inventory management of vinamilk

HCMC UNIVERSITY OF TECHNOLOGY AND EDUCATION
FACULTY FOR HIGH-QUALITY TRAINING

COURSE: INVENTORY MANAGEMENT

INVENTORY MANAGEMENT OF VINAMILK

Ho Chi Minh City, November 2021


CONTENTS
INSTRUCTOR’S COMMENTS........................................................................................1
CHAPTER 1: THEORETICAL BASIS OF INVENTORIES IN THE ENTERPRISE......2
1.1 Inventory - inventory management...........................................................................2
1.1.1 Concept of inventory..........................................................................................2
1.1.2 Inventories in the enterprise................................................................................2
1.1.3

The role of inventory in the business.............................................................3

1.1.4

Classification of inventory.............................................................................5

1.2.

Enterprise inventory management.......................................................................10

1.2.1.

Business Overview.......................................................................................10

1.2.2.

Inventory management in the Enterprise......................................................10

1.2.3.

Costs and planning in inventory management..............................................13

1.2.4.

Factors affecting inventory...........................................................................14

1.2.5.

Some models of inventory management......................................................15

1.3.

Risks in inventory management..........................................................................17

1.3.1.

Supply disruption.........................................................................................17

1.3.2.

Variation in product quality..........................................................................18

1.3.3.

The company's ability to sell goods.............................................................18

CHAPTER 2 SITUATION OF INVENTORY MANAGEMENT AT VIETNAM DAIRY
JOINT STOCK COMPANY (VINAMILK).....................................................................19
2.1 Overview of Vietnam Dairy Products Joint Stock Company..................................19
2.1.1. About Vietnam Dairy Products Joint Stock Company.....................................19
2.1.2. Functions, Objectives and Mission of the Company and each division of
Vietnam Dairy Products Joint Stock Company (Vinamilk).......................................22


2.1.3. Current business situation................................................................................22
2.2. Actual situation of inventory management at Vietnam Dairy Products Joint Stock
Company (Vinamilk)....................................................................................................24
2.2.1. Analysis of short-term and long-term assets of Vinamilk:...............................24
2.2.2.

Classification of company’s inventory.........................................................26

2.2.3.

Inventory management activities..................................................................26

2.2.4 Finished product warehouse production process..............................................28
2.2.5. Vinamilk’s inventory management model.......................................................29
2.2.6. Arrangement of types of inventory..................................................................33
CHAPTER 3: GENERAL ASSESSMENT AND COMPLETE SOLUTIONS ON STOCK
MANAGEMENT............................................................................................................. 35
3.1. Advantages of inventory management...................................................................35
3.3. Backlog problems and proposed solutions in the process of inventory management

...................................................................................................................................... 36
CHAPTER 4 INTERNET OF THINGS (IOT).................................................................47
CHAPTER 5: INVENTORY AUDIT CHECKLIST........................................................51
REFERENCE................................................................................................................... 55

LIST OF FIGURE
Figure 1.1 Classification of inventory according to the ABC technique............................9
Figure 1.2 EOQ Model.....................................................................................................16
Figure 2.1 Vinamilk's headquarters..................................................................................20
Figure 2.2 Current situation as of December 31,2020......................................................26


Figure 3.1 Feedback from customers about the condition of yogurt and milk because of
mold when it is still within its expiry date........................................................................38
Figure 3.2 Fishbone Diagram...........................................................................................39
Figure 3.3 Group A..........................................................................................................44
Figure 3.4 Group B..........................................................................................................44
Figure 3.5 Group C..........................................................................................................45
Figure 4.1 RFID Simulation.............................................................................................48


INSTRUCTOR’S COMMENTS
Businesses play a significant part in the development of a country's total economy
in today's economy. Vietnam’s economy is presently opening up, generating a lot of net
profit for domestic businesses to access new items and race their products overseas.
Vietnam's wide admission to the World Trade Organization (WTO) has created a very
dynamic competitive environment for local companies, with numerous potential and
significant threats. To survive Domestic companies are being compelled to modify their
management practices to enhance product quality, decrease product costs, and minimize
manufacturing expenses to ensure their goods' competitiveness your company.

Currently, inventory management is regarded as a critical step in corporate
governance, but it is not always recognized and given the attention it deserves in
domestic companies in general and those in domestic enterprises in particular business,
particularly in the dairy industry As a result, we chose to pick the topic “Inventory
management at Vinamilk’s to gain a basic understanding of inventory management in a
firm can make suggestions to increase the management's efficiency” .

1


CHAPTER 1: THEORETICAL BASIS OF INVENTORIES IN
THE ENTERPRISE
1.1 Inventory - inventory management
1.1.1 Concept of inventory
Inventories are items of product that a firm keeps for final sale, stocks that a
company makes for sale, and the materials that go into the product. In other terms,
inventory is the total of all idle resources that are ready to be used in the future. Raw
materials, spare components, unfinished items, semi-finished products, and final products
are examples of warehouse goods.
As a result, inventory is the connection between the production and sale of items,
and it is a component of current assets, accounting for a significant amount of total assets,
and it plays an essential role in the production and business of businesses. Inventory is a
list of goods and items that a company has on hand, or the materials and products
themselves. Inventory management may cut expenses and boost revenues for a firm if
done correctly.
1.1.2 Inventories in the enterprise
a. Definition
Inventories are short-term assets that exist in physical form and can be weighed,
measured, measured, and counted on a regular basis, such as: purchased tools but not yet
put into use, finished products that have not yet been sold, etc. goods purchased but put

into use, raw materials in stock, goods in the process of production in progress, etc.
b. Characteristics
Inventories are part of the enterprise's short-term assets and play a significant role
in the current assets of most businesses that engage in manufacturing and commercial
operations. Because the enterprise's inventory is derived from a variety of sources with
varying liquidation costs, the original cost of inventory varies. According to the VAS 02
2


accounting standard, inventories are calculated at cost; however, if the net realizable
value is less than cost, it must be computed at the net value to be realizable. The cost of
gum inventory includes the acquisition, overhead, and other directly related expenditures
incurred to bring the inventory to its current location and condition.
Inventories are actively involved in the Enterprise's production operations, in
which there are regular and frequent transactions, through which inventories are always
altered in terms of physical form and transformed into commodities. Currently held assets
(cash, work in progress, finished goods, etc.)
Inventories in the Enterprise come in a variety of shapes and sizes, with varying
trade item attributes and storage circumstances. As a result, inventories are frequently
kept and stored in a variety of locations, depending on the nature and score of each sort of
inventory.
1.1.3 The role of inventory in the business
a. Improve service level
In the course of manufacturing and business, the Enterprise may be required to
return sold items owing to poor quality or technical faults. Enterprises might take
inventory to make up for exports or provide the best value to their customers. Choosing
items based on demand helps to enhance the Enterprise's quality of customer service,
establish a long-term commercial connection, and provide income for the organization.
b. Reduce total logistics costs
The administration of the transportation and storage of raw materials,

manufacturing processes, completed goods, and associated information from the point of
origin to the point of ultimate consumption at the request of the consumer. It also covers
waste collection in a broader sense.
c. Responding to unexpected orders

3


If the quantity is modest or pre-ordered, goods made or received by the firm are
sold directly to customers at the company’s stores or distribution agents. However,
businesses will occasionally receive a few unexpected orders, huge orders that the firm
would be unable to execute promptly. Inventory assists firms in dealing with the problem
of these unanticipated items.
d. Selling seasonal items throughout the year
Seasonal items are goods and completed products with a short shelf life (less than
three months) such as food, food, animal products (such as milk, animal fat, and so on)
that are available at a certain period. Businesses gather a significant number of seasonal
items during particular periods of the year that have not found a consumption point, and
the pressure from the product's shelf life forces the firm to deal with it promptly.
Storing seasonal commodities and finished products after basic processing allows
things to survive longer, resulting in greater consumption and fulfilling client demands
for a longer period.
e. Speculation waiting for price
Speculation is the subject's conduct, which involves taking advantage of the
market's decline to "accumulate" things and goods and profit once the market has
steadied and benefit from the difference in prices the products that the speculator can
manufacture or purchase on the market. This move decreases the supply of the product in
that market while without reducing the quantity sought. Alternatively, demand will
double as much as supply, raising the price buyers are willing to pay to get the item.
f. Solve deficiencies in the system

Normally, the corporation removes a tiny quantity of the completed product during
the manufacturing and commercial processes. In most cases, only a tiny amount of
completed product is utilized in interviews (for the production process, business
management, sales)... In the event of a shortage, businesses can pull products from
4


warehouses and maintain the flow of manufacturing, sales, or company management
systems.
1.1.4 Classification of inventory
a. Inventory classification based on usage
This criteria groups inventories with the same goal of usage, regardless of their source,
specification, or quality... As a result, the enterprise's products warehouses are classified
as follows:


Inventories reserved for production: these are all inventories that are held to be
used directly or indirectly in manufacturing operations, such as raw materials,



semi-finished products, tools, and unfinished goods.
Inventory reserved for consumption: represents all inventories held for
commercial sales, such as items, finished products, and so on.

This classification assists in the proper use of corrugated iron while also creating
favorable conditions for managers in the process of planning, predicting purchasing,
preserving, and stocking inventory, ensuring timely supply of inventories for production
and consumption with the lowest purchasing and preservation costs to improve the
efficiency of enterprise production and business activities.

b. Classification of inventories by origin
According to this criterion, inventories of the same origin are classified into a
group, regardless of what type, specification and quality are used. Accordingly, inventory
in the enterprise is divided into:


Inventory purchased, including:
 Goods purchased from outside are all inventories purchased by the enterprise
from suppliers outside the business organization system of the enterprise.
 Internally purchased goods: are all inventories purchased by the enterprise
from suppliers in the business organization system of the enterprise such as
purchasing goods between units affiliated to the same company...
5


 Self-processed inventory: is the entire inventory that is produced and processed
by the enterprise.
 Inventory imported from other sources: such as inventory imported from a
joint venture...
This classification helps to identify the constituent elements in the original cost of
inventory, in order to correctly and fully calculate the original cost of inventory according
to each source of formation. Thereby, helping enterprises assess the stability of the source
of goods in the process of planning and estimating inventory. At the same time, the
detailed classification of inventory purchased from outside and purchased internally helps
to accurately determine the value of the enterprise’s inventory when preparing the
Consolidated Financial Statements.
c. Sorting inventory based on use needs
According to this criterion, inventory is divided into:


Inventories used for production and business: reflect the value of inventories that



are reasonably stored to ensure normal production and business activities.
Unused inventory: Reflects the value of highly stocked inventory than reasonable



reserves.
Unused inventory: reflects poor or degraded inventory that is not used by the
enterprise for production purposes.

This classification helps to assess the reasonableness of inventory, determine the
object to make provision and the level of provision for devaluation of inventory to be
made.
d. Classification of inventory by storage location According to this criterion, inventory is
divided into:


Inventory in the enterprise: represents the whole inventory kept at the firm, such as
items in stock, counters, tools, materials in stock, and being utilized...

6




Inventories outside the enterprise: All inventories held by units, organizations, and
persons outside the enterprise, such as products for sale, commodities in transit,

and so on.

This categorization aids in determining material responsibility for inventory and
serves as a foundation for accounting for the value of inventory when it is lost or
destroyed during storage.
e. Classification based on standard number 02
Standard No. 02 is one of 26 accounting standards issued and announced under
Decision No. 149/2001/QD-BTC dated December 31, 2001, of the Minister of Finance.
Based on this standard, inventories are classified into:


Goods purchased for sale: goods in stock, goods purchased on the way, goods sent




for sale, goods sent for processing...
Finished goods in stock and finished products for sale.
Work in progress and unfinished service costs: These are unfinished products and
finished products but not yet completed procedures for warehousing of finished



products.
Raw materials, materials, tools: Including inventory, sent for processing and
processing bought is on the way.

The classification and determination of which goods belong to the enterprise's
inventory affect the accuracy of the inventory reflected on the balance sheet and affect
the items on the income statement. Therefore, the classification of inventory is necessary

for every business.
e. Classification of inventory according to the ABC technique
This technique divides inventory into 3 groups: group A, group B, group C according
to their annual criteria. Inside:
Annual value = Annual demand Purchase price per unit

7


Specific standards of each inventory group are determined as follows:


Group A: includes the goods with the highest annual value, reaching 70-80% of
the total value of inventory and accounting for about 15% of the total inventory.



Features of this product group:
 High supplier selectivity
 Need the accuracy of quantity and order time
 Need to buy continuously
Group B: includes goods with average annual value, reaching 15-25% of total



inventory value and accounting for about 30% of total inventory.
Group C: includes low-value goods, accounting for about 5% of total inventory
value and accounting for 55% of total inventory. This product group needs:
 Simplify the purchasing process
 Long time between orders

Source: Slimstock
Figure 1.1 Classification of inventory according to the ABC technique
The effect of ABC analysis in management

8


 The sources of capital to buy group A products need to be more than that of
group C. So
Appropriate investment in group A because this is a product that brings a lot of profit
value.
 Group A goods should have priority in the stages of management and regular
inspection. Making accurate reports will help businesses ensure safety in
production, avoid risks and losses.
 It is necessary to pay attention to the forecasting stage of group A more


carefully than other groups.
ABC analysis technique helps to improve the level of warehouse staff because



they regularly perform inspection and control cycles for each group of goods.
In short, the ABC analysis technique will bring better results in forecasting,
controlling, ensuring the feasibility of supply, and optimizing inventory.

1.2.

Enterprise inventory management

1.2.1. Business Overview
According to the Enterprise Law 2004, an enterprise is an organization with its
own name, assets, transaction office, and registered establishment in accordance with the
law for the purpose of doing business. Vietnamese Enterprise means an Enterprise
established or registered under the laws of Vietnam and having its head office in Vietnam.
1.2.2. Inventory management in the Enterprise
Inventory management is the management of resources to maintain appropriate
inventory levels to meet production demands, satisfy customer expectations, and reduce
inventory costs for organizations.
Inventory management is a complicated task with two opposing sides. On the one
hand, businesses must expand inventories to provide ongoing, uninterrupted production
and adequate client service. Increased inventory, on the other hand, leads to an increase in
inventory-related expenditures such as storage and management. As a result, businesses
strive to strike a balance between the degree of investment in inventory and the
9


advantages received from meeting production and customer demands at the lowest
possible cost.
A company's inventory is one of its most valuable assets. In retail, manufacturing,
food services, and other inventory-intensive sectors, a company's inputs and finished
products are the core of its business. A shortage of inventory when and where it's needed
can be extremely detrimental.
At the same time, inventory can be thought of as a liability (if not in an accounting
sense). A large inventory carries the risk of spoilage, theft, damage, or shifts in demand.
Inventory must be insured, and if it is not sold in time it may have to be disposed of at
clearance prices-or simply destroyed.
For these reasons, inventory management is important for businesses of any size.
Knowing when to restock inventory, what amounts to purchase or produce, what price to

pay-as well as when to sell and at what price-can easily become complex decisions.
Small businesses will often keep track of stock manually and determine the reorder points
and quantities using spreadsheet (Excel) formulas. Larger businesses will use specialized
enterprise resource planning (ERP) software. The largest corporations use highly
customized software as a service (SaaS) applications.
To successfully manage the inventory system, expenses must be minimized
through the selection of inventory control methods and the computation of inventory
system characteristics such as optimal order size and optimal manufacturing batch size...
All businesses keep an inventory level at all times for the following purposes






Maintain operational independence
Respond to variation in product demand
Active in production and business
Actively source raw materials in the production and business process
Take advantage of the economic factor when ordering in bulk, the price factor...
 Functions of Inventory in Business

10




Ensure goods have sufficient quantity and structure, do not interrupt the selling



process, contributed to improving business quality, and avoid stagnation of goods.
Ensuring the preservation of goods in terms of value and use-value, contributing to



reducing damage and loss of goods causing loss of properties for the Enterprise.
Ensure the quality of the Company's capital exists in physical form at an optimal
level to increase the efficiency of capital goods and contribute to reducing the cost
of goods preservation.
 Inventory management is critical in business.
Inventory management - a component of current assets - is essential economically

since inventory is one of the currents assets in particular, and assets in general, with high
enterprise value. Proper management and usage of liquid assets have a significant impact
on the accomplishment of routine tasks and company requirements. One of the reasons
for the company's challenges in production and commercial operations is the ineffective
management of liquid assets.
Supply Inventory: This inventory provides for some independence from the
supplier and a balance of shipping and purchase expenses. Materials that are no longer
commercially viable should be kept. It is feasible to pick the solution "when there is a
fresh need to buy" for materials with high economic efficiency, but this requires
balancing consumer demand and supply department delivery time use of the product.
 Finished goods inventory: is the task of companies that specialize in selling
goods to be stocked. For other companies, this type of inventory allows for
adaptation to changing customer needs. This need is constantly fluctuating. To


meet these needs, the following methods can be applied:
Ready to meet demand as soon as required by easily mobilizing equipment and



labor resources (temporary labor resources)
Can be produced immediately after the order, which means that the inventory must
also be available

Inventory of semi-finished products. For three main reasons:

11




Batch production, there is a transition period from the day production line to




another product type.
Need to balance the operating rhythm between machines
Backup in case the machine is negligently damaged and discarded.
 Inventories of tools and spare parts: warehouses of tools used in the activities
of factories - factories (equipment and tools for machine manufacturing,
tooling, and molds in product engineering).
It is typical for manufacturing companies to retain an adequate amount of

inventory at each stage of the production process, from raw materials through completed
goods. Meanwhile, commercial companies such as wholesalers and retailers simply need
to hold inventory in a single form: completed goods ready for consumption. However, the

amount to which manufacturers' inventory investment is dependent on commercial
businesses' distribution capacities. Even among distributors, the degree of inventory
investment varies significantly. As a result, inventory stocking plays a critical role in
production by balancing two factors: risk and cost and business activities of enterprises.
Having a little or a lot of stock or no inventory also causes certain and
unpredictable risks for businesses. Losing the trust of customers, delaying production
plans... are the main reasons why stockpiling inventory is a necessity.
Therefore, businesses need to find a way to find a balance between investment in
inventory and the benefits of satisfying production needs with meeting consumer needs in
terms of minimizing costs.
1.2.3. Costs and planning in inventory management
1.2.3.1. Inventory Costs


Order cost: all costs related to the establishment of orders, including the costs of
sourcing goods, performing the order process (transactions, negotiations, signing



contracts, back-and-forth notifications).
Holding costs: Holding costs are the additional costs involved in storing and
maintaining a piece of inventory over the course of a year. Holding costs are
12


computed in the economic order quantity calculation that businesses use in order


to decide the optimal time to order new inventory.
Purchase cost: is the cost calculated from the volume of goods of the order and the

purchase price of a unit of goods. Usually, purchase cost does not affect the



inventory model much, with the exception of the quantity deduction model.
Loss cost without inventory (out of stock)
 Out-of-stock damage costs can occur whenever a business is unable to deliver
because the demand for goods is greater than the amount of goods currently in
stock.
 When raw materials run out, the cost of damage due to production stoppage
 When the total inventory of unfinished products runs out, the production plan
will be changed, leading to production stagnation.
 When finished product inventory runs out, profits decrease in the short term if
a customer decides to buy a product from a competitor and may lose that



customer in the future.
Carrying cost: Carrying cost is the amount of money that a company spends on
keeping goods over time. It is the expense of owning, storing, and stocking the
products.

1.2.3.2. Inventory planning
Cycle stock: according to Unleashed Software, cycle stock inventory is the
percentage of an inventory that the seller cycles through to meet regular sales orders. It is
part of the seller's on-hand inventory, which comprises all of the products in the seller's
possession. A retailer's on-hand inventory, for example, might comprise products on shop
shelves as well as the majority of those in a store room or stock area. Cycle stock
inventory refreshes or turns over overtime as new goods replace older ones that are sold.
Safety stock: When real demand exceeds a sales projection or when production

output falls short of expectations, safety stock is generally employed. To reduce lost labor
time, it is critical in production to have raw materials and work-in-progress components
on hand. Safety stock is largely maintained in retail to prevent the danger of stock-outs,
which can result in lost sales and consumer discontent…
13


1.2.4. Factors affecting inventory
The level of inventory of a business depends on a number of basic factors:


Production scale and demand for raw materials for production and business of
enterprises. Reserve needs usually include: permanent reserve, insurance reserve,







seasonal reserve.
Availability of the market.
Time to transport goods from suppliers to enterprises.
Commodity price movement trend
Ability to penetrate and expand consumption markets
Promotions - give away to suppliers

1.2.5. Some models of inventory management
1.2.5.1. EOQ Model
The EOQ model is a quantitative inventory management model, used to find the

optimal inventory level for a business. When using the EOQ model, the following
assumptions should be followed:






Demand in a stable, predictable year
Delivery time does not change, must be determined in advance
Stock shortage does not occur if the order is fulfilled
All orders are received by the business at the same time
Enterprises do not make trade discounts

The goal of the EOQ model is to minimize shipment and storage costs, to minimize
costs. The relationship is shown in the following figure

14


Source: Slide Team
Figure 1.2 EOQ Model
Calculation formula: EOQ=
D = Annual demand
S = Ordering cost
H = Holding cost
1.2.5.2. Just-in-Time
Just-in-Time Management (JIT): This manufacturing model originated in Japan in
the 1960s and 1970s. The method allows companies to save significant amounts of
15

money and reduce waste by keeping only the inventory they need to produce and sell
products. This approach reduces storage and insurance costs, as well as the cost of
liquidating or discarding excess inventory. JIT inventory management can be risky. If
demand unexpectedly spikes, the manufacturer may not be able to source the inventory it
needs to meet that demand, damaging its reputation with customers and driving business
toward competitors. Even the smallest delays can be problematic; if a key input does not
arrive "just in time," a bottleneck can result.
1.2.5.3. Materials requirement planning (MRP)
Materials requirement planning (MRP): This inventory management method is
sales-forecast dependent, meaning that manufacturers must have accurate sales records to
enable accurate planning of inventory needs and to communicate those needs with
materials suppliers in a timely manner. For example, a ski manufacturer using an MRP
inventory system might ensure that materials such as plastic, fiberglass, wood, and
aluminum are in stock based on forecasted orders. Inability to accurately forecast sales
and plan inventory acquisitions results in a manufacturer's inability to fulfill orders.
1.3.

Risks in inventory management

1.3.1. Supply disruption
This is one of the common risks if inventory management is not good. However,
supply disruptions can occur when business purchases are not made.
To deal with this risk, businesses often place orders in advance. Stocking a large
amount of stock is expensive but necessary. As a result, many companies determine the
lowest amount of inventory with effective management.
1.3.2. Variation in product quality
The process of keeping commodities and products needs high levels of assurance.
Quality is an essential aspect that has a direct impact on product consumption. Climate,

techniques and technological conditions of preservation, carelessness of personnel
16


carrying products in the warehouse, and other factors can all cause variations in product
quality.
1.3.3. The company's ability to sell goods
If the company’s capacity to penetrate and expand the market is significant,
implying that the enterprise has a strong demand for product consumption, it is important
to properly estimate the demand for the product.

17


CHAPTER 2 SITUATION OF INVENTORY MANAGEMENT AT
VIETNAM DAIRY JOINT STOCK COMPANY (VINAMILK)
2.1 Overview of Vietnam Dairy Products Joint Stock Company
2.1.1. About Vietnam Dairy Products Joint Stock Company
Business name: Vietnam Dairy Products Joint Stock Company
Short name: Vinamilk
Chairman of the Board of Directors: Ms. Le Thi Bang Tam
Head office: 10 Tan Trao, Tan Phu Ward, District 7, Ho Chi Minh City, Vietnam
Phone number: (84-28) 54 155 555
Fax: (84-28) 54 161 226
Email:
Website: />www.vinamilk.com.vn
www.vuoncaovietnam.com
www.youtube.com/user/Vinamilk
Business registration certificate number: 0300588569
Issue date: November 20, 2003

Place of issue: Department of Planning and Investment of Ho Chi Minh City
Line of business: Milk and dairy products.
Charter capital: 14,514,534,290,000 VND
Stock code: VNM
Certificate of business registration and tax code: 0300588569
18


Source: Brands Vietnam
Figure 2.1 Vinamilk's headquarters
The history of company's foundation
On August 20, 1976, Vinamilk was established on the basis of taking over 3 milk
factories left by the old regime, including:




Thong Nhat Dairy Factory (formerly Foremost factory).
Truong Tho Dairy Factory (formerly Cosuvina Factory).
Dielac Milk Powder Factory (formerly Nestle' milk powder factory) (Switzerland).

1985: Vinamilk was honored to be awarded the Third Class Labor Medal by the State.
1991: Vinamilk was honored to be awarded the Second-class Labor Medal by the State.
1995: Vinamilk officially inaugurated the first dairy factory in Hanoi.

19


1996: Vinamilk was honored to be awarded the First Class Labor Medal by the State
2001-2003: Vinamilk inaugurated the Can Tho Dairy Factory, Saigon, Binh Dinh, Nghe

An
2006: Vinamilk inaugurated its first dairy farm in Tuyen Quang.
On January 19, 2006, the company was listed on the Ho Chi Minh Stock
Exchange. At that time, the capital of the State Capital Investment and Trading
Corporation held 50.01% of the Company's charter capital. On August 20, 2006,
Vinamilk officially changed the company's brand logo.
In 2009, the enterprise has developed 135,000 distribution agents, 9 factories and
many dairy farms in Nghe An, Tuyen Quang. In 2012, the company continued to change
the brand's logo.
In the period 2010 - 2012, the enterprise built a liquid milk and powdered milk
factory in Binh Duong province with a total investment capital of 220 million USD. In
2011, Da Nang dairy factory was put into operation with an investment capital of up to 30
million USD.
In 2016, inaugurated the first dairy factory abroad, which is Angkormilk Dairy
Factory in Cambodia. By 2017, continue to inaugurate Vinamilk Organic Dalat farm - the
first organic dairy farm in Vietnam.
In 2016, Vinamilk company was ranked by Forbes as a billion-dollar enterprise in
Vietnam with a brand value of more than $1.5 billion, In 2020, despite facing the Covid19 pandemic, the company is still determined price increased by 200 million USD
compared to 2019, reaching more than 2.4 billion USD.
According to the financial report of Vinamilk company in the second quarter of
2020, net sales of domestic business reached VND 25,456 billion. Direct exports reached
VND 2,451 billion, up 7.7% over the same period last year. In the first 6 months of 2020,
Vinamilk's net revenue reached VND 29,648 billion, up 6.7% compared to 2019.
20


Up to now, Vietnam Dairy Products Company has exported products to 54
countries and territories with a total turnover of more than 2.2 billion USD. Vinamilk's
stock is classified as a blue-chip stock in Vietnam, for businesses with stable growth and
revenue.

2.1.2. Functions, Objectives and Mission of the Company and each division of
Vietnam Dairy Products Joint Stock Company (Vinamilk)
2.1.2.1. Function
Vinamilk consistently provides worldwide quality nutritional solutions, fulfilling
the demands of all consumers with tasty, nutritious, and healthy products associated with
market leaders. Vinamilk liquid milk, Vinamilk yogurt, Ong Tho and Phuong Nam Star
Condensed Milk, Dielac Powdered Milk, Vfresh Fruit Juice... are all popular.
2.1.2.2. Objective
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Positioning the brand as a pride of Vietnamese people
Building new emotional value of Vinamilk company_ embodiment of life
Constantly developing the scale and stature, implementing the standard of

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covering goods to communes and wards across the country
Reaching out to the most demanding markets such as the US, Japan...

2.1.2.3 Mission
Production and distribution of dairy products
2.1.3. Current business situation
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In 2019: Consolidated net revenue reached VND 56,318 billion in the whole year
of 2019, an increase of 7.1% over the same period in 2018 and completed 100% of
the whole year plan, of which:

The domestic business segment achieved a revenue of VND 47,555 billion, up 6.3%
over the same period last year. Contributing 84.4% to total revenue


Direct export segment achieved net revenue of VND 5,175 billion, up 15.7% over
the same period. Contributing 9.2% to total revenue
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