Ke hoach SXKD cty URENCO ninh binh revised

08
Fall

CORPORATE
BUSINESS PLAN
NINH BINH CITY ENVIRONMENT AND URBAN SERVICES
JOINTSTOCK COMPANY

2016 – 2020 period

November

2016


TABLE OF CONTENTS

2


LIST OF TABLES AND DIAGRAMS

LIST OF ABBREVIATION
COGS

Cost of goods sold

Company

Ninh Binh City Environment and Urban Services Jointstock Company

JSC

Joint Stock Company

MABUTIP

Management Board of Urban Technical Infrastructure Development
Projects (Technical Infrastructure Agency- Ministry of Construction)

M&E

Monitoring and Evaluation

PMU

Project Management Unit

PPC

Provincial People’s Committee

ROA

Return on Assets

ROE

Return on Equity

SOPs

Standard Operating Procedures

T&C CONSULTING

Transformation and Change Management Consulting Company
Limited

WB

World Bank


PREFACE
Along with the economic development towards industrialization and modernization as well as the
fast urbanization all over the country, there exist environmental and infrastructural problems which need to
be solved. Ninh Binh City, with 580,000 citizens, will be extended up to 21,124 ha and will become the city
under the central government by 2030. It is planned with to be a “cultural historical tourist centre which shall
be both nationally and internationally oriented”. Such change will be great attraction to the labor force and
enterprises in the neighbouring areas. The demand for public services increases in both quality and quantity.
Ninh Binh becomes an interesting market for companies supplying utilities services and urban services.
Under these circumstances, strategic mission of Ninh Binh is “to improve opportunities of accessing
stable water supplying services, hygiene and sewage”. It requires Ninh Binh City Environment and Urban
Services JSC (hereinafter referred to as the Company) to be more active, more business and market oriented
to achieve stable development on the basis of stable and high quality services.
Under the Urban Water Supply and Sewerage Project financed by WB, to ensure the management
unit manage and operate the project effectively (total revenue is higher than total cost) and ensure ability of
repayment, based on Operation Improvement Plan (OIP) approved by WB, the Project has recruited
Consultants to develop the Corporate Development Plan in period of 2016 – 2020 for Ninh Binh
Environment & Public Services JSC to assist the Company to be active and flexible in business activities,

improving production and business efficiency and facilitating stable and sustainable development.
To meet the above objectives, the process of “Development of corporate business plan in period of
2016 – 2020 for Ninh Binh City Environment and Urban Services JSC” supported by the Consultant has
been implemented through steps of investigation, comprehensive evaluation on Company’s business
activities and study on development orientation under cooperation with Company’s staffs. The business plan
is developed to achieve the following specific objectives:

(i)

Assist the Company to have clear development orientation in period of 2016 –


(ii)
(iii)
(iv)

2020;
Assist the Company to manage business activities actively and flexibly;
Improve production and business efficiency;
Facilitate stable and sustainable development.

To ensure the feasibility, the business plan of Ninh Binh City Environment and Urban Services JSC
need to be based on maximized mobilization of available resources, improvement of inefficient activities and
making use of potential market oppotunities. Thus, the business plan includes the following main parts:
Part 1: Analyse of Company’s business activities and resources;
Part 2: Analyse of environmental impacts and identification of opportunities and challenges;
Part 3: Identification of business targets and implementation plan;
Part 4: Implementation and monitoring.
Details are presented in the contents of the business plan below.

PART 1. OVERVIEW OF COMPANY AND ITS CORPORATE
DEVELOPMENT SITUATION
1.1. Introduction to Ninh Binh City Environment and Urban Services JSC
Ninh Binh City Environment and Urban Services JSC is working in the fields of operating,
implementing, constructing lighting systems; collecting and treatment the garbage, planting and caring for
public trees to maintain a green, clean and beautiful city. Established in 1986 through the decision of Ha
Nam Ninh Provincial People’s Committee, its main development stages are described as below:
Figure : Main development stages

1986
1996
1997
1999
2010
2014
To date

Urban Construction and Management Company was established by Ninh Binh Province People’s Committee’s decision
Renamed as Ninh Binh Construction Company assigned by Ninh Binh Province People’s Committee’s decision
Recognized as pulic utilities enterprise
Reformed operation system and renamed as Ninh Binh Town Environment and Urban Services Company
Renamed as Ninh Binh city Environment and Urban Services One-member limited company
Equitized and became Ninh Binh City Environment and Urban Services JSC.


Decision No.418/QD-UB dated 12/6/1986 decided to merge Town Construction Group and Public Services
Group into Urban Construction and Management Company oriented and controlled by Ninh Binh Town
People’s Committee.
On 22/8/1996, it was renamed as Ninh Binh Town Construction Company assigned by Ninh Binh Town

People’s Committee according to Decision 1250/QD – UBND of Ninh Binh Province.
On 14/5/1997, Ninh Binh PPC issued Decision 575/QD-UB to recognze Ninh Binh Town Urban
Construction Services Company as a public utility enterprise.
In April 1999, Ninh Binh PPC made decision to reform the management organization and renamed the
company as “Ninh Binh Town Environment and Urban Services Company” (now it is Ninh Binh city).
On 20/5/2010, Ninh Binh PPC issued Decision 486/QD-UB to rename the company as “Ninh Binh City
Environment and Urban Services One- Member Limited Company”.
In implementation of the Plan 55/KH – UBND dated 12/10/2012, decision 209/QD-UB dated 1/4/2013 of
Ninh Binh PPC on equitizing enterprises with 100% of state capital in the province. Decision No. 851/QD –
UBND dated 18/11/2013 of Ninh Binh PPC approving the enterprise value of Ninh Binh City Environment
s
and Urban Services One-member Limited Company for equitization and Decision No. 901/QD-UBND dated
05/12/2013 of Ninh Binh PPC approving the proposal and transformation of Ninh Binh Environment and
Urban Services One-member Limited Company into JSC.

1.2. Business situation of the company in the 2012-2015 period
1.2.1. Situation of technology, technique and sewage treatment system
Basically, the Electronic Systems and Engineering Technology of the compay is primarily focus on
2 fields:

Wastewater treatment technologies and solid waste

reatment technologies. In the former

system,there will be an analysis of the situation of 8 groups, including: Sewage drainage, sewage treatment,
stormwater treatment, surface water collection, sewer outlets, flood protection, river drainage and drainage
basin

Sewerage Network
Sewage from households is discharged into sub-regional sewers, then sewage passes sewer network

level 2, level 1. There is no exlusion of households living along the main roads, who discharge sewage
directly to sewer network level 1, level 2. Sewer network consists of short culverts which directly discharge
water into main sewers and then into Van river through floodgates. Therefore, after sewage from households
is pumped sewers, it will be discharged into Van river.


Wastewater pumping station and treatment plant
Currently, Ninh Binh has no sewage pumping station. There are only drainage pumping stations to
pump water into Van river when the Van river’s water level is high, namely: Bach Cu pumping station, Phuc
Chinh pumping station, Southest City pumping station, Ninh Phong pumping station, Ninh Binh thermo
power plant’s pumping station, Con Muoi pumping station, Hoang Son pumping station, … Besides, pump
stations to serve the agricultural area, although constructed a long time ago but are still working efficiently.

Rainwater drainage system
At the moment, Ninh Binh City uses a shared water sewerage system. The whole city has a fairly
complete sewer system and drainage ditch system; the structure is mainly ditches, covered by reinforced
concrete plates whose rectangular cross section is 0,6 – 1,0m width on average. In the North-Western part of
the city, there are two main drainage canals: The Western drainage canal which has been concreted and has
the average width of B = 4,0m and the Quyet Thang Canal which has also been concreted and has the
average width of B = 2,0-2,5m. In the South-West, there is Bich Dao drainage canal, which goes through
Chan Chim sewer, the main is the main drainage shaft for the most part of the South-West of the city except
for the basin from Road 10 overlooking Day River and from the railway overlooking Van river.
The main feature of the city’s drainage system is that it is closely tied with Van River’s drainage.
When the Van River’s water level is low, all the sewage is discharged directly into Van river. When Van
river’s water level is high and likely to cause flood (heavy rain and flooding period), drainage is carried out
along side with ditch systems and irrigation pumping stations.

Current pumping stations:
•
•

•
•
•
•
•

Bach Cu pumping station: 48000 m3/h
Phuc Chinh pumping station: 4000 m3/h
Southest City pumping station: 12,000 m3/h
Ninh Binh thermal power plant’s pumping station: 8000 m3/h
Ninh Phong pumping station: 28000 m3/h
Con Muoi 9600 m3/h
Hoang Son: 4800 m3/h

The whole city is divided into 6 water drainage basins:

•

Drainage basin I includes inferior between National Route 1A and Day River dike. This has
been a developed urban basin since 1960, whose major axis is Quyet Thang Canal and is
concreted with a basin width of 2.0-2.5 m; when the Van river’s water level is high, water

•

will be drained to Bach Cu pumping station.
Drainage basin II includes the whole Tan Thanh ward, the western part of National Route 1A
and a part of Phuc Thanh Ward, Ninh Khanh Ward from the route to Ninh Tien upwards,
draining water to Do Thien canal and a new canal which flows to Van River. When there is a
heavy rain, rainwater will be drained backwards to Bach Cu pumping station before being

•

pumped to Day River.
Drainage basin III includes Nam Thanh Ward,which mainly drains water to Lam San Lake


and the main drainage canal before water leaks to Van River when the Van River’s water

•

level is low.
Drainage basin IV includes inferior between National Route 1A and the railway. The
terrain in the area is > 3,0m height, never hit by floods and water is directly discharged into

•

Van River.
Drainage basin V includes the Eastern part of Thanh Binh Ward, the whole area of Bich Dao
Ward nearby Canh Dieu mountain and the residential area along National Route 10,
discharging water to Bich Dao Ditch and Chan Chim sewer installed along National Route
10. When there is a heavy rain, water will be drained into the pumping station in the thermal

•

power plant.
Drainage basin VI includes the whole Ninh Phong ward and Ninh Son Ward, water passes
through Chan Chim sewer and then flows to Vac River, when there is a heavy rain which
raises the Vac River’s water level, the Chan Chim sewer gate will be closed, the rainwater
will be concentrated at Ninh Phong pumping station to drain to Vac River.

Curb and gutter systems
On most major routes, stormwater outlets (trash rack bars) are working normally rainwater-drainage
system works quite effectively. There are only some roads such as Luong Van Thang road, when there is a
heavy rain and large flow water, the road is usually struck by flood due to its horse – saddle shape with the
concave middle part, therefore, the whole amount of water can not go through at the same time. Moreover,
broken mainhole cover in several drain lines, results in sand drifting, making sewer line clog in some parts of
the city during heavy rains.

The damanaged manhole cover in Luong Van Thang
Sewer gate system
The drainage system consists of a series of short drain lines , which directly drain water into canals
then to rivers, mostly Van River. The drain lines of the residential areas alongside Van river discharge water
directly into Van River through sewer gates. Therefore, the sewer gates are all high in number and working
effectiently.
The main feature of sewer gates is based on the size of the final drain line flowing to the river. The
gate is rectangular, its slope is the same slope as the slope of the river embankment (normally 1:1.50), its


width is the same as the width of the drainage ditch (B=500-4000), and its height is H = 700 – 2800.
Particularly, there are some small sewer gates which discharge exclusively water from some specific small
drain lines or from some households alongside the river are allowed to be built in shape of the intersection of
circular-shape sewer gate and a slanted surface. The sewers are varied in terms of appearances. Most sewers
are rectangular with the same slope as the slope of the river embankment.

Current situation of Van River water outlet

Solid waste management system (Ctr)
The collection of solid waste from the local areas and transportation of solid waste in Ninh Binh
City is currently the responsibility of the Ninh Binh City Environment and Urban Service Company. The
volumn of the household waste per day is about 85 tons but only 80% of them is collected, mainly in innercity areas. In areas where solid waste collection has yet to be seen, untreated waste spillages are not

concentrated, which causes the unsanitary condition of the city.
There has been a scheme approved by the city for sanitary landfill in Thung Lang, the same solid
waste landfill as Tam Diep, the landfill has room for expansion since the land is 15 ha in width.
In newly constructed areas, garbage collection has not been thoroughly conducted, thus there are
some sidewalks, empty lots are used as trash and construction debris collection area.


Trash, construction debris in the empty lot
1.2.2. Situation of organization, management and human resources
Regarding the organization, currently, the Company is financially managed in the form of equity
capital, with the participation of shareholders from the Board of Directors. The Chairman of the Board of
Directors is also the General Director, which make the management mechanism relatively simple. (see more
at figure 1 below).
Currently, there are total 450 people in the company. The company is divided into 4 departments, 11
professional groups and a unit of residential garbage collection service for 14 wards/communes. 4
departments include the Planning and Technical Department (5 people), which assist the leaders in directing
other departments and production groups to push the business production plan of the year in to operation;
the Accouting and Finance Department (including 6 people) helps the Chairman of Management Board cum
General Director to implement the finance regulations of the State; the Organization and Administration
Department (including 7 people) helps the Chairman of Management Board cum General Director to
implement the following functions: labour organization and management decentralization of officials of
company; and the Sale Department (including 9 people) helps the Board of directors to implement the plans
of management, charging the sanitation fees, decentralizing works.
The professional groups below can be divided into 6 teams, including Environment team Number 1
and Number 2 (93) people – taking charge of sanitation and sewage service; the Park and Plant Nursery team
(22 people) are responsible for services relating to parks, plants (nursery and restoration) and the Martyrs’
Monument; the Tree Planting, Care and Maintenance team (56 people) is responsible for trees related
services (tree-care and tree improvement); Lighting groups Number 1 and 2 (24 people) are in charge of
these following services: lighting, decoration, traffic lights and flashing signs in the city, the Vehicle
management team including 21 people is responsible for such means of transportation as motor vehicles,

garbage trucks, pump station and cemetery; the Construction engineering group takes charge of
manufacturing and installation of mechanical products and public utility, waste collection in the residential
areas (190 people), (see more in Annex 1 – Tasks and functions of professional groups and departments)


Figure . The Company’s Organizational Structure
Environment team No. 1
Environment team No.2
Vehicle management team
Electrical team No. 1
1
Electrical team No. 2
Parkteam
Tree Planting, Care and Maintenance team

Tree planting and improvement team

Planr Nursery team

Pump station and cemetery team
Construction andengineering group

Chairman of Management Board cum General Director
Head of Supervision Board
Vice Director
Accounting and Finance Dept.
Organization and Administration Dept.
Planning and Technical Dept.
Sale Dept.
General Board of Shareholders

Gabage collection

Source: Ninh Binh City Environment and Urban Services JSC (in the report of Human Resources in 2013,
2014, 2015 and the Company’s Organizational Structure)
With regard to academic level, the company’s staffs are mainly high school graduates (35 people,
accounting for 79.6%), 3.4% of the company have recevied Vocational education while University and College
gradutes, which are mostly the Directors and Heads of professional department, make up for 16.9%. With
regard to types of contracts, 24 staffs (54.3%) bid for contracts of indefinite duration, while contracts of
definite duration are signed by 182 staffs (41.2%) and seasonal contracts are signed by 20 people (4.5%).
Diagram : Academic level and types of contract in the company by Oct. 2015


1.2.3. Situation of using capitals and assets
Business capital
Diagram : Business capital sources in 2012 – 2015 period

After the equitization in 2014, the charter capital of the Company is 16,728,430,000 VND, which is equal to


1,672,843 registered common shares. State shareholders account for 83.35% the total amount of charter
capital, the remaining shareholders hold 13.65%. After 2 years running as a JSC. (2014-2015), the business
capital increased by VND 4 billion (VND 3.890 billion). Meanwhile, the mobilization of capital structure of
the company was to increase the proportion of the compay’s capital that is obtained through debt, mostly
short-term lease which must be paid to the sellers in advance, hence, the capital expense is zero.
The corporation's share capital also altered in a positive way, the proportion of loans rose from 7.6% in 2012
to 22.1% in 2015 (see more at Table 3). As can be seen, the company has a tendency to make better use of
financial leverage to boost production and business activities.

Table : Business capital sources in 2012-2015
Unit: VND1.000

Owner’s equity

Payable liablities

Total

LongYear

Owner’s

Other

equity

sources

Total

Short-term

term

liabilities

liabiliti

Total

es
15,891,216

24,073,183

39,964,399

3,368,621

0

3,368,621

43,333,020

36.67%

55.55%

92.23%

7.77%

0.00%

7.77%

100.00%

2012
2,950,0

2013

16,728,430

21,108,567

37,836,997

3,832,410

00

6,782,410

44,619,407

37.49%

47.31%

84.80%

8.59%

6.61%

15.20%

100.00%

16,728,430

15,933,225

32,661,655

7,682,335

0

7,682,335

40,343,990

41.46%

39.49%

80.96%

19.04%

0.00%

19.04%

100.00%

16,728,430

10,270,618

26,999,048

10,542,719

0

10,542,719

37,541,767

44.56%

27.36%

71.92%

28.08%

0.00%

28.08%

100.00%

2014

2015

(Source: Audited Financial Statements in 2013, 2014, 2015)

Situation of using company’s assets and facilities
Diagram : Assets structure in 2012 – 2015


The assets of the company include buildings, facilities, means of transportation and transmission,
management tools and other fixed assets as well as variable assets to manage the business in environmental
sanitation and urban services.
Short-term assets of the company are mainly receivables from customers (accounting for more than
50%), most of whom do not usually pay on time, these amounts tend to increase sharply (by roughly 42%
per year). This shows that when it comes to contracts with large service providers, to build up relationships
and competitive advantages, the company has to rely on deferred sales trust.
The proportion of fixed asstes of the company is above 50% and there has been almost no
changesthroughout the years in terms of value. In 2015, the company invested VND 6,4 billion more but the
depreciation is negligible. This is because the infrastructure system of the company is basically outdated and
couldn’t meet the needs of increasing production and urban services for a fast-growing city in both terms of
width and depth (see more at Table 4).

Table . Assets and facilities in business
Unit: VND 1,000
2012

2013

2014

2015

Average

increase
(%)

#

Indicators

A

A – SHORT-TERM ASSETS

10,700,228

14,936,064

17,250,566

21,821,215

27

1

Cash and cash equivalents

1,617,043

3,339,665

2,907,676

4,462,646

40

2

Short-term investments

0

0

0

0

3

Short- term receivables

5,560,255

7,032,588

11,748,346

16,078,785

42

4

Inventory

1,047,511

550,666

2,058,594

996,828

-2

5

Other assets

2,475,419

4,013,145

535,950

282,956

-51

B

LONG-TERM ASSETS

32,632,792

29,683,343

23,252,952

25,865,316

-7

1

Long-term receivables

0

0

0

0


2

Fixed tangible assets

32,536,646

29,430,142

23,252,952

25,823,977

-7

Orginal Price

70,482,663

75,825,898

75,871,547

82,259,018

5

Depreciation (*)

37,946,017

46,395,755

52,618,595

56,435,041

14

3

Real Estate Investment

0

0

0

0

4

Unfinished long-term assets

0

0

0

41,339

5

Other long-term assets

96,146

253,201

0

0

TOTAL ASSETS

43,333,020

44,619,407

40,503,518

47,686,531

3

Source: Audited Financial Statements in 2013, 2014 and 2015
1.2.4. Business results
Productivity results
Over the past few years, the company has provided services and products in 3 main areas:

•

National services activities as requested by the People Committee of Ninh Binh province

•

given the budget support for implementation, including:
o Waste collection, transport and treatment in the city (for 45 streets)
o Maintenance and repair of drainage system (for 22 streets)
o Street light maintenance and repair
o Park maintenance
Urban services, including:
o Funeral services
o Waste disposal services
o Greenpark services
o Sanitation services
Basic construction activities include participating in some public constructions, installing

•

some public facilities such as the lighting systems or building sidewalks and lawns…
Since the equitization, the services of the company have been much more varied so as to serve the
increasing needs of environmental sanitation and urban services in Ninh Binh city. After 3 years, the
value of services have doubled, from 22,3 billion VND in 2012 to 43,3 billion VND. This is due to the
increase in the value of urban services funded by the State budget (going up by VND 18.8 billion in the
same period of time). The revenue of urban services and basic construction, though witnessing an
increase in value, decreased in proportion, only accounting for 10.9% and 6.9%, respectively in the total
revenue. However, these services are potential to expand in the next years.
Diagram : Proportion of revenue and services provided


Table . The structure of service revenue during the 2012 – 2015 period
Unit: VND 1,000,000; %

2012
#

2015

Items
Value

Proportion (%)

Value

Proportion (%)

1

Revenue from public utilities

16,610

74,39

35,500

82,18

2

Revenue from urban services

2,870

12,85

4,700

10,88

3

Revenue from capital construction

2,848

12,76

3,000

6,94

4

Other revenues

0

0,00

7,091

14

22,328

100,00

50,291

100,00

Net total revenues

(Source: Financial Statements in 2015 and Financial development Strategy in 2016; Equitization Strategy in 2013)

Revenue, cost and profit
Diagram : Profit and revenue in the 2012 – 2015 period


For the last 4 years, the revenue growth of the company has been 31% per year on average, which is
quite a good sign regarding the current scale. However, it can be seen that the growth was not really stable.
To illustrate, the revenue growth in 2013 in comparison with 2012 rose by 40%, but the figure fell
significantly in 2014 (by approximately 10%). In 2015, the company saw a huge increase in revenue (by
78% compared to 2014), which is due to the contract of public utilities and urban services providing which
the company had signed with the Ninh Binh PPC previously.
With the current accounting system, the Cost of Goods Sold (COGS) of the company includes
depreciation of fixed assets, cost of raw materials and direct labor costs for workers (staffs). It can be seen
that, during the period 2013 – 2015, along with the average growth of 17% of revenue, COGS increased by
15% correspondingly. However, when considering the statistics about depreciation in the cash-flows, it is
clear that the depreciation in fixed assets (depreciation in the following year – depreciation in the previous
year) was likely to decrease constantly by 23% on average during the period 2013 - 2015. Thus, the increase

in the costs of raw materials and direct labor costs for workers between 2013 and 2015 would be at around
23%. This change is because in 2015, the company applies the regional minimum wage for all 442 workers,
leading to the significant rise in salary and salary deductions.
The cost for corperate management was controlled at 23% per year from 2012 to 2015, which is
below the rise of revenue, thanks to that, the profit after tax of the company gradually climbed high.
However, the efficiency of the company was still low, profits from profuction were negative in 2012 and
2013. In 2014, although the revenue decreased, the net profit was VND 243,692,000, which then became
VND 502,395,000 in 2015.
Despite the high revenue growth in 2015 (more than VND 22 billion), the profit from production
only increased by VND 258.7 million. This shows that the policy on water taiff being applied for public
utilities services was not really business-oriented.


The application of the current tariff policy has led to relatively no value in basic earning per share
(only more than VND 100), the company cannot attract investment to expand production. Return On Equity
(ROE) and Return On Assets (ROA) are relatively low, although there has been some improvement in 2
years after equitization (see more in Table 2)
Table . Business results during the period 2012-2015
Unit: VND1,000
#

Indicators

1

Revenue from sales of qoods and
rendering of services

2

Deductions from revenue

2012

2013

2014

2015

Average increase
(%)
2012-

2013-

2015

2015

22,328,300

31,208,051

28,215,069

50,291,410

600

0

0

0

3

Net revenue from sales of goods
and rendering of services

22,327,700

31,208,051

28,215,069

50,291,410

31

4

Cost of goods sold (COGS)

20,751,587

29,565,899

24,900,646

45,466,617

30

1,576,113

1,642,152

3,314,423

4,824,793

45

141,240

19,767

16,503

6,413

0

0

0

0

0

0

0

0

0

0

0

0

2,315,569

1,745,013

3,087,234

4,328,811

-598,216

-83,094

243,692

502,395

6

Gross profit from sales of goods
and rendering of services
Revenue from financial operations

7

Financial expenses

5

- In which : Interest expense
8
9

Selling expenses
General
and

administrative

31

0

10

11

Other incomes

848,211

120,111

1,312

0

12

Other expenses

227,701

13,815

17,756

70,962

13

Other profits

620,510

106,296

-16,444

-70,962

14

Total profit before tax

22,294

23,202

227,248

431,433

168

15

Corporate income tax

11,585

19,232

49,994

94,915

102

16

Deferred Tax

0

0

0

0

17

Net Profit after tax

10,709

3,970

177,254

336,518

216

18

Basic earnings per share

106

127

120

0,03

0,01

0,54

0,91

ROA (Profit/ Total assets - %)

0,02

0,01

0,44

0,71

17
15

23

expenses
Net operating profit

ROE (Profit/ Owner’s equity - %)

17

(Source: Compiled from the Financial Statements and the Situation analysis of the Company’s business report)

1.3. General assessment of business situation in 2012-2015 period

Strengths
• Capital resources, system of facilities and infrastructure have
been successively innovated, and improved to generate

Causes
•

The transformation of company
ownership brings both pressure


business after 2 years of equitization

and motivation for solidarity,

• Operating in public services have expanded and upgraded in

determination

capacity, which meets the increasing needs of Local

to

renew

production and business at al

governments, organizations, businesses and citizens.
• Revenue and profit have increased despite the small scale.

levels

The use of capital and assets has been more efficient.
• Rich in experience: the company is also one of the biggest

staffs, workers and labors of the

public-service providers in the province, with 30-year
experience, which have fostered union solidarity among the

•

Company.
The demand

process of urbanization and salary

increase of the citizens in Ninh

•

Binh city
The increasingly
the

care,

Provincial

and

City

Authorities are to build the Green,

orientation in order to attract outside investments, expannd

Clean and Beautiful Ninh Binh

operations and services to promote independence, efficiency

city of tourism.

and profit growth.

Weaknesses
The capital resources are inadequate, fixed assets and

Causes
•

The contract value to provide

insufficient equipments for production have yet to meet

public utilities agreed in the

the demand of improving the quality of environmental and

contract

public services
All the machines and facilities used for environmental

authorities is relatively low and

sanitation services have now been in severe degradation

the service unit price stipulated in

conditions. Some urban infrastructure projects, after being

the Decision No.1667/QD-UBND

handed over to the company with no coordination, have

dated 12/07/2007. The contract

been used inefficiently while the management and

value

maintenance are costly.
The scale of service operations is still small. Received

compensation for the cost and

assets use is fairly low.
Lack of modern and suitable facilities: due to the budget
constraints for buying equipment for production and
business like special suction excavator, thus the company
has to outsource. This eventually raises the whole costs

signed

with

local

not sufficient in comparison with

could

not

ensure

the

provision of high quality services

revenue is insignificant. The efficiency in capital and

•

great

directions and budget support of

years (and about to operate the 2nd equitization) with a clear

•

sanitation

increases sharply along with the

can be roughly considered as monopoly, without any

•

for

(lighting, entertainment,..) have

Code No. 2700135990. 20 business areas of the company

•

company’s

services and other urban services

business registration”, which was issued on 28/02/2014 with

province.
• Experience in equitization: the company have equitized for 2

the

organizational structure and in all

Board of Leaders and staffs for the sake of the company;
• The company has the “Certificate of Joint stock company

negligible competitors neither inside nor outside the

in

•

as demand.
The operating cost increases due
to the rise in the input costs (fuels,
electricity,

water),

while

the

public service charge is difficult


•

and brings down the productivity.
Slow equitization, limited independence.

•

to change.
The low productivity (because of
manual labor and low level of
mechanization) leads to the low
income of the staffs in the
company. It is also hard to attract
the skilled workforce and create
enough motivations to encourage
workers.


PART 2. BUSINESS ENVIRONMENT ANALYSIS
2.1. Analysis of general business environment factors

Factors from general business environment that made impacts on the company’s business activities

are categorized into two groups:
-

Factors from the industry’s environment include: customers, suppliers and competitors;
Factors from macro environments include: institutional policy environment, economic
environment of Ninh Binh province; cultural, social and demographic environment; natural
environment (geography, terrain, climate, river systems).

Level and trend of impacts from those factors to business activities of the Company is demonstrated
in the following figure:
Figure : Factors influencing the company’s business activities

Advantages
Disadvantages
Weak impact

Strong impact
Cultural, social and demographic environment
Economic environment
Natural environment

Providers
Competitors
Customersss


Details analysis of the two groups of factors are demonstrated in the following table:
#

Factors

Characteristics

I

Factors from macro environment

1

Geographic

Located

at

the

boundary

Impacts
of

three There are opportunities for

conditions of geographical areas: North West, the Red
Ninh
Binh River Delta and the North Central. This
province

building

and

operating

the

water drainage system

province is lying among three economic
regions: Hanoi, the northern coast and
central coast.
Terrain: flat terrain and flat slope from the
Northern to the Southern region. The
terrain of the city has been constructed
relatively flat.
River: Ninh Binh city is formed at the mouth
of three rivers, where the Van river and Day
river

confluence

influenced

by

the

hydrological regime of two rivers. At present,
the city is located in the nearly complete

drainage system of the Irrigation sector.
Hydrological regimes of the rivers are both a
water source and the drainage basin of the city.
2

Cultural,
social

- Is a crossroad of cultures, which
and

demographic
factors

falicitates

the

relatively

active

-

There are opportunitirs
for

boost

the

characteristic of provincial culture
- Is the province with long historical and

economy

cultural tradition
- Population of 90 thousand people;

push the development of

including 8 districts, cities and towns
(urban and rural rate)
- The speed of the

provincial

urbanization is rapid (see details in

as

general
well

as

tourism -> a condition to
environmental services

Annex 2)
3

Economic

- Is the gateway and key economic zone

factors

in the North.
- Fast growth
- Provincial Competitiveness

-

Index

11/63
- There is potential for development of

There are opportunities
for the company to
develop
the
environmental services
in the near future..

construction materials and tourism
industry (7 industrial zones and 22
industrial clusters).

- Tourism resources are excellent and
varied with famous landmarks in the
country and have close relationships
with each other. Ninh Binh is one of
the few localities across the country
have many advantages for tourism
development.
4

Institutional
and

policy

environment

- Policies

to

support

enterprise

-

There are opportunities for

development in general in "untying" the

businesses in general and

constraints on business sectors, and

environmental

sanitation

policies to encourage the development of

businesses

particular

environment industry in particular;

increase

- Policies and legislation on environment

in

their

competitiveness.

are more and more improved, which set
higher requirements of environmental
protection services;

- Policy on socio-economic development
and provincial development plan open up
potential opportunities for business.
II

Factors from the industry

1

Customer

- The People Committee of Ninh Binh City

- The big customers are

– is the only customer using 5/9 services

high in loyalty but low in

of the Company. The “order” method is
actually the public service contracts

negotiation advantage
- The small customers are

signed with the People Committee of

quite difficult to exploit.

Ninh Binh City revenue is recognized

based on the amount of work has been
done annually. Hence, the decisive role in


the product, services and support levels
for price is by the People Committee of
Ninh Binh City although there is some
negotiation between 2 parties on the basis
of provincial and city budget balance and
the benefit of the company.

- The remaining 04 service groups have the
potential to expand and develop according
to market rules:

o Administrative

units

(schools,

hospitals, provincial office,..) and
Business units (The board of
managers in markets, restaurants
and other enterprises (Viet Long
Company,

Ninh

Binh

power

company, Xuan Truong Private
enterprise) are customer groups
who pay the reoccuring costs for
Car rental service, Waste suction
service or environmental sanitation
with the likelihood to increase in
the future when Environmental
protection regulations are applied
and tightened.
o Households and individuals are the
extended customer group and will
raise their demand in the future. At
present, the company provides the
waste collection service (collect
money directly from the households
through the staff of the Business
Department of the Company). This
activity, although on a small scale,
witnesses the huge number of
household
much

participation
discussion

without
among