Our supply chain department comprised of 5 key divisions, including procurement, planning, logistics, warehousing and production.
MATERIAL PROCUREMENT
Our key raw materials included:
- For sauces: anchovies, dehydrated vegetables, soy, chilies, and various flavorings and spices
- For instant noodles: flour, palm oil, dehydrated vegetables, and various flavorings and spices
- For instant coffee: coffee bean, soluble coffee, sugar, creamers, and various flavorings and spices
- Packaging materials: paper labels, carton boxes, polypropylene or paper-based cups/bowls, plastic bags and glasses are significant components in the production cost.
Our purchasing division at our Ho Chi Minh City headquarters is responsible for sourcing and negotiating with suppliers for all of our raw materials. Our subsidiaries then enter into the agreements with our suppliers negotiated by the purchasing team.
Our purchasing team is also responsible for developing and maintaining the optimal number of reliable suppliers to meet our requirements. The department currently procures raw materials from over 160 suppliers under long-term contracts to ensure consistency and high quality.
Suppliers whose long-term performance record with us demonstrates reliability are considered "approved suppliers” and will continue to be engaged under long-term contracts. This strategy helps us to minimize the risk of working with suppliers who under-perform by missing deliveries, supplying materials of inconsistent quality or that are not in conformance to specifications, or unexpectedly increasing prices.
Production Facilities
We currently operate six production facilities, at Binh Duong, Tan Binh, Phu Quoc, Hai Duong, Dong Nai and Binh Thuan. These facilities allow us to manufacture products with consistent taste and texture, further strengthening the quality of our brands.
We are expanding our Binh Duong facility to accommodate the increase in sales volume we have experienced since 2007 and we expect that it will become our principal production facility. The initial phase of this expansion was completed in 2010 and was dedicated to automating the fish sauce production line. The final phase of expansion is expected to complete by early 2014 which will house our automatic soy sauce and chili sauce production lines.
We recently put the new facility of Vinacafe Bien Hoa in operation. This facility in Long Thanh Industrial Park will increase the Vinacafe’s instant coffee production capacity by 3,200MT per annum.
LOGISTICS & WAREHOUSING
We operate five distribution centers, strategically located in the Binh Duong, Tan Binh, Da Nang, Hung Yen and Hai Duong provinces to provide our distributors with products within 24 hours of an order being placed. These distribution centers collectively handled more than 800,000 pallets in 2012.
The map and table below show the location of the distribution centers throughout Vietnam and provides a summary of the number of distributors, salesmen and points of sale by region as of December 31, 2012:
PRODUCTION LINE VIDEO
