Improving business performance at petrolimex chemicals limited company

Improving business performance At petrolimex chemicals limited company The business of solvents and industrial chemicals is an area that our Party and State always pay attention to, considering this to be a key, key development investment focus. Over the past years, the business of solvents and industrial chemicals has contributed to the countrys industrialization and modernization, stabilizing social security, and supporting much other industrys development. The production and business units in solvents and industrial chemicals provide a large portion of raw materials and fuels for social life and, more importantly, supply raw materials. Input materials are indispensable for other industries. Therefore, the business of solvents, industrial chemicals must continuously be renewed and perfected. Through the thesis “Improving business performance at Petrolimex Chemicals Limited Company,” the author gave the following issues: Firstly, it generalizes the theory of improving business performance in the enterprise by analyzing the performance evaluation criteria such as profitability, capital, labor efficiency evaluation criteria, cost

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN HẢI LONG

NÂNG CAO HIỆU QUẢ HOẠT ĐỘNG KINH DOANH CỦA

CÔNG TY TNHH HÓA CHẤT PETROLIMEX

IMPROVING BUSINESS PERFORMANCE

AT PETROLIMEX CHEMICALS LIMITED COMPANY

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2020

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

NGUYỄN HẢI LONG

NÂNG CAO HIỆU QUẢ HOẠT ĐỘNG KINH DOANH CỦA

CÔNG TY TNHH HÓA CHẤT PETROLIMEX

IMPROVING BUSINESS PERFORMANCE

AT PETROLIMEX CHEMICALS LIMITED COMPANY

Chuyên ngành: Quản trị kinh doanh

Mã số: 8340101.01

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS HOÀNG ĐÌNH PHI

HÀ NỘI - 2020

DECLARATION

The author confirms that the thesis's research outcomes result from the author's independent work during the study and research period, and it is not yet published in other's research and article

The other's research results and documentation (extraction, table, figure, formula, and another document) used in the thesis are correctly cited, and permission (if required) is given

The author is responsible for the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for the declaration mentioned above

ACKNOWLEDGEMENTS

First of all, I would like to express my sincere thanks to Assoc Prof Dr Hoang Dinh Phi, for his patience, motivation, inspiration, passion, and vast knowledge, continuously supporting me throughout the study course and thesis research

Besides the primary instructor, I would like to thank the HSB faculty and support staff to study and research my thesis

I want to thank the Board of Directors of Petrolimex Chemical Co., Ltd., and my colleagues for creating all conditions for me to implement the topic and use the unit's data

to complete the article

Mainly, I would like to thank my family for all the support and encouragement during this Master's course and in my life

Hanoi June 30 th , 2020

NGUYEN HAI LONG

TABLE OF CONTENT DECLARATION

ACKNOWLEDGEMENTS

LIST OF ABBREVIATIONS

LIST OF TABLES, CHARTS, AND DIAGRAMS

INTRODUCTION 6

1 The urgency of the topic 1

2 The research objectives of the topic 2

3 Object and scope of the study 2

4 Research question 2

5 Research methods 3

5.1 Data collection methods 3

5.2 Data analysis method 4

6 The significance of the topic 5

7 Structure of the topic 6

CHAPTER I: THEORETICAL BASIS OF BUSINESS PERFORMANCE 7

1.1 Overview of business performance 7

1.1.1 The concept of business performance 7

1.1.2 Distinguish between business performance and results 8

1.1.3 The persuasive nature of business operations 8

1.1.4 Classification of business performance 10

1.1.5 The Necessity and Meaning of Improving Business Operations 11

1.2 Content and consumption indicators in business performance analysis 12

1.2.1 Content analysis of business results 12

1.2.2 Overall effect 14

1.3 Evaluate the efficiency of input resources 15

1.3.1 Effective use of Labor 15

1.3.2 Effective use of fixed assets 15

1.3.3 Effective use of liquid assets 15

1.4 Factors affecting business performance 16

1.5 Content and analytical methods 16

1.5.1 Content analysis 16

1.5.2 Analytical method 17

1.6 Directions and measures to improve business performance 21

CHAPTER II BUSINESS PERFORMANCE ANALYSIS OF PETROLIMEX CHEMICALS COMPANY LTD 24

2.1 Overview of Petrolimex Chemicals Company Limited 24

2.1.1 History and development of Petrolimex Chemicals Company Limited 24

2.1.2 Characteristics of business activities at Petrolimex Chemicals Company Limited 24

2.1.3 Organizational and managerial characteristics at Petrolimex Chemicals Company Limited 25

2.2 Overview of industrial chemicals and industrial chemical business activities 28

2.2.1 Characteristics of chemical products and industrial chemical business 28

2.2.2 Characteristics of industrial chemical trading 30

2.3 Analyzing the business performance of Petrolimex Chemical Co., Ltd in the period 2017-2019 30

2.3.1 Overview of production and business results of Petrolimex Chemical Co., Ltd in the period 2017-2019 30

2.3.2 Analysis of general financial indicators of Petrlimex Chemical Co., Ltd in the period 2017-2019 37

2.3.3 Analysis of other primary financial ratios of Petrolimex Co., Ltd in the period 2017-2019 45

2.3.4 Analysis of the results of investment in the construction of technical materials of Petrolimex Chemical Co., Ltd in the period 2017-2019 49

2.3.5 Classification of salary and income of officers and employees of Petrolimex Chemicals Co., Ltd in the period 2017-2019 52

2.4 Analysis of the criteria for evaluating the business performance of Petrolimex Chemical Company Limited from 2017 to 2019 55

2.4.1 Evaluate the effectiveness of profitability 55

2.4.2 Evaluate the efficiency of using assets 56

2.4.3 Evaluate the efficiency of capital use 58

2.4.4 Evaluate the efficiency of cost use 59

2.4.5 Evaluation of the efficiency of labor use 60

CHAPTER III: SOLUTIONS TO IMPROVE BUSINESS PERFORMANCE

OF PETROLIMEX CHEMICALS COMPANY LIMITED 62

3.1 Development orientation of Petrolimex Chemicals Co., Ltd in the future 62

3.1.1 The main goals of the company 62

3.1.2 Medium and long term development strategy 62

3.2 Several solutions to improve the business performance of Petrolimex Chemicals Co., Ltd 63

3.2.1 Solution to increase revenue 63

3.2.2 The solution to increasing cost-efficiency 66

3.2.3 The solution to increasing the efficiency of labor use 68

3.2.4 The solution to increasing the efficiency of capital use 69

3.2.5 Solution on risk management 72

3.3 Some recommendations for effective implementation of the above solutions 73

CONCLUSION 74

LIST OF REFERENCES 76

APPENDIX 1 1

APPENDIX 2 18

LIST OF TABLES, CHARTS, AND DIAGRAMS

LIST OF TABLES

Table 2 1: Output structure of the company's key business items from 2017 to 2019 30Table 2 2: Summary of business performance of Petrolimex Chemical Company Limited

in the period of 2017 - 2019 32Table 2 3: The Company's assets and capital sources in the period 2016-2019 38Table 2 6: Other primary financial ratios of the company in the period 2017-2019 46Table 2 9: Results of the company's construction of technical materials from 2017 to 2019 49Table 2 10: Salary and income of the company's officers and employees from 2017 to

2019 52Table 2 11: Indicators reflecting the profitability of the company from 2017 to 2019 55Table 2 12: Indicators for evaluating the efficiency of using assets of the company from

2017 to 2019 56Table 2 13: Indicators for evaluating the efficiency of the company's capital use from 2017

- 2019 58Table 2 14: Indicators for evaluating the efficiency of cost management of the company from 2017 to 2019 59Table 2 15: Indicators for evaluating the efficiency of the company's labor use from 2017

to 2019 60 Table 3 1: Plan for the year 2021-2025 of Petrolimex Chemical Company Limited 62

LIST OF CHARTS

Chart 2 1: Sales structure of essential business products of the company from 2017 to

2019 31Chart 2 2: Indicators reflecting the profitability of the company from 2017 to 2019 56Chart 2 3: Indicators for evaluating the efficiency of using assets of the company from 2017 to

2019 58Chart 2 4: Indicators for evaluating the efficiency of the company's capital use from 2017

to 2019 59Chart 2 5: Indicators for evaluating the efficiency of cost management of the company from 2017 to 2019 60

Chart 2 6: Indicators for evaluating the efficiency of using the labor of the company for

the period 2017 to 2019 61

LIST OF DIAGRAMS Diagram 2 1: Organizational chart of Petrolimex Chemical Company Limited 27

Diagram 2 2: Organizational chart of the Chemical Business Department 27

Diagram 2 3: Sales process of Petrolimex Chemical Company Limited 2

Diagram 2 4: Domestic purchase process of Petrolimex Chemical Company Limited 7

Diagram 2 5: The import process of Petrolimex Chemical Co., Ltd 11

Diagram 2 6: The management process of suppliers and contractors of Petrolimex Chemical Company Limited 15

INTRODUCTION

1 The urgency of the topic

Today, globalization and international economic integration bring new business opportunities They also pose many challenges that threaten the development of Vietnam's economy in general and businesses' survival According to the World Bank, Vietnam is one of the developing countries moving to a market-oriented economy with open economic policies and strategies to participate in international economic integration The development of the market-oriented economy has a significant impact on Vietnam's economy in general and enterprises in particular, which is even more profound in international competitiveness to attract customers and scale up the business domestically

and internationally

In a market-oriented economy, domestic enterprises must manage their production and business activities effectively to maintain and grow in the market once there is no government protection It is always a challenge for entrepreneurs to frequently do market research and find out the best way to thrive and generate profits It involves expanding business scale, improving employee's quality of life, applying advanced technology, allocating resources efficiently, and promoting international integration These all set the foundation for sustainable development, which is crucial for a business to maintain and grow Solvents and industrial chemicals play a significant role in the economy as the price

of solvents and industrial chemicals significantly impacts many other goods' input prices They are mostly determined by the law of supply and demand in the market The cost of solvents and industrial chemicals also depends heavily on the oil price on the world market The solvent and industrial chemical businesses are completely proactive in deciding their business outcomes, not regulated to the government's selling prices like

petroleum businesses

For enterprises operating in the solvent and industrial chemical business, they must show their pioneering role in integrating into the platform, which is continuously changing within the regions and worldwide In that context, Petrolimex Chemical Co., Ltd has quickly seized the opportunity, renovated its organizational structure and operation Thereby, the company can proliferate, make significant contributions to the chemical business, industrial solvents in particular, and the national economy To make this happen, measures that help to improve business performance are essential at this time Facing many difficulties and challenges, improving business performance is vital, which is always the

company's top priority It is a fundamental goal for the existence and development of the company Therefore, the company strives to research and adjust its operation direction, promote product consumption, effectively use production factors, and study the influence, the level, and the tendency of each factor Recognizing the importance of improving the performance of production and business activities for each enterprise, the author chose the topic "Improving business performance at Petrolimex Chemicals Limited Company" as the

dissertation theme

2 The research objectives of the topic

The goal of the topic is to:

- Systematize the theoretical basis of business performance in general

- Analyzing and assessing the current status of the business performance of Petrolimex Chemical Co., Ltd from 2017 to 2019 From there, find out the existing aspects

that affect the business performance of Petrolimex Chemical Co., Ltd

- Proposing some solutions to improve the business performance of Petrolimex

Chemical Co., Ltd in the future

3 Object and scope of the study

- The object of study: issues related to the business performance of Petrolimex

Chemical Company Limited

- Research scope:

+ Regarding the content: Analyze and evaluate the business performance of Petrolimex Chemical Co., Ltd from 2017 to 2019, point out the weaknesses, opportunities, and challenges of the company in the period 2017-2019; now, propose some solutions to

improve the business performance of Petrolimex Chemical Company Limited

+ About space: Thesis researching business performance at Petrolimex Chemical

Company Limited

+ About time: Evaluate the business performance of Petrolimex Chemical Co., Ltd

in the period 2017-2019, propose orientation and solutions for development in the period

of 2021-2025

4 Research question

The research of the topic aims to answer the following in-depth questions:

- How was the business performance of Petrolimex Chemical Co., Ltd in the

period 2017-2019?

- What are the shortcomings in the chemical business, industrial solvents of

Petrolimex Chemical Co., Ltd over the past years?

- What solutions to adopt to contribute to improving the business performance at

Petrolimex Chemical Co., Ltd?

5 Research methods

5.1 Data collection methods

The thesis surveys the current status of Petrolimex Chemical Co., Ltd from 2017 to 2019

❖ Data source

Data used in the thesis is mainly secondary data, including:

- Decrees, Decisions, Circulars of the Government, ministries, departments, and branches related to the operation of enterprises in general, industrial chemicals and

solvents businesses in particular;

- Scientific works and domestic and foreign research works related to the business

performance of the enterprise;

- Other documents related to natural conditions such as geographical location,

population distribution, infrastructure, business environment, etc in the study area;

- The data related to the research process of the topic has been officially announced The data includes: relevant research results that have been conducted previously, data related to the business activities of companies in the industrial chemical

and solvent trading sector;

- Financial reports and reports on business strategies, tasks, and development

projects of Petrolimex Chemical Co., Ltd in 2017-2019

❖ Methods of data collection

Methods of collecting secondary data are done through the following ways:

- Study, search by keywords, inherit datasets of previous studies from Statistical Yearbook sources, Ministry of Finance, Ministry of Planning and Investment, Ministry of Labor - Invalids - Social Affairs, books, magazines such as Economic development magazine, banking magazine, Finance magazine, Research and exchange magazine, and other journals; Dataset of previous studies related to the topic; legal documents about business performance such as Decrees, Circulars, Decisions, etc of the Government and

relevant agencies

- Direct observation method: through observing the production and business

operation at Petrolimex Chemical Company Limited

5.2 Data analysis method

The thesis uses some information analysis methods to evaluate the business

performance of Petrolimex Chemical Co., Ltd from 2017 to 2019 as follows:

❖ Statistical analysis method

- Statistical analysis synthesizes a specific nature of socio-economic phenomena and processes in certain historical conditions through numerical manifestations In particular, statistical analysis determines the variation's level, expressing the unique relationship's nature and level Statistical analysis must take statistics as a document, using

statistical methods as a research tool

- Statistical analysis is of great importance in the economic management process Thanks to rich theory and methodology, statistics can map out the causes of the completion

of the plan and the management decisions; analyze the effects of factors on resource use,

and determine the relationships and the general rule of the system

In statistical analysis, the system requires an approach in both directions: analysis

and synthesis

❖ Method of comparison

- A method of considering an analytical indicator based on the comparison with a baseline (first indicator) It is the most commonly used method to analyze business activities and analyze and forecast socio-economic indicators in the macroeconomic field This method compares the data over time with each type of chemical products, solvents, and different market segmentation) to determine the trends and fluctuations of analytical indicators It helps to synthesize documents, calculate the correct criteria, and help the document analysis be scientific, objective, and adequately reflect the critical content

research

- After synthesizing the data, we compare data between years, thus making comments and evaluations through the results of synthesis and calculation of data on the business performance of industrial chemicals and solvents at Petrolimex Chemical Co.,

Ltd in the period 2017-2019 The dissertation using the specific comparison method is:

- Absolute numerical method: The difference between two criteria: analysis period

and primary indicator

Comparative numerical method: A percentage of the analysis period index compared to the first indicator shows the completion level or the absolute difference rate

compared to the first criterion to know the growth rate

The comparison method allows us to accurately assess the growth or decline of the indicators representing the company's business performance, thus making comments on the

business's right and wrong sides at Petrolimex Chemical Company Limited

6 The significance of the topic

Improving business performance has been mentioned in many previous studies by domestic and foreign authors For example, in his research, the author Truong Thanh Tu (2010) has researched and proposed some solutions to improve service business performance on VNPT Hanoi's fixed telephone network The author focuses on providing solutions to improve business performance on a fixed-line fixed network, to keep existing customers, attract new customers, and increase revenue for service providers All these solutions aim to improve business performance for the unit [1] The author Vo Viet Chuong (2015) again focused on improving the business performance of the Joint Stock Commercial Bank for Investment and Development of Vietnam - Ha Tinh Branch The author of Chuong also focuses on providing solutions to develop the network and improve Marketing activities, diversify and improve the quality of products and services, improve credit quality to reduce risks, contribute to the increased signal Business results for businesses [2] Recently, the author Doan Thi Nhat Hong (2014) offers some solutions to improve the business performance of SIMCO Song Da Joint Stock Company The author proposes that the Song Da Joint Stock Company should complete the capital structure, and use reasonable costs, improve the qualifications and capacity of human resources, improve the quality of equipment - technology all contribute part to improve the performance of the unit in the future [3] The author Le Thi Hoa (2016) again studies the problem of improving the performance of production and business at Tam Chien Company Limited The author believes that the application of cost-effective, reasonable and efficient use of input factors and the survey to expand the market, boost consumption will help the Company to be more successful in the future It is also a factor that helps increase the business performance of the Company [4]

In general, the above studies have achieved certain results such as providing a theoretical system for the field they researched, analyzing the current situation of use, administration, and business performance at the unit and enterprise Many solutions to improve the performance of using human resources for their units/businesses Solution groups focus on improving cost management, saving input costs, increasing revenue

At Petrolimex Chemical Co., Ltd., in recent years, there have been some researches

on enterprises, but these studies focus on market expansion or analysis to offer solutions to

improve business performance In the coming time, there is no research to analyze the current situation and propose solutions to improve business performance for the unit Therefore, the author has chosen this study with the desire to make a small contribution to the Company by analyzing and offering some solutions to improve business performance for Petrolimex Chemical Co., Ltd shortly

In terms of science: The topic has systematized a relatively complete theoretical basis of business performance in the enterprise In practical terms: The issue has been analyzed in-depth, assessed the current status of the company which is the production and business performance in the period 2017-2019, from which proposed appropriate and highly feasible measures improve the performance of the production process and business activities of the company in the coming years

7 Structure of the topic

In addition to the introduction and conclusion, the thesis includes three chapters:

Chapter I: THEORETICAL BASIS OF BUSINESS PERFORMANCE

Chapter II: BUSINESS PERFORMANCE ANALYSIS OF PETROLIMEX CHEMICAL COMPANY LIMITED

Chapter III: SOLUTIONS TO IMPROVE BUSINESS PERFORMANCE OF PETROLIMEX CHEMICAL COMPANY LTD

Due to the limitations of time, capacity, and qualifications, this thesis still has room for improvement We hope that the instructor's suggestions will help to improve the topic

CHAPTER I: THEORETICAL BASIS OF BUSINESS PERFORMANCE

To survive and grow, a business, whether large, medium, or small, operating in any field, must be run effectively To know the current status of business operations, analyzing business performance plays a crucial part It helps the enterprise leaders to run the business

better based on analyzed data

1.1 Overview of business performance

In a market-oriented economy, the overarching and long-term goal of every business enterprise is to maximize profits To achieve the goal, it must develop an effective strategy in each phase, adapt to the changing business environment, allocate and manage

resources effectively and always check to see if the business is making any progress

1.1.1 The concept of business performance

Business performance is an economic category associated with a market mechanism related to all production and business processes such as labor, capital, machinery, and raw materials

An enterprise can only achieve high performance when using the essential elements

of the business process effectively When referring to business performance, economists consider different aspects in order to give different definitions

For businesses to achieve their goals, it is necessary to pay attention to internal conditions, promote production factors' sufficient capacity, and minimize the costs The requirement of improving business performance is to use reasonable inputs to achieve maximum results with minimum costs However, to understand the nature of efficiency, it

is also necessary to distinguish efficiency from production and business activities We can draw the efficiency concept as follows: "Efficiency is the comparison of outputs and factors of input resources" [according to Nguyen Ngoc Lan - the topic of economic performance] That comparison can be a relative comparison and an absolute comparison Outputs are often expressed in terms of value, revenue, and profit The resource input factors are labor, cost, assets, and capital Besides, it is also said that "Business performance is an economic category in depth, reflecting the level of resource exploitation and costs Resources in the process of reproduction to achieve business goals "[according

to Do Huu Tung - textbook of financial management] Today's business performance becomes more critical for economic growth and is the basis for assessing its economic goals in each period The absolute efficiency is determined as follows:

A = K - C

The relative efficiency index is determined as follows:

A = K/C

Inside:

• A: Business performance

• K: Business results (by the following criteria: Total value, Total revenue, profit)

• C: Input resources (including Labor, cost, capital, equipment)

1.1.2 Distinguish between business performance and results

From the above concepts, we can understand that business performance is an economic category that reflects using resources (equipment, machinery, fuel, and capital)

to achieve the business's goal

Business performance reflects the organizational structure and is determined by the results' ratio and its cost to achieve that result It is an increasingly important measure of economic growth and a basis for assessing the implementation of enterprises' production and business goals in each period The better the business performance, the more conditions to expand and develop investment in machinery and equipment procurement, improve workers' lives, and fulfill all obligations to the government Besides, we need to distinguish the difference and the relationship between business performance and business results The production and business activities are absolute numbers that reflect the enterprise's output scale and business activities after each period In the process of production, it is necessary to achieve the goal being set earlier The results are represented

by some quantitative indicators such as sales, revenue, profit, and qualitative indicators such as reputation, product quality

In terms of effectiveness, the results are different The business results reflect the remaining significant scale that demonstrates the comparison between expenditures and revenues Business results are measures of the product and operational performance of a business Results demonstrate the quality and value of products and services that lead to customer satisfaction and customer engagement The results only show that the scale achieved is large or small and does not reflect the quality of production and business activities Products come after efficiency Results are used to calculate and analyze performance in each business cycle Therefore, results and effects are two different but closely related concepts

1.1.3 The persuasive nature of business operations

In general, economic performance is the category reflecting management skills,

ensuring high results on socio-economic tasks set out at the smallest cost

The economic category is understood from qualitative and quantitative perspectives Quantitative: The economic performance of performing each socio-economic task shows the correlation between the results obtained and its cost If considering the synthesis, people can only get economic performance when the result is more remarkable than the cost spent; the more significant the difference, the higher the performance In terms of qualitative results: The level of economic performance obtained reflects

production and business management ability

The two qualitative and quantitative aspects of business performance are not

separated

Economic performance is not consistent with economic results Economic performance is the category of comparison, expressing the concern between the give-out and the gain The result is only a necessary factor to analyze and evaluate the efficiency itself The results have not shown how much it is created and at what cost, which means the results have not shown the quality of creation outward The essence of economic performance is to show economic development goals and production and business activities to satisfy the market's needs better Efficiency refers to the degree of satisfaction, demanding the selection and use of limited resources; that is to say, the economic results satisfy the need

Another effective indicator is KPI: A performance indicator or key performance indicator (KPI) is a type of performance measurement KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it engages Often success is simply the repeated, periodic achievement

of some levels of operational goal (e.g zero defects, 10/10 customer satisfaction), and sometimes success is defined in terms of making progress toward strategic goals Accordingly, choosing the right KPIs relies upon a good understanding of what is important to the organization What is deemed important often depends on the department measuring the performance – e.g the KPIs useful to finance will differ from the KPIs

assigned to sales

In summary, improving the economic performance of social production and all other production and business activities is the most basic requirement of development

goals

1.1.4 Classification of business performance

Performance is a broad aggregate category When approaching, analyzing, and evaluating this indicator, it is necessary to know the diversity of efficiency indicators and efficiency indicators classification according to the bases

Performance indicators differ from business drivers and aims (or goals) A school might consider the failure rate of its students as a key performance indicator which might help the school understand its position in the educational community, whereas a business might consider the percentage of income from returning customers as a potential KPI

The key stages in identifying KPIs are:

•Having a pre-defined business process (BP)

•Having requirements for the BPs

•Having a quantitative/qualitative measurement of the results and comparison with set goals

•Investigating variances and tweaking processes or resources to achieve short-term goals

Key performance indicators (KPIs) are ways to periodically assess the performances of organizations, business units, and their division, departments and employees Accordingly, KPIs are most commonly defined in a way that is understandable, meaningful, and measurable They are rarely defined in such a way that their fulfillment would be hampered by factors seen as non-controllable by the organizations or individuals responsible Such KPIs are usually ignored by organizations

KPIs should follow the SMART criteria This means the measure has a Specific purpose for the business, it is Measurable to really get a value of the KPI, the defined norms have to be Achievable, the improvement of a KPI has to be Relevant to the success

of the organization, and finally it must be Time phased, which means the value or outcomes are shown for a predefined and relevant period

In order to be evaluated, KPIs are linked to target values, so that the value of the measure can be assessed as meeting expectations or not

For the business performance of an enterprise, it is divided into:

• General business performance

• Division business performance

General business performance provides an overview of the business It shows the business performance of an enterprise's entire production and business process (or a

division of the business) in a time

A division's business performance refers to the performance of each specific field

of activity of the enterprise (using each type of asset, raw materials, primary business activity, a joint venture) It reflects performance in each specific area, not the whole

business

The business performance of an enterprise is also divided according to the criteria of time:

• Short-term business performance

• Long-term business performance

Short-term business performance is the business performance reviewed and

assessed in a short time, such as weeks, months, quarters, years, and several years

Long-term business performance is the business performance that is considered over a long time in association with long-term strategies and plans Long or short term business performance is sometimes concerned with the development and progress of the

business

There is a dialectic relationship between long-term and short-term business performance, and in some cases, they contradict each other Sometimes, to reach long-term goals, enterprises can give up the short-term goals, for example, considering world-renowned retail groups that have entered the Vietnamese market like METRO (Cash &

Carry) and BIG C (Big Coral)

1.1.5 The Necessity and Meaning of Improving Business Operations

Objective necessity: In the conditions of production and business under the market mechanism, each business has to create profits to survive and develop to achieve the highest production and trade; companies need to determine the targets and investment orientation and strategies It is necessary to understand the influence factors, the level, and trend of each factor contributing to business performance It can be done only based on business analysis In imperialism, the primary accumulation led to the proliferation of production; the production companies multiplied in both size and efficiency, with the fierce competition To win this competition, an enterprise needs to ensure sound management of its activities to create an effective business solution as the capitalist receives high quality and accuracy from many sources The accounting work cannot meet this requirement, so it is necessary to have an independent economic analysis science with rich research methods With significant economic development and high-tech achievements, practical analysis is more critical in the business management process because it helps managers find the most effective business plan for the economy, society,

and environment

The context of a market-oriented economy requires businesses to apply for scientific advances, upgrade operating systems, improve the production process, and

business management to ensure productivity and performance

In conclusion, analyzing the performance of production and business activities helps managers to make decisions, propose feasible plans to improve business performance, and utilize all the resources such as and capital, labor, land, and so on; the

meaning of improving business performance:

For the national economy: business performance is an essential economic category, reflecting the requirement of a time-saving rule that reflects resource use, production level, and return level It is production relations in the market mechanism The production force's development level is higher and higher, production relations are more and more perfect, and performance is improved The business performance brings the nation the distribution

and use of resources more and more appropriately and brings high performance

For the business itself: Business performance in absolute terms is the profit earned

It is the basis for expanding reproductions, improving the lives of employees For each enterprise, especially businesses operating in the market mechanism, improving business operations' performance plays an essential role in enterprises' existence and development Also, it helps businesses compete in the market, invest, expand, renovate, and modernize

technical facilities for production and business

For employees: Business performance is the driving force that stimulates employees to be enthusiastic about production, always paying attention to their labor

results

Improving business activities' efficiency means improving working life, promoting

productivity, and improving business performance

1.2 Content and consumption indicators in business performance analysis

For a general assessment of business performance, people often use the profitability indicator These indicators reflect the profitability of the business Besides, many other indicators are used to reflect the efficiency of the use of enterprise inputs

1.2.1 Content analysis of business results

Analysis of business results helps enterprises fully identify the causes affecting the business process and results [according to Pham Van Duoc - analyzing business activities] Since then, they are making business decisions efficiently Including Business performance analysis; Analyze business results; Analysis of production cost fluctuations; Analysis of corporate financial statements; Revenue volatility analysis

1.2.1.1 The criteria for analyzing business results

The ratio of profit and net revenue:

The ratio of revenue/net revenue = Profit (before tax, after-tax)/Net revenue

This coefficient shows how much profit the enterprise gets (before tax, after-tax) from one dong of revenue

Revenue indicator analysis:

Purpose: To see which underlying trend in revenue fluctuates, allows observing the fluctuations of revenue, specifically, the absolute number of increase (decrease), the absolute rate of increase (decrease), the value of increase or decrease

Profit indicator analysis:

Purpose: Analyzing the volatility of profit over time to evaluate the increase and decrease of profit and determine each factor's impact on profit

1.2.1.2 Methods of determining results

Business results = Σ revenue - Σ cost

- Revenue target: The enterprise's revenue in the consideration period (usually a year) is the total value of goods and services that the enterprise has sold during that period and issued the sale invoice)

Turnover = Σ sale price x Quantity of goods sold

- Revenue targets:

Revenue is divided into three categories:

With the VAT-inclusive sale price, the turnover is called VAT-inclusive turnover With the VAT-exclusive selling price, the revenue is called the VAT-exclusive revenue

Revenue without tax due to deduction of related items such as sales discounts, discounts, returns is called net revenue

Cost:

The enterprise's cost can be understood as all the costs of living labor, animalization, and other necessary costs that the enterprise must spend in production and business manifest It is in cash and charged for a certain period Thus, the nature of the business's production cost is always determined as the material costs (waste) and must be associated with the business purpose Operating expenses of enterprises include: Expenses

of normal business activities include (business costs and financial costs); other operating expenses Based on the ability to induce costs and the object of costs, classify them into direct and indirect costs

According to the relationship between the technological process that produces the product and the business process, the cost is an essential cost and a non-basic cost According to the relationship with the activity level, costs are classified: variable and variable costs Thus: production and business costs have a direct impact on the business results of enterprises If costs increase, the result is reduced, costs decrease, the results increase, so enterprises always pay attention to reducing costs and classifying costs to get the best business results

- Profit target: Business profit is an indicator reflecting the surplus-value or the level of business performance that the enterprise gains

Business profit = Σ revenue - Σ cost

Business profits include Profits earned from the results of production and business activities, profits earned from financial results, other profits

Calculation method:

Gross profit = Net revenue - Total cost of goods sold Profit before tax = Gross profit - Total cost of insurance and administration 1.2.2 Overall effect

1.2.2.1 Efficient use of total assets

The production capacity of total assets:

SSX TS = Net revenue/Average total assets

This target shows how many VND of net revenue of the assets spent on business in the period

Return on assets (ROA):

SSL TS = Return/Average Total Assets = ROA

This target shows how much profit is earned for every 1 dong of assets spent on business in the period

1.2.2.2 Efficient use of equity The productivity of equity capital

SSX VCSH = Net revenue/Average equity = ROE

This target shows how much revenue is generated for every 1 dong of equity invested in the business

Return on equity (ROE):

SSL VCSH = Return after-tax/Average equity = ROE

This target shows how many dong of profit for every 1 dong of equity invested in the business

1.2.2.3 Effective use of costs

The production capacity of cost:

SSX CP = Net revenue/Total cost

This target shows how many dong of revenue for every 1 dong of expenses spent in the period

Cost profitability:

SSL CP = Profit/Total cost

This target reflects how many VND of profit for every 1 dong of expenses spent in the period

1.3 Evaluate the efficiency of input resources

1.3.1 Effective use of Labor

Average labor productivity:

SSX LĐ = Total revenue/Average total number of employees

This target shows how much revenue per employee generated during the period It reflects fair Labor in the course of doing business

The profitability of Labor:

SSL LĐ = Total profit/Average total number of employees

This target shows how much profit one employee can create in a period

1.3.2 Effective use of fixed assets

The production capacity of fixed assets:

SSX TSCĐ = Average net revenue/fixed assets

This target shows how much net revenue is earned for every 1 dong of fixed assets spent on business in the period

The profitability of fixed assets:

SSL TSCĐ = Average profit/fixed assets

This target shows how much profit is earned for every 1 dong of fixed assets spent

in business in the period

1.3.3 Effective use of liquid assets

The production capacity of liquid assets:

SSX TSLĐ = Net revenue/Average working assets

This indicator shows how many dong of net revenue for every 1 dong of working asset spent in business in the period

The profitability of liquid assets:

SSL TSLĐ = Average profit/liquid assets

This target shows how many dong of profit for every 1 dong of working asset spent

in business in the period

The rate of labor asset turnover in the year:

TĐLC TSLĐ = Revenue/Average working assets 1.4 Factors affecting business performance

Determining the factors that affect business performance is the perception correctly mapping out the factors that affect individual results in business analysis Thus, determining the effects of factors needs to be accurate, timely, identifying the target factors with economic phenomena, and determining the interaction between them According to the nature of factors affecting business performance, we can classify them according to 4 different ways: the inevitability of factors, the impact trend of factors, and influencing factors in the business environment Subjective factors: Such as cost, labor fee, and labor time are factors depending on the internal resources of the business Objective factors: Market prices, tax rates, minimum or average wages external impacts on business people Analyze business performance according to subjective and objective factors to evaluate the efforts and find ways to increase business performance

1.5 Content and analytical methods

1.5.1 Content analysis

The contents of the analysis of production and business activities are economic phenomena, economic processes that have occurred, or an independent economic accounting unit under many subjective factors and different objectivity These phenomena and processes are manifested under a specific production and business result expressed by economic indicators

Production and business results can be the result of each separate stage, such as purchases, production results, sales results, or the business process's combined results: financial results When analyzing business results, people focus on the results of implementing orientations, goals, and plans In the analysis, business results are represented by economic indicators It is the definition of the content and scope of the business result The analysis's main content is the business results such as sales revenue, production value, cost, profit However, the business results are always analyzed concerning the conditions (elements) of the business process such as labor, capital, and materials When analyzing, it is necessary to understand quantity and quality indicators Quantitative indicators reflect the size of results or business conditions such as revenue, labor, capital, and area On the contrary, quality indicators reflect business performance

or efficiency of using business factors such as unit cost, cost ratio, profitability, labor productivity

The relatively complete construction of a system of indicators with different indicator modules, the classification of the influencing factors from different angles helps enterprises fully evaluate business results The enterprise themselves try to find the cause

of the strengths and weaknesses in order to take measures to increase business performance When analyzing business results are expressed as economic indicators under the impact of new factors that are "qualitative" process, it is necessary to quantify the indicators and factors in the numerical values—determined with a determined variability

In order to perform those specific jobs, it is necessary to study generalized business analysis methods

1.5.2 Analytical method

With the development of awareness of economic phenomena and the development

of the economic sciences and applied mathematics, computational engineering methods are used in analytical economic science To achieve each method's purpose has its strengths and limitations; it requires proficiency in applying it to achieve the set purpose

The following are technical calculation methods commonly used in business

analysis:

1.5.2.1 Comparative method

The comparison method is the oldest and most widely used The economic part compares the quantified economic indicators and phenomena with the same content and similar nature

The comparison method comes in many forms:

• Compare performance data with a benchmark or planned metrics

• Comparing actual data between periods and years

• Compare performance figures with average or advanced specifications - economics

• Compare the firm's data with those of respective firms or with competitors

• Comparison of technical-economic parameters of other economic options

The most significant advantage of the comparison method is separating the compared phenomena' general features and characteristics The aspects of development or underdevelopment, efficiency, or less efficiency are assessed Adequate to find the best and most optimal management solution in each specific case When applying the comparison method, the principal requirement is: The calculation criteria or results must be

similar in terms of the reflected content and the way of determination In a comparative analysis, absolute, relative, and mean numbers are comparable The absolute number is the set number directly from the factors constituting the economic phenomenon that is reflected For example, total production, total circulation costs, total profit

Analysis in absolute numbers shows the volume and scale of economic phenomena The absolute numbers to be compared must have the same reflection content, the determined calculation method, the scope, the structure, and the measurement unit of the phenomenon Thus the total application capacity in comparative analysis falls within a particular framework

The relative number is the number expressed as a percentage or factor Using a relative number to evaluate unique economic phenomena' structural changes allows us to link non-equivalent criteria for comparative analysis For example, establish a relationship between the two criteria of the volume of goods consumed and the profit to deduce If the volume of goods increases by 1%, the total profit can be increased by 1% However, the relative number does not reflect the internal quality nor the scale of the economic phenomenon Therefore, in many cases, when comparing, it is necessary to combine both absolute and relative numbers simultaneously The average number reflects the most common aspect of the phenomenon, ignoring the uneven development of the parts constituting the economic phenomenon The average can be expressed in terms of total (average labor productivity Average working capital .) It can also be expressed in relative numbers (average fee rate, rate of return ) Using the average number allows for

a general assessment of the enterprise's economic performance, building the economic - technical norms However, it should be noted that the number of average codes does not exist in reality Therefore, when using it, it is necessary to take into account the maximum ranges of fluctuations

1.5.2.2 The continuous replacement method

Continuous substitution is to replace, in turn, the original or planned data with the actual data of the factors affecting an economic indicator analyzed according to the logic of the relationship between the factors The method of continuous substitution can be applied when a function can express the relationship between indicators and between factors and economic phenomena Continuous substitution is often used to calculate the influence of the factors affecting the same indicator being analyzed In this method, the substitution factor is the factor for which the effect is calculated While the other factors remain the same, then comparing the functional difference between what was before and what has

been replaced will calculate the impact level Effect of the replaced factor Assume that indicator A has a relationship with two factors, and that relationship can be expressed as a function:

A = f (X, Y) and Ao = f (Xo, Yo)

A1 = f (X1, Y1)

To calculate the effects of factors X and Y on indicator A Replace X, Y, respectively At that time, supposed to replace factor X before Y; we have:

• Influence level of factor X on indicator A:

∆ x = f (X1, Yo) - f (Xo, Yo)

• Influence level of factor Y on indicator A:

∆ y = f (X1, Y1) - f (X1, Yo)

It can be seen that, in the same way above, if we replace factor Y first, factor X follows,

we have:

• Influence of factor Y on indicator A:

∆ y = f (Xo, Y1) - f (Xo, Yo)

• Influence level of factor X on indicator A:

∆ x = f (X1, Y1) - f (Xo, Y1)

Thus, when the replacement sequence is different, different results can be obtained

on the same factor's influence on the same criterion It is the prominent drawback of this method Determining the logical sequence of replacement is a requirement when using this method The sequence of continuous substitution in the documents is usually specified as follows:

• The weight factor was replaced First, the weight factor was replaced

• The primary factor is replaced First, the second factor is replaced later

• When it is possible to distinguish clearly the influencing factors, it is convenient

to apply the above principle in continuous substitution There are many quality and volume factors simultaneously, i.e., many factors have the same properties; it becomes difficult to determine the replacement order Some documents have been methodical Integral calculus instead of this method

With the above example, we have A = f (X, Y)

d A = f x d x + f y d y

and ∆ A x = f x d x

∆ A y = f y d y

When the actual ratio compared to the original indicator (A1 compared to Ao) is not more than 5 - 10%, the calculated results in any replacement sequence will be approximately the same Another distortion of this method is the difference number method In this method, to determine each factor's influence level, we use each factor's comparative difference number to calculate

Also, with the above example, we have: A = f (x, y) with the replacement order x first, y after:

∆ A x = f (∆ x Yo) where ∆ X = X1 - Xo

∆ Ay = f (X1 ∆y) where ∆ Y = Y1 – Yo

It is a short and straightforward difference number method However, when using

it, it should be noted The sign of the effect of factors on the analyzed indicator coincides with the difference in that factor if the function indicates the factor's relationship to the indicator is multiplication sign (x) or plus sign (+)

The sign of the influence of factors on an indicator is analyzed inversely with the sign of the factor's difference if the function indicates the factor's relationship to the criterion is the divisor (:) or the minus sign (-)

1.5.2.3 Balance contact method

It describes and analyzes economic phenomena when there is an equilibrium relationship or an equilibrium need exists The equilibrium contact method is widely used

in financial analysis, analysis of the movement of goods and fuel materials, determine the breakeven point, trade balance analysis

1.5.2.4 Graphical method

A method of describing and analyzing economic phenomena in different graphs is the pie chart and the graph curves The advantage of this approach is that it is highly generalizable The graphical method is advantageous when describing and analyzing general and abstract economic phenomena For example, a graphical analysis of the goods supply-demand shows the relationship between costs and production and business scale The relationships between economic phenomena are represented by a function (or a specific system of equations), it allows determining the magnitude of the object to be analyzed and the impact of the influencing factors

1.5.2.5 Partitioning method

It is a statistical method and is widely applied in economic analysis, especially in macroeconomic analysis Hierarchy is the division of part, constituents of the phenomenon being studied according to that phenomenon's primary signs The classification method

allows studying phenomena in the correlation or dependency association, separating from the effects affecting the criteria, analyzing the more defined factors, finding out the laws and trends Typical for economic phenomena and economic developments This method

is also used to explore and research the commodity market, grouping customers, customers

1.5.2.6 Correlation comparison method

It is a statistical method used to study nonlinear correlation relationships between economic phenomena Correlation comparison is often used to format economic relationships and quantify them through experimentation with large numbers of statistics, understanding development trends, and regularity in the development and relationships of various economic phenomena

1.5.2.7 Other applied math methods

In economic analysis, which has been applied to many applied mathematical methods, the number of mathematical methods applied in economic analysis is increasing Popular methods are linear planning math, game theory, crowd service theory The methods above are chosen to perform economic activity analysis depending on the object

of analysis and how information is presented in each specific case

1.6 Directions and measures to improve business performance

Improving business performance is a fundamental goal of every business Because

it is a necessary condition for an enterprise's existence and development, if a business wants to survive in normal conditions, its production and business activities must offset its costs As for businesses that want to develop, business results must not only offset costs but also have redundancy to accumulate for the extensive reproduction process The greater the business performance of an enterprise in a short time, and the more substantial impact of these results on implementing socio-economic goals, the higher the business results and the opposite That inevitable development requires striving to improve the efficiency of its business operations

However, an enterprise's business performance is affected by the synthesis of many factors, many stages to improve business operations' efficiency, it is necessary to solve the synthesis, synchronize many problems and many solutions Legal effect First of all, the activities of production and business of the enterprise must always solve the following fundamental problems:

• Capture market needs and the responsiveness of businesses to build the most suitable products and business strategy

• Prepare necessary conditions and factors for production and business processes, for high-quality products and lower product costs

• Organize the consumption process to get the most prominent revenue at a low cost and in the shortest time

Thus, in order to improve business performance, from a general perspective, an enterprise must well perform the following basic tasks:

• By all measures possible to increase the results of production and business both in kind and value

• Reducing the cost of spending both in kind and value to achieve that result

• Reduce the length of time it takes to achieve business results per unit cost

Going into detail about each efficiency indicator, in order to improve efficiency in a way corresponding to a particular efficiency indicator, we have different specific measures: Increase the output of the product produced in order to reduce the fixed costs per unit of product Through practical research comes a necessary conclusion as follows: most businesses It has a function of total costs in the short term Furthermore, it is a linear function corresponding to each specific output range

TC = FC + Q AVC

With a linear overhead function, the average cost function has the form of a hyperbole (decreasing with output): So the firm's most efficient production output is according to design maximum capacity From a production perspective, the optimal output level is the design capacity, but in practice, it depends on whether the market is acceptable

or not Therefore, in the market mechanism, a requirement for enterprises is that at a fixed market price, how can the enterprise managers consume as many products (within the limit

of design capacity) the more efficient it is Consumption of output as much as possible depends not only on production but also on its marketing

One of the ways to increase the sales volume of businesses is:

• Strengthen advertising

• Expand the system of sales agents and product introduction stores

• Conducting general business

• Improve product quality

• Product discounts

• Improve sales quality

• Doing well in the after-sales service

Save on average total fixed and variable costs (reducing the consumption of living and animalized Labor) with the following solutions:

• Innovating production technology

• Improved production organization and labor organization

• Innovating business management One of the directions for innovation in business management is internal cost accounting

From the above general analysis, the following observations are drawn: Business performance is the most critical goal of enterprises in the market mechanism, especially for equitized enterprises The task is to clarify equitized enterprises' current efficiency to offer solutions to improve enterprises' business performance

For a long time, in theory, quite a few methods serve the evaluation of business performance However, in practice, the effectiveness evaluation method has not received proper and reasonable attention and guidance By legal documents, it is the assessment of the actual performance of state-owned enterprises Therefore, to assess Petrolimex Chemicals Co., Ltd., the author will mainly use the combined efficiency indicators such as profit and rate of return on capital the thesis will analyze efficiency indicators on each side comprehensively

CHAPTER II BUSINESS PERFORMANCE ANALYSIS OF PETROLIMEX

CHEMICALS COMPANY LTD 2.1 Overview of Petrolimex Chemicals Company Limited

2.1.1 History and development of Petrolimex Chemicals Company Limited

Petrolimex Chemicals Company Limited is a one-member limited liability company, invested by Petrolimex Petrochemical Joint Stock Corporation, a Vietnam National Petroleum Group subsidiary, and 100% owner of charter capital Decision No 033/QD-PLC-HĐQT December 27th, 2005 of the Board of Directors of Petrolimex Petrochemical Joint Stock Company The Company officially came into operation on March 1st, 2006

- The symbol of Petrolimex Chemicals Company Limited uses the logo of Vietnam National Petroleum Group

- Charter capital: 180,000,000,000 VND (One hundred and eighty billion Vietnam dong)

2.1.2 Characteristics of business activities at Petrolimex Chemicals Company Limited

•The company’s main field of production and business activities:

Trading, importing, and exporting Solvents, Chemicals, Natural rubber, Synthetic rubber, and other products in the field of Solvents, Chemicals, Natural rubber, Synthetic rubber associated with the construction brand "Petrolimex Chemicals"; Providing transportation services, warehouse leasing, leasing preparation, testing analysis, consulting, and technical services

• A list of some essential business items at Petrolimex Chemicals Company Limited

- Toluene: Has a vast range of applications as a solvent for most high-grade synthetic resin paints Also available as solubilize ester, cellulose, and toluene is also used

as a solvent in the manufacture of unglazed rubber, plasticizers, and cement

- Acetone: Cleaning agent, solvent for plastics and rubber, adhesives; as raw materials in pharmaceuticals

- IPA: Is a solvent used in cleaning, printing, to manufacture drugs, adhesives

- Rubber solvent: Used in the rubber industry, in the tire industry Detergent for the maintenance of machinery equipment They make soot-free fuel for the glass and jewellery industries, making gas for gas lighters and fuel for tourist kitchens

- Methanol: Used directly in acetic acid production, formaldehyde, used in printing inks, paints, plant protection drugs

- Butyl Cellosolve: As a primary solvent for coating; Binder for industrial water emulsions; Binder for plastics and dyes in water printing inks; Main solvents for silk screen, printing inks solvents; Solvents dissolved for pesticides in the industry; Connectors and solvents for household and industrial cleaners, detergents, hard surface cleaners, disinfectants

- Solvent T-sol White Spirit: Used as a deterrent to remove grease on metal surfaces; Used in the paint manufacturing industry

- Xylene: Used for high solubility for most synthetic resins especially, even in the case of low evaporation; Use in agriculture: insecticide, fungicide

- Methyl Ethyl Ketone: Used in footwear and lacquer industries

- Solvesso paint thinner, TDI 80/20; N-Butyl Acetate; MIBK…

2.1.3 Organizational and managerial characteristics at Petrolimex Chemicals Company Limited

• Leadership of Petrolimex Chemicals Company Limited

The president and the director is the representative of Petrolimex Petrochemical Joint Stock Company to manage and responsible for Petrolimex Petrochemical Joint Stock Company to develop the Company according to the objectives set by the Petrolimex Petrochemical Joint Stock Company assigned The rights and obligations of the company president are provided in the Company's charter He is the person who directly manages all daily activities and responds to the Board of Directors of Petrolimex Petrochemical Joint Stock Company, the President of the Company for the implementation of Rights and obligations of the company director is provided in the Company's charter

• Company's Departments

Office of Administrative Organization: has functions and duties to advise and help leaders of the Company to implement the work of organization and personnel; Responsible for administrative work - synthesis, clerical - archive; In charge of the emulation, reward, and discipline of the Company

Department of Finance and Accounting: has the function of advising and assisting the director of the Company in directing and organizing the implementation of Finance,

Accounting, and statistics on the whole Company following state regulations, laws, and regulations of the Company; other assignments when assigned by the director of the Company

Chemical Sales Department: has the function of advising and assisting the director

of the Company on the sale of products and services of the Company; product research and development, market development; customer relationship building and development Be responsible to the director of the Company for those activities in the assigned duties and authority

Technical Department: has the function of advising and assisting the director of the Company in the fields of technical management, construction, progress, quality for the projects invested by the Company Planing, monitoring, supervising, inspect, evaluate, and report the production situation at the warehouses as requested by the Company leaders Perform other tasks in the technical field according to the decentralization and delegation

of authority of the director

• The subordinate units

- Hai Phong Chemical Branch: Has the function of directly implementing business activities in the Hai Phong and Northern provinces

- Saigon Chemical Branch has the function of directly performing chemical business activities in the city market Ho Chi Minh City and southern provinces

- Affiliated chemical warehouses include:

Nha Be Chemical Warehouse – Ho Chi Cinh City is responsible for organizing activities to import ships and drums to ensure the supply of goods for the chemical industry

in the Southern markets, exploitation, and use of technical foundations, materials, and labor tools for business purposes in the locality

Thuong Ly Chemical Warehouse in Haiphong is responsible for organizing activities to import ships and drums to ensure the supply of goods for the chemical products industry in the Northern markets; exploitation and use of technical foundations, materials, and labor tools for business purposes in the locality

Minh Huong Chemical Warehouse - Da Nang City, is a consignment warehouse responsible for partly ensuring the source of goods for central provinces such as Da Nang, Quang Binh

Phu Thi Chemical Warehouse - Hanoi City, is a transit warehouse between Hai Phong and some other northern provinces such as Hanoi, Ha Nam, Bac Ninh Phu Thi

Chemical Warehouse is directly under the management of the chemicals business department

Diagram 2 1: Organizational chart of Petrolimex Chemical Company Limited

Diagram 2 2: Organizational chart of the Chemical Business Department

2.2 Overview of industrial chemicals and industrial chemical business activities 2.2.1 Characteristics of chemical products and industrial chemical business

Chemical commodities are an essential commodity in the national economy In life, chemicals appear everywhere, and It is indispensable in industrial factories Chemical is a toxic and dangerous commodity to humans, so it is necessary to have a treasure trove and carefully preserve it to avoid being released into the environment Due to this item's dangerous nature, the use of chemicals in production and consumption requires great care

to avoid unfortunate accidents

Our country's chemical industry accounts for a significant proportion of the industrial structure of 11.2% However, compared to the newly developed countries in Southeast Asia, the chemical production capacity is still too small The chemical industry

is mostly a vital sector in a country's economy, but its role is still limited Vietnam chemical industry report in 2016, the chemical industry in our country has not produced necessary organic chemicals such as chloroform, methanol, ethanol Furthermore, there

is still a lack of inorganic chemicals Demand for use is significant such as soda, nitric acid, phosphoric acid Alternatively, the development of pure chemical products for pharmaceuticals, scientific research, food processing, and rubber and cannot still manufacture plastic materials

With the characteristics of being an agricultural country, Vietnam always attaches great importance to developing chemicals The strategy for domestic fertilizer production has continuously increased production at 10%/year However, our current fertilizer production capacity can only meet 45% of the demand for agricultural use The weakness

of this domestic chemical fertilizer industry is that it is not diversified in fertilizer types The demand for DAP, nitrogen, and urea has to depend heavily on imports

The chemical industry in Vietnam is mainly aimed at serving agriculture, industrial production, and consumption Those sectors include:

 Chemicals for agriculture

 Fertilizers such as phosphate fertilizer, nitrogenous fertilizer, NPK fertilizer

 Chemicals used to protect plants

 Basic inorganic chemicals

 Soda, soda, sulfuric acid, phosphoric acid, hydrochloric acid

 Chemical industry

 Luminaire, oxygen, carbon dioxide, activated carbon, ammonia, petroleum product additives, welding rods, plastic materials

 Chemicals used in the consumption

 Gasoline, detergent, battery, rubber, paint

The development strategy of the chemical industry in Vietnam

With the current development demand, the Vietnamese chemical market has built a strategy to develop the industry The goal of developing the chemical industry in our country is to focus on the national economy areas At the same time, the chemical industry also ensures the leading role of the state economy These are the chemicals used for agriculture, rubber, and necessary chemicals

The Vietnam chemical market development plan 2016 has identified the targets as below:

To step by step, build a chemical industry with a rational and modern structure Concentrated industrial parks and large-scale chemical production complexes with advanced technologies must be formed Especially to efficiently use domestic resources, meet domestic market requirements, and replace imported goods with the guideline towards exporting abroad

To achieve the above objectives, the planning tasks also clearly stated the basic chemical product development methods It is to step up the production of traditional industries of necessary chemicals to meet market demands Besides, it is necessary to study and prepare to invest in large-scale soda and soda production To serve the development of light industry, building materials industry, and metallurgy, and oil refining

The primary orientation of the chemical industry development strategy in Vietnam

is to promote the advantages of mineral and plant resources This promotion promotes other fertilizers, pharmaceutical chemistry, rubber, inorganic chemicals, and petrochemicals Simultaneously, to expand cooperation with other countries to build a well-balanced and modern chemical industry in Vietnam Simultaneously, it must promote the highest level of potentials for the domestic economy and national defense

Besides, this development plan encouraged the application of more modern technology for high-quality chemical products These products are priced competitively and minimize the detrimental effects of chemical technology production on the environment Besides, this development plan must go hand in hand with transforming the industry structure and the economic sector in general

2.2.2 Characteristics of industrial chemical trading

In the past, chemicals were a state monopoly, and only a few authorized companies were allowed to do business, such as Chemical Company - Ministry of Trade Under the impact of the market mechanism, many companies are allowed to trade in this product, making the chemical industry's competition increasingly fierce In the past years, our market's chemical products were mainly imported from China, the former Soviet Union, and some other countries

Today, solvents and industrial chemicals can be imported from many countries worldwide, such as Germany, America, Japan, India, Arab Saudi Many domestic chemical companies started to produce more products that could compete with imported goods, making the chemical market increasingly diversified in quantity and variety Prices are also significantly reduced The business market is filled with fierce competition for businesses engaged in chemical trading

2.3 Analyzing the business performance of Petrolimex Chemical Co., Ltd in the period 2017-2019

2.3.1 Overview of production and business results of Petrolimex Chemical Co., Ltd in the period 2017-2019

Despite facing many difficulties such as fierce competition from competitors, fluctuations in raw material prices, and demand has not flourished, from 2017 to 2019, production and sales The company's numbers are always increasing Furthermore, Petrolimex Chemical Co., Ltd remains one of the leading solvent trading companies in the domestic and international markets Below is the structure of the company's output and sales of crucial business products in 2017-2019

Table 2 1: Output structure of the company's key business items from 2017 to 2019