrusted import is one of indirect import activity, which formedbetween a domestic enterprise operating in the field of trading of someimported goods but failing to meet conditions on financial capability andbusiness partners The functions of direct foreign trade shall proceed to importgoods at their requests The consignee shall negotiate with the foreign party tocarry out the import procedures at the request of the consignor and be entitled to

a commission called the consignment fee The relationship between the trustee

and the trustee is fully regulated in the trust contract The trustee will pay a sum

of money to the trustee in the form of a trust fee, while the trustee is responsiblefor fulfilling the terms of the entrustment contract entered into between theparties This method helps enterprises to receive the trust does not take muchcost, low risk but profit from this activity is not high

 Barter import

Barter import is one of the main operations of convection trade, which is aform of importation for export This activity is not paid in money but in goods.Imported and exported goods are equally valued The purpose of import barter is notonly to gain profit from import but also to export goods and have income from export

- Joint ventures import

It is an activity of importing goods on the basis of economic integrationvoluntarily between enterprises, of which at least one party is a direct importingenterprise in order to coordinate skills for the same transaction and proposal Therights and responsibilities of each party shall be determined according to theproportion of their contributed capital Compared to self-employment, joint venturesare less risky because each joint venture enterprise imports only a portion of its capital,the rights and responsibilities of the parties also increase with the capital contribution.The cost sharing, the business imposes as per the extent of contributed capital, thebenefits separated by the two gatherings isolated relying upon the understanding inlight of contributed capital, in addition to the obligation of each side to bear.Moreover, enterprises that receive goods will be calculated import-export turnover.When selling goods for consumption, only the turnover on the number of goods shall

be calculated according to the capital contribution percentage and subject to turnovertax on such turnover

- Processing import

Processing is a form of import whereby the importer (being theprocessor) imports the raw materials from the exporter (the processor) to carryout the processing in accordance with the provisions of contract signed betweenthe two parties

- Import for re-export Import for re-export is the import of goods butnot for domestic consumption but for export to a third country for profit Theseimports are not prepared in the re-sent out nation Along these lines, thismethod of import is actualized through three nations: importing nation,exporting nation, re-exporting This transaction includes both import and exportfor the purpose of recovering the amount of foreign currency that is larger than

the original amount spent When conducting temporary import for re-export,enterprises must concurrently carry out two separate contracts, including thegoods purchase contract signed with the trader of the exporting country and thegoods sale contract signed with the trader of the importing country.

1.2 Theoretical background of business efficiency and business efficiency

of import activities

1.2.1 Conceptual definition of the business efficiency of import activities

1.2.1.1Concept of business efficiency

According to clause 16, article 4 of Law on Enterprises (2014) inVietnam stated that "Business means the continuous execution of one, some, orall of stages of the investment process such as manufacturing, selling products

or services on the market to earn profit." Therefore, in essence, all businessesseek to maximize their profits In Oxford University dictionary, efficient isdefined as accomplishing most extreme efficiency with least squanderedexertion or cost However, depending on the field of study, there are manydifferent opinions about business efficiency, which is divided into four basicgroups

At the first group, British economist Adam Smith (1998) said thatbusiness

efficiency is the result obtained in business operations, especially the sales of

this view, business efficiency is similar with business results and pointer reflectbusiness execution and it does not mention the cost, meaning that if thebusinesses have the same result, they are equally effective despite the fact thatoperations have two different cost levels

The second group believes that business efficiency illustrates therelative

proportion amongst results and expenses to accomplish that outcome Thebenefit of this view is that it mirrors the inherent idea of monetaryeffectiveness Be that as it may, the quantitative and subjective connectionsbetween the outcomes have not yet been shown and the level of linkage has notbeen completely reflected

The third group points out that business efficiency is the amountestimated by the exchange between the addition of the outcome got and theexpansion of the cost In this view, business execution is considered throughrelative uses and mirrors the relationship between the outcome acquired and the

cost spent, the development of business results and business costs In any case,the greatest inconvenience of this definition is that undertakings don't assess thebusiness execution in the usage time frame since they don't considerindisputably the level of business results and business costs As needs be, theexpansion of income might be considerably bigger than the increment in costsbut it cannot be presumed that the business is productive.

The fourth group says that business efficiency demonstrates therelationship

between the development of cost that makes the business result and mirror the

production resource utilization This point of view meets enough necessities ofbusiness proficiency like mirroring the correlation of development speedamongst results and expenses and demonstrates endeavors' capability ofutilizing resources

To sum up, business efficiency is the economic category which showsthe

concentration of economic development in depth, reflecting different levels of

of domestic consumers

1.2.1.2Concept of business efficiency of import activities

Import-export business is a form of business activity in general andrevolves around business activities, it is expanded in the space of exchange ofgoods and categories of goods Business efficiency of the import products isbased on the view of business efficiency in general Thus, the nature of importand export activities is the nature of the business Moreover, import business

efficiency is the level of cost savings and the increase in economic efficiencythat is specific to the import business in other word It reflects the level ofhuman resources used of to achieve the highest results at the lowest cost.Efficiency of importation of goods is a measure of the between the resultsobtained from the Import business and all costs incurred to achieve that result(including physical and labor costs)

In terms of business: business efficiency of import products is onlypossible to be gain with the return on maximum profit at minimal cost whichindicates the ability to use the resources necessary to serve the importingbusiness of the company

In Term of social: The business efficiency of import products is only beachieved when the aggregate social benefits of imprisonment for goods andservices are larger than the costs of' producing these goods and servicesdomestically, which means that importing has contributed to increasedefficiency social security, quality and reduce product's price

1.2.2 Business efficiency of import activities classification

1.2.2.1 Cost effective parts and cost-effective aggregation of import activities

Each enterprise conducts its business activities in the conditions of its ownresources: the level of technical equipment, the level of organization, labormanagement and business management By their ability, they provide the society withproducts at a certain cost and every businessman wants to consume his goods in themost quantity However, the market operates according to its own rules One of themost standout amongst the most evident market rules influencing the economy isadminister of law The market just acknowledges the normal social utilization required

to deliver a unit of merchandise Esteem law puts all organizations at various costlevels on a typical trade plane, which is the market cost In general, the cost of labor issocial labor, but for every business that evaluates business performance, the cost ofsocial labor is reflected in other types of expenses

The market is the place to decide the price of the product When importingbusiness enterprises, it is essential to guarantee the cost to be lower than the salesproducts in the market When assessing economic efficiency, social labor costs will berepresented by specific costs:

- Cost during the import operation

- Costs outside of the import operation

1.2.2.2 Absolute efficiency and relative efficiency of import activities

The determination of efficiency serves two basic purposes:

Firstly, to show and assess the utilization of various sorts of expenses inbusiness

Secondly, to dissect the monetary hypothesis of various options in the execution

- Relative efficiency is determined by a comparison of the absolute efficiency

of the options, or the difference in the absolute effectiveness of the alternatives This is

a fundamental base to decide the best import business plan

Determining the absolute effectiveness is the basis for determining the relativeefficiency However, there are relatively well-refined performance indicators that donot depend on the determination of absolute efficiency For example Comparing thecost of different options to the lowest cost option is essentially just a comparison of thecost of the options rather than the comparison of the cost effectiveness

1.2.3 Factors influencing the business efficiency of imports

1.2.3.1 Internal factors

 Financial resources

The financial resources of the enterprise can be: own capital, capital frommobilized sources, owner capital, or investment capital, etc In the business strategy,finance is a crucial factor in the existence, development and expansion of the company

Importers often have to borrow money to deposit, collateral or pay for importedgoods If the capital is limited, business will miss out on business opportunities,particularly while completing numerous agreements, the dissolvability of endeavors islow

 Human resources

Human is the center of all business, the key component of themanagement and have great influence on the success of the firm on the way ofdoing business Other than doing the employment to profit, people with ability

to utilize gear productively and refresh new innovation add to businesseffectiveness Besides, nature of their employments additionally depends ontheir insights to apply new developments that assistance them to run all themore successfully

 Corporate Governance

Corporate governance focuses on identifying a business right direction in

a changing business environment Quality of the business strategy is the firstand most vital factor deciding achievement success or failure of a business Agroup of officials, particularly senior administrators, who drives the business byprudence and ability has a part to play the most imperative, the definitiveimpact on the achievement of a business The outcomes and execution ofcorporate administration are exceedingly reliant on the expert level of theadministration group and in addition the authoritative structure of the corporateadministration

 Facilities

Facilities, from storage yards, transportation vehicles, office equipment,are the cornerstone of business operations, which can bring strength in business.The technical facilities provide the partner with trust, creating a competitiveadvantage with competitors

 Reputation

Business credibility is the decisive factor in the competitiveness andposition of the business If the function of entrusted import, when theprestigious enterprises will have many units in the country entrusted import forenterprises The goods of the business easier to consume than the business donot indecent, lose credibility with customer

1.2.3.2 External factor

 International environment

International political context:

International business first and foremost requires executives and businessman topay attention to international law, the laws of each country in which the business hasbeen and will operate Each country has its own legal systems to regulate internationalbusiness activities, including international trade law ( export, import of goods,services), foreign investment law, tax law Each country often sign agreements andtreaties and gradually form the business cooperation process on the basis of treaties oragreements True financial execution as of late has demonstrated that with the rise ofmonetary unions, traditions associations, political cooperation and respective ormultilateral assertions have developed, making positive conditions for exchangingbusiness in the district and global In the manner, it can be stated that it is just based on

a firm comprehension of the lawful arrangement of every nation and thatunderstandings between the new nations enable the business to settle on the correct

choices in the decision of nation, district, business frame, business things to expandbenefits while limiting risks.

International economic context:

Economic is factor that attracts the attention of all executives, the impact

of the elements of this environment is more direct and dynamic than some otherfactors of the general environment The evolution of the economic environmentalways contains opportunities and threats for businesses in different sectors andhas a potential impact on the strategies of the business

In the conditions of the globalization trend and the regionalization of theworld economy, international business especially import activity is increasinglyexpanded and developed, to adapt to this trend, enterprises must graduallyincrease their ability to adapt the new conditions of domestic and foreignbusiness environment In addition, the speed of economic development of thecountry reflects the market's ability to consume goods When a country has ahigh growth rate, the ability to consume goods on the market increases, thedemand for imports and the ability to exchange goods is also greater Inflationand deflation also affect the ability of the economy to participate ininternational trade, import and export of goods

International technology context:

Science and technology influence all zones of financial and bringnumerous advantages, especially in the field of import it is likely to bring highproficiency The development of science and technology in the world hasdiversified the categories of goods, created new goods as well as themodernization of the communication system Advanced technology allowsenterprises to actively raise high quality of goods, labor productivity and lowerproduction costs These factors have impact on the product aspects such asproduct characteristics, product prices and competitiveness of the product As aresult, businesses can increase their competitive ability, enhanced turnover ofworking On the contrary, if technical level is low, it would reduce thecompetitiveness of enterprises, hence, reduce the profit

 National Environment

Political context

Politics is the first element that investors and corporate executives careabout in order to forecast the level of safety in their operations in countries andareas where business is concerned Factors, for example, political shakiness orvacillations in a nation or district are starting signs that assistance chiefs

distinguish what the opportunity or risk to settle on speculation choices,creation and business in the market zone of national or universal

 Government stability

Political factors have a strong impact on imports If a country's political situation isunstable, with civil war or high rate of protest, import activity is limited becauseexporters are afraid of risk

 Foreign trade policy and the legislation across different countries

The policy regime, the law of the state are the factors that businesses ofimport and export are bound to be unconditional Enhancing import business isled among the subjects in different nations, therefore, it is not just influenced bythe administration, approaches and laws in the nation National laws arecommon practices or regulations that unify nations into common treaties,forcing states to adhere to all activities including commercial activity Inaddition, international laws prohibit countries from importing commodities thathave a negative impact on the community, such as drugs or nuclear weapons.Economical context

The economic environment determines the attractiveness of the importmarket The key factors in the economic environment of a country wherebusiness is often concerned are the level of economic growth, living standards,population structure and social stratification

 Tariff barrier

Tariff barrier are taxes levied on each unit of imports and exports of acountry, this is the most important measure to implement trade policy Importtax is the commitment that the business needs to pay to the state The dutyincluding VAT, import charge, extract impose, and so on, that influences thebenefit of the undertaking through the activity or lessen the aggregate cost withthe exception of benefit expense and pay impose, expanding the cost of

working together so the benefit of the business will be diminished.

 Growth rate of the economy

The economy in the high development time frame will have moreopportunities for venture to extend business exercises of endeavors, though theeconomy will diminish prompting decrease of utilization costs, at the same timerise the aggressive power

 Inflation

High or low inflation would affect the rate of investment in the economy.When inflation is too high it will not encourage savings and create big risks forbusinesses' inflation is too high it will not encourage savings and create bigrisks for businesses' investment, the purchasing power of society will bereduced and the economy will be stagnant

Social and cultural context

Natural conditions include geographical location, climate, natural landscape,these factors are not only vital in human life but also important factor inshaping the ntext: competitive advantage of products and services Moreover,each country has its own unique culture and social environment

- Demographic population

Population has impact on different components of the full-scale condition,particularly social elements and monetary variables Changes in the populacecondition will straightforwardly influence the difference in the financial andsocial condition and influence the business methodology of the business

- Geographical location

Geographic location is a critical factor for economic development as well asfor import and export activity of a country, Favorable geographical location is acondition for a country to take advantage of international labor allocation, or topromote the import and export of services such as tourism, transport

 Natural resources

Natural resources are one of the important factors that underpin national andregional structures for import and export It affects the type of goods, the size ofimports and exports of the country

 Natural condition

These natural conditions such as weather, climate, and season have greatlyaffected the technological process and business progress of enterprises,especially enterprises deal in importing seasonal items such as agriculture,

forestry, fishery With the weather conditions, climate and certain crops, thebusiness must have specific policies suitable to that condition And when suchfactors are unstable, it will make the business policy of the business is notstable and is the first factor destabilizing business directly affect businessperformance.

1.3 Theorical background on improving the business efficiency of import activities

1.3.1 The necessity to improve business efficiency of import activities

 Scarcity of production possibility urges the enhancement of businessefficiency of import activities

The needs of resources is accelerating rapidly while the socialproduction resources are limited Because the market only accepts the right kind

of products with the right quantity and quality, the rule of scarcity requires allbusinesses to answer exactly three questions: What produce? How to produce?Who to produce? In order to see the necessity of improving business efficiencyfor enterprises in the market economy, we first have to study the marketmechanism and operation of enterprises in the market mechanism

For enterprises engaged in import activities, the resources used are theamount of foreign currency spent, time and labor In the event that the firm doesnot utilize resources monetarily, at that point the cost of contributions forimports builds, prompting expanded costs for organizations to meet difficulties

in production and consumption

 Fierce competitive market

Competitive environment requires enterprises to explore and invest inmaking progress in business As the market grows, the competition betweenbusinesses is getting fiercer It is no longer competitive in products but also interms of quality, price and other factors While the general target of the business

is maximize the profit, rivalry is a factor that drives the business up but viceversa it is likely to make the business does not exist competition in the market.Therefore, they must provide goods and services of good quality at reasonableprice On the other hand, business efficiency is synonymous with reduce thecost of increasing the volume of goods sold, the quality is constantly in themarket To achieve the goal of survival and expansion, enterprises must win theimproved

 Improvement in living standards and mental health of employees

When business efficiency is enhanced, enterprises have the opportunity

to develop and increase the number of new occupations In addition to, theproductivity of import exercises specifically is a fundamental condition forventures to survive and create, if the proficiency of import exercises iscontinually enhanced, the outcomes acquired increasingly, this implies the wage

of the specialists additionally increments At the point when specialists havehigh pay, they will have conditions to deal with material and profound life forthemselves and their families

1.3.2 Measures to enhance the business efficiency of import activities

1.3.2.1 Measures to increase revenue

Increasing sales is one of the essential approaches to enhance businessproficiency for all organizations in general and import organizationsspecifically Businesses need to find a way to boost up output or in other word,the company needs to sell more products or sell products at a higher price

Develop a sound business strategy and plan that is appropriate tobusiness situation The right strategy and business plan allow the business toshape the direction that the business is going to achieve in the future and itallows the company to make the most of resources, contributing to the increase

of profit

Develop and implement marketing plans and policies, promote researchand explore the market to understand the needs of customers Theimplementation of marketing plans and policies: product policy, price policy,promotion policy, distribution policy along with the promotion of marketresearch and marketing, contributing to increase the efficiency of businessoperation

1.3.2.2 Measures to reduce the cost

Cost of production is one of the main determinants of profit and price ofthe products, cutting unnecessary costs would increase profits and reduceproduct costs, hence, enhance the business performance Therefore, costmanagement is a top concern for managers

Cut down on cost of raw materials, for instance, price fluctuationsdepend on both objective (changing supply and demand in the market, changes

in government policy ) and subjective reasons (choosing quality of goods,calculation method price of raw materials and warehouse) Volatility of rawmaterials used depends on the level of management of raw materials, skills ofworkers directly producing, status of operation of machinery and equipment,

conditions of production Raw materials account for a very large proportion ofproduction costs of manufacturing enterprises usually about 60 - 70%.

Improving labor productivity can cause the quantity of hours spent todeliver a unit of item to be decreased or to influence the unit of work in a unit

of time to be expanded The consequence of enhancing work profitability willbring down the cost of wages per unit of item In addition to, raising theprofessional level of all employees in the enterprise, arranging jobs suitable tothe professional qualifications of each person, well labor efficiency,incompletely to expand compensation, another part to build the benefit of thebusiness This can both guarantee creation and enhance the expectations forimplementing salary levy and bonus Creation comes about because of theexpansion in everyday comforts of workers

1.3.2.3 Measures to increase revenue growth rate faster than increase rate

Enhance work productivity in actuality, not very many organizations cancarry out the activity of lessening input costs without affecting the output andvice versa, so the ideal arrangement is ventures are searching for measures toaccelerate income development quicker than the increase rate of cost

The business structure of the enterprise affects the consumption of goodsand services of enterprises Therefore, in order to increase the profitability, theenterprise must choose a suitable business structure in terms of quantity anddensity of goods in the structure to promote the strengths of enterprises, attractcustomers to businesses Choosing the right business line structure in line withthe segmentation of the consumer market that the company has selected alongwith the implementation of the marketing plan to attract customers will bringsuccess to the business

1.3.3 The criteria to assess enhancing business efficiency of import activities

1.3.3.1 Indicators reflect the efficiency of integrated import business

 Absolute indicator

Import profit = Import revenue – Import CostsImport profit is the company's profits from import activities in a given period Thequotas indicate the results of the import business process It reflects the quantity andquality of import activities of enterprises, reflecting the results of the use of basicelements of production such as labor, materials and fixed assets This indicator reflects

the financial gain earned through the efficiency of the importation of goods andservices by direct comparison of the results with costs in a given period

 Relative indicator

 Business performance according to turnover

Import efficiency = Import revenue Import costs

This indicator shows how much revenue is earned for each dollar spent onimport The large indicator demonstrates that businesses have effectively utilized theirresources and vice versa

 Profit margin at revenue

Profit margin at revenue = Import revenue Import profit

This indicator shows how much import income is earned in a given importrevenue The higher the number, the greater the profitability of capital

 Profit margin at cost

Profit margin at cost = Import profit Import costs

This indicator shows how much profit is earned for every dollar of cost spent onimport activities The large indicator shows that high profitability and low cost

 Profit margin at capital

Profit margin at capital = Import capital Import profit

This indicator shows how much profit is earned for every dollar ofequity spent on import activities The vast marker shows that organizationshave adequately used their assets and the other way around

 Import rate of foreign currency

Import rate of foreign currency = Import revenue(Home currency) Import Costs(Foreigncurrency )

This indicator illustrates the amount of foreign currency earned for everyhome currency spent on import activities

1.3.3.2 Indicators reflect each parts of business efficiency

 Capital performance indicators

The business capital of an undertaking is the entire property of theendeavor expressed in cash, comparing to two kinds of advantages, we havetwo sorts of capital: Fixed capital and Working capital

- Efficiency of using imported fixed capital:

Imported fixed capital efficiency = Import revenue Imported

¿ capital¿

This indicator shows that one dong of fixed capital is put intoimport activities, how much profit earned The higher the number the higher theefficiency of using fixed capital in the company

- Efficiency of using working capital

Imported working capital efficiency = Imported working capital Import profit

This indicator indicates that one working capital is invested inimport activities, how much profit earned The higher the number the higher theefficiency of using working capital in the company

- Number of revolutions of capital

Number of revolutions of capital = Imported working capital Import revenue

This indicator shows that one working capital is put resources intoimport exercises how much income is earned or what number of rounds ofcapital are included portable The more noteworthy the quantity of turns, themore noteworthy the productivity of working capital

- Coefficient of capital

Coefficient of capital = Imported workingcapital Imported revenue

This indicator shows the amount of working capital needed to createone dong of revenue The lower the coefficient, the higher the efficiency ofcapital use

- Turnaround time

Turnaround time = Number of revolutions of capital360

This indicator reflects the number of days needed for workingcapital to be credited back to the import business The longer the gravidityturns, the greater the transfer speed, the higher the import efficiency and viceversa

- Total imported capital turnover

Total imported capital turnover = Imported capital Import revenue

This indicator describes the amount of revenue gained on each ofdollar capital invested in import activities or the number of imported capitalturnover

 Human resource performance indicators

Labor is an immediate member in the financial improvement processand is a fundamental piece of working-age individuals who can work in thework drive

- Profitability of a worker engaged in import activities

Average profitability of labor = Employees∈import activities Import profit

This indicator shows how much profit is generated for eachemployee involved in analyzed period The bigger the indicator, the higher theefficiency of employment

- Labor productivity

Average labor productivity = Employees∈import activities Import revenue

This indicator illustrates the amount of revenue gained for each employee involved in the analyzed period The greater the pointer, the higher the productivity of work

CHAPTER 2: SITUATION OF IMPROVING

EFFICIENCY OF COAL IMPORTATION AT

VINACOMIN JOINT STOCK COMPANY

FROM 2017 TO 2019

2.1 Overview of Vinacomin Joint Stock Company

2.1.1 Establishment and development

General information of the company:

Company name ( Vietnamese ): Công ty cổ phần xuất nhập khẩu than Vinacomin

Company name ( English ): Vinacomin – Coal Import and Export Joint Stock company

Email: coalimex@fpt.vn; coalimex@hn.vnn.vn

Website: www.coalimex.vn; www.coalimex.com

Authorized Capital: 48.275.600.000 VND (Forty eight billion two

hundred and seventy five million and six hundred thousand dong)

Capital Structure:

The company operates in the name of equitization, the majority state equity is shown as follows:

Figure 1.1: Charter capital structure of Vinacomin

Chart Title State-owned capital

Company staff Other Shareholders

(Source:General financial report of Vinacomin in 2019 )The current charter capital of the company is 48.275.600.000 VND offwhich the equity structure is divided as follows:

 Value of issued shares: VND 48,275,600,000 (Forty-eight billion and twohundred seventy-five million six hundred thousand dong)

 State-owned capital: VND 24,620,500,000, accounting for 52% of chartercapital and equal to 52% of the value of issued shares

 Capital from officials and employees in the company is 12,550,000,000VND, accounting for 26.2% of charter capital and 26.2% of the value of issued shares

 Capital owned by shareholders are legal entities and other natural persons:VND 22,400,100,000, accounting for 21.8% of the charter capital, equal to 21.8% ofthe value of issued shares

Therefore, Vinacomin Import and Export Joint Stock Companyoperates in the form of a state shareholding, which is the dominant share in thecharter capital increase and decrease decided by the General Meeting ofShareholders and by state agencies right to decide

2.1.1.1 Establishment and development history

Vinacomin Coal Import-Export Joint Stock Company was established onJanuary 1, 1982 on the basis of transferring the Materials Company under the Ministry

of Electricity to establish Coal Import-Export and Material Supply Company(Coalimex) (under Ministry of Mines and Coal, then under Ministry of Energy, nowMinistry of Industry and Trade) In each stage of its development, the company wasrenamed to COALIMEX The company has been operating for 38 years The companyhistory is divided into 03 periods, each marking a step of continuous development andinnovation of the company, in accordance with the change of the country and thedevelopment of the Coal - Mineral industry During its establishment anddevelopment, Vinacomin Coal Import-Export Joint Stock Company has experienced 3important transformation stages, gradually turning the company into a business with adominant position in the market of operating enterprises in the energy industry inVietnam:

• 1982 - 1994: Coal Import Export and Material Supply Company (Coalimex)

- The company was established on 01/01/1982 with the name of CoalImport Export and Material Supply Company - Coalimex

- The company's head office is located at 54 Hai Ba Trung Street, HoanKiem District, Hanoi From 1984 moved to address 47 Quang Trung Street,Hoan Kiem, Hanoi

- The main business task is: coal export; import, supply of materials

- equipment, processing orders in the country; Supplying mine chemicals(industrial explosive materials)

• 1995 - 2004: Import and Export Company and International Cooperation (Coalimex) is a member of Vietnam Coal Corporation is now Vietnam Coal - Mineral Industry Group.

- In 1995, after establishing the Corporation, Coalimex became asubsidiary of Vietnam Coal Corporation and changed its name to Import Exportand International Cooperation Company (Coalimex)

- The main business tasks are still maintained However, the Companystopped processing domestic orders and supplied industrial explosives andsupplemented with labor export business

• 2005 - present: Vietnam Coal Import Export Joint Stock Company

Coalimex Now it is Coal Import and Export Joint Stock Company Vinacomin (Coalimex), operating under the model of a State-owned joint stock company (Coal Industry Group) - Minerals of Vietnam) holds a controlling stake

In 2005, the Company was equitized, the Government held a dominantshare

- In addition to the business mission as in the previous period, thecompany expanded its business to build offices for renting, exporting someother non-coal mineral products such as sand, clinker, agricultural products andfrom 2010, the company coal imports for electricity industry and cementproduction

During this period, the company changed its name twice in accordancewith the development mechanism of Vietnam Coal and Mineral IndustryGroup:

- In 2007, the Company changed its name to Coal - TKV Import ExportJoint Stock Company (abbreviated as V-Coalimex)

From October 2010 up to now, the company's name is Vinacomin Coal Import and Export Joint Stock Company; The transaction name andabbreviated name of the Company was changed to Coalimex

-According to the long-term business development orientation, Coalimexwill focus on developing from a purely commercial business unit to a companywith expanded business operations in the direction of: Trade - Investment -Services In addition to the main business lines of coal export, equipmentimportation, labor export and office leasing business, the Company is actively

deploying new business activities such as coal import, Aluminum exports,production investments and other business activities.

2.1.1.2 Business Field

Vinacomin - Coalimex Import Export Joint Stock Company (Coalimex)

is a multidisciplinary manufacturing and trading company with relationshipswith more than 100 production, trade and service organizations in manycountries and territories around the world Vinacomin coal import-export jointstock company operates in many fields but coal import and export still hold animportant position when contributing up to 80% of the company's revenue.Besides the main field of coal import and export, the company also operates inthe following areas:

- Importing materials and equipment

- Labor export

- Office real estate business

- Other fields such as freight services; Services of leasing equipment,machinery and consignment of goods; Port and warehouse services; Ground filling;Producing and processing coal - minerals; Trading in fresh, frozen and aquaticproducts; Other consumer goods

Coalimex's international trade and economic cooperation activities arerecognized as a business unit by the Government agencies, the Government,domestic and foreign enterprises, foreign customers and commercial banks.Highly professional business and a reliable partner

2.1.1.3 Organizational structure

Vinacomin is organized based on the Enterprise Law, relevant laws andthe Company's charter approved and approved by the General Meeting ofShareholders The General Meeting of Shareholders includes all shareholderswith the right to attend the meeting and to vote, through decisions within theirauthority, by voting at meetings or collecting written opinions This is thehighest management body in the company, the company is run by the directorand deputy directors appointed by the board of directors and has 3 specializeddepartments: the general administrative department, the material equipmentroom investment, investment project bureau The Company's administrationapparatus must comply with the following principles:

Management principles of the company:

- The company operates on the principle of equality, voluntariness,democracy and always comply with the law