CHAPTER 2:REVIEW OF INTERNATIONAL SHIPPING AND LABOUR
2.4 Review of Inlaco Saigon’s operation
Mining fleet: 6 ships Thanh Son, Thanh Ba, Thanh Thuy, Inlaco Bright, Aquamarine Inlaco Accord of the Company's fixed-term leased.
Thanh Son Thanh Thuy Thanh Ba
Aquamarine Inlaco Bright Inlaco Accord
Labor export: Inlaco Saigon is one of the leading companies of exporting shipcrew in Vietnam, thanks to appropriate policies for this work over the years. Until 22/03/2012, the number of shipcrews of the companie is 1066, in which has 1450 turn of shipcrews enter and leave ship. Exporting partners of Inlaco Saigon are: Inlaco Japan, Nissho. In addition, shipcrews also work on the company's ships and other shipping companies in country such as Vinalines, Saigonship, Inlaco HaiPhong, shipping company, PET, Nghi Son Cement.
Shipping agent: With a team of highly skilled employees, the company is willing to provide the best services as owner agent, charterer agent, agent for all kinds of ships such as oil ship, container ship, bulk or general cargo ship, ship carrying liquefied gases ... at all the ports of Vietnam. Also, with branches in Ha Noi, Hai Phong, Nghe An and Thanh Hoa, can provide agency services quickly and efficiently in different ports of Vietnam.
Currently, company is acting as agents for domestic shipowners and shipowners of Japan in Vietnam's ports. These services include arrangement of procedures for vessels
32 to enter and leave port to shuttle crew, wharves and unload goods ... Besides, Inlaco Saigon also offers logistics services for customers in Vietnam.
Inlaco Logistics Company
Inlaco Logistics was established on 11/2007 to take advantage and improve business efficiency in the use of capital and the existing infrastructure of the company Inlaco Saigon including warehouses, container and transport fleet, human resource of forwarding department in Hai Phong, Hanoi and prevention agents.
The main objective of Inlaco Logistics is to maintain logistics operations using container warehouse in Hai Phong, fleet of trucks as well as associated service branches to provide logistics services to customers nationwide.
The work of supplying machine and parts of Hanshin ship engine: Engine and Hanshin devices are installed on many ships of the companies from North to South of Vietnam such as: Vosco, Vitranschart, Vitaco, Vietpetroco, Vinaship, Nosco , Seagull shipping, Damacosco, Inlaco Saigon, Vietranstimex
The management of ship and cargo brokerage: Currently the company is managing for MH Adventure vessel of Minh Hung Company and The Son vessel of Lam Kinh.
Investment in building vessel: The company decided to get two double hull ships, the owner of which is Vinashin, tonnage of 34,000 DWT. The company has signed the contract with Pha Rung shipyard to conduct building. Inlaco Express vessel in November, 2010 and is expected to be completed in 10/2011. Another contract will be signed between Pha Rung shipyard and Inlaco Saigon in 2012.
2.5 Importance of crew export at Inlaco Saigon.
Inlaco Saigon is one of the earliest companies establishing crew export field. The company was established on 27.02.1995, and the export crew began on 29.04.1992. So the experience of crew export is about 20 years. Revenue from crew export activity accounts for nearly 80% of turnover of the company. In 2011, revenue from this activity accounted for 90.78% of total turnover. This number indicates that crew export has been playing an important role in Inlaco Saigon’s success.
Currently, supplying crew has become one of the principal activities to bring high profits for shipping companies. In strict competition in crew export, the company must quickly improve the quality of crew export to meet customer needs as well as to maintain their own existence. The number of Vietnamese exported crews has been increasing in recently. It can confirm the quality of Vietnam's current crew has been enhanced and guaranteed to meet the needs of foreign ship owners.
33 Since the company was set up, Inlaco Saigon has focused on the export of crews.
Basing on crew export, other services such as shipping agents, cargo brokerage…are developed to make Inlaco Saigon grow in all aspects and add prestige to the partners in Vietnam and abroad.
2.6 General review of Inlaco Saigon’s in 2010-2011.
Table 2.1: Result of the business activities of company in 2010-2011
Unit: billion
No. Target Plan in
2011
Perform in 2010
Perfor m in 2011
Compare 2011 to 2010
Plan in
2011
Perform in 2010 I Maritime
transport activity
1 Turnover 223.7 238.797 276 123% 116%
2 Profit/Loss -5.215
II Maritime service activities and other business
1 Turnover 76.3 55.667 28 37% 50%
2 Profit/Loss 11.061 0%
III Sum of financial indicators
1 Turnover 300 294.464 304 101% 103%
2 Profit/Loss 6 5.846 9.2 153% 157%
3 Budget Submission
5 6.291 4.2 84% 67%
Source: Accounting Department at Inlaco Saigon In 2011, though the company met many difficulties, but the producing activities of business maintaining a stable manner. When compared with previous years, the situation the company's business has positive signs. Specifically:
Revenue: 304 billion VND , Profits: $ 9.2 billion, Budget: $ 4.2 billion
34 To review the business production situation, we analyzed the production activities of the company business.
Mining fleet:
In 2011, the Company's fleet includes 06 ships and company combine medium-term lease and mining Thanh Ba ship, Thanh Thuy, Inlaco Bright, Thanh Son, Aquamarine and Inlaco Accord ship. This leads to turnover of the fleet in 2011 was 276 billion, up 18% when compared with 2010 and reached 123% of the yearly plan. The situation fleet operators in 2011 met many difficulties because rate dropped sharply, scarcity of sources leading to company didn’t have profit in business fleet. In addition, fleet cost in that year is high due to:
Aquamarine ship overhaul on track at Ba Son from 25/3 to 11/4/2011 Rising oil price, leading to the repairing costs, labor also increased
The vessels visit less to Vietnam, so supplies must be purchased abroad, this also increases costs.
Regarding investment in fleet development:
+ To complete the new building of Inlaco Express ship and expectedly put into usage in 01/2012
+ Signing contract of new building for vessel marked HR34-PR10 with Pha Rung Shipyard, the project will be implemented in 2012-2013.
Crew export
According to report on 31/12/2011, the number of crews is 1057 crews. In 2011, there are 1177 turns in and left. Turnover of crew export remained stable gain of $ 4.2 million.
In 2012, the Company continues to provide crews for the foreign partner. They are Inlaco Japan, Nissho, PSSI, NS United Marine, Excel Marine ... and the company's fleet
The work of building ships and Hanshin services:
Progress of building Inlaco Express tonnage of which is 34,000 DWT in Pha Rung Shipyard is as schedule. In 01/2012, the company will receive Inlaco Express vessel and put into operation.
In 9/2011, the company has signed a contract with Pha Rung Shipyard to build dry cargo tonnage of which is 34,000 DWT. This vessel is signed PR10. Total cost is 699 billion. Capital structure including 85% from Agribank and 15% from commercial loans. Ship is expected to be completed in 10/2013.
Hanshin work: in 2011, Division of Engineering provides materials and spare parts of ships for some companies such as Da Nang ship, Vitranschart, and others. However, Hanshin service revenue in 2011 was very low. The main cause is the main supply for the ship building project is not implemented due to the small shipbuilding hardly
35 occur. In addition, the supply of spare parts and materials was increased for smaller ships are in difficulty situation.
Activity of the Inlaco Logistics Company:
Production and sales of Inlaco Logistics in 2011 as follows:
Total revenue: 21.9 billion, up 10.07% compared to 2010 Total cost: 19.9 billion, up 20.5% compared to 2010 Profit: 2.01 billion, with 59.32% compared to 2010
The main revenue is from services of container lifting and transport, accounting for 90% of total revenue. Warehousing has offered high performance until end of 2011.
Production and sales dropped significantly, because roads leading from warehouse to port were frequently blocked.
Production and sales of logistics in 2011 increased compared to 2010 but only 59%
profit due to higher input costs, especially fuel costs, supplies, repairs, labor and other surface, result of investment to buy two vehicles used for lifting container in 12/2011.
Meanwhile, prices of services did not increase significantly.
The management of ship and cargo brokerage:
The company is managing two vessels: the Tu Son ship of Lam Kinh company and the MH Adventure ship of Minh Hung.company. However, on 01/01/2012, the company will terminate the contract of management the Tu Son ship because the company has completed support in the initial operation and can focus on Inlaco Saigon’s fleet Activity of the branches.
The branches in Hai Phong, Hanoi, Nghe An are responsible for the crew and agency services.