5 INDUSTRY ENVIRONMENT ANALYSIS (Five Forces Analysis) Threat of New entrants The project and the investment capital for the coal industry not require a large amount of capital for technology, fast execution time, so the coal mining has been very strong recently with the involvement of many spontaneous businesses or individuals Scattered throughout Vietnam, there are many open-cast coal mines, so coal mining is very easy, so there is an increasing situation of illegal coal mining, and there are many new businesses joining the industry because of huge profit opportunities According to a survey by the Vietnam Development Consultancy Institute (CODE), the number of enterprises operating in the field of minerals increased rapidly, by 2007, there were 1,692 enterprises participating in this field, an increase of times compared to 2000 (427 enterprises), an average increase of 21.7% / year Investment of the private economy is on the rise and increasingly accounts for a high proportion of total investment capital (increasing from 10% in 2000 to 75.2% in 2008) (As cited in Tơ Thị Hường& Hồng Kiều Nga& Nguyễn Thị Mười, 2010) Moreover, the reserves as well as the technology level of Nui Beo Coal company in particular and companies of the Mineral Coal Group in general are outdated so the productivity is low, if the exploitation is not enough Domestic demand will lead to Vietnam having to import coal, so the pressure to compete with foreign companies is huge However, with the government's preferential tax policy, the coal industry has many advantages compared to other industries, so it will attract the attention of many businesses in the mining industry that want to expand their business (according to V.Vũ, 2013) Bargaining Power of Suppliers Because coal is an irreversible mineral, mining depends on the country's reserves The coal potential of Vietnam is forecasted to be huge, the Northeast coal basin is about 10 billion tons and the Red River Delta coal basin is about 210 billion tons, but the exploration volume so far is very small Over the past 60 years, Vietnam has invested in coal exploration of about 5500 boreholes with a total of more than million meters of deep drilling (mks), concentrated mainly in Quang Ninh Thus, in the Northeast coal basin has proved that more than 2.5 billion tons of coal is real (out of about 10 billion tons of forecast) (As cited in Tô Thị Hường& Hoàng Kiều Nga& Nguyễn Thị Mười, 2010) According to the International Energy Organization, Vietnam has not yet been named on the world coal map and out of about 929 billion tons of reliable coal reserves of the world as of January 2006, Vietnam is only included among countries The rest of Asia is not in the OECD group with a total reserve of only 9.7 billion tons (as cited in Dautuphaisinh.com, 2017) Mining business contains many risks, many dangers, hard Obtaining one ton of open-cast coal must remove to 10 cubic meters of rock Getting 1,000 tons of coal in the pit must dig for kilns, must pass stone milling, mud milling, sand milling and lots of water bags hanging over the head For nearly 40 years after the liberation of the Mining Region, although the Soviet Union designed and provided aid to the most advanced production line, the output of three open mines Deo Nai, Coc Sau and Ha Tu was only reached one million tons / year For underground mines, the average output is only 200,000 to 300,000 tons / year - including well mines Mong Duong cost nearly billion rubles (that period was equivalent to billion USD) Now the big open mines have surpassed the output of million tons, the underground mines have the output of more than million tons Not only that, the large open mines also extend the service life by 25 years, boldly exploiting down from minus 150 to minus 350 meters above the sea (as cited in Petrotimes, 2013) Bargaining Power of Buyers Nui Beo’s products are all kinds of coal, so the company's main subjects are people, and the companies use coal for production and business such as thermal power plants, cement companies The recent economic growth has caused the coal demand of plants to increase Coal industry is tending to increase coal prices to ensure to cover production costs, but the coal price increase has affected many operations of the plants, so many businesses have reacting to this move of the industry Although coal price for electricity in 2009 has increased by 27% compared to 2008 and this year continues to increase by at least 28% compared to 2009 as announced recently, but coal industry still thinks that is not enough and needs to The increase is due to the fact that the starting point of coal price before rising is low Not only that, the additional amount of Vinacomin from the coal price increase for electricity is also considered by Vinacomin to be "overtaken" because the cost of production of coal mining units is also increasing significantly due to the increase in gasoline prices If petrol price is still high, Nui Beo JSC has to spend money for this expense, so the gain from raising coal price to electricity is not enough to compensate (as cited in Vietnambiz.vn, 2019) Intensity of Rivalry Among Competitors Vietnam National Coal-Mineral Industries Group is mainly responsible for the development of the coal industry, supplying domestic coal and acting as a focal point in coordination with major coal consumers to import coal for development needs socio-economic of the country Currently, most of the coal companies listed on the stock exchange are subsidiaries of Vietnam Coal and Mineral Group (Vinacomin holds 51% of the shares) so the competition between companies on the exchange is zero Coal industry is a key economic sector, so it is adjusted and regulated by the State's development policies and strategies Depending on the situation of the world market and the demand for domestic coal, the State has directed the activities of Vietnam Coal and Mineral Industry Corporation As a subsidiary of Vietnam National Coal - Mineral Industry Group, the Nui Beo’s output, revenue, and output plans are governed by the Group through the annual Contract of Contract for Mining Therefore, the exploitation policies and the general development strategy orientation of Vietnam Coal - Mineral Industry Group will create favorable conditions or create difficulties for the Company's development (as cited in Vinacomin, 2018) Threats of Substitude products The purpose is to generate heat energy, so there are now many products that can replace petroleum coal, electricity, wood, solar energy, and especially nuclear power If coal prices are too high, many businesses will also switch to other sources of energy, so competition between industries is very high However, the use of these alternative products requires factories to have advanced technology levels, while at present, the technological level of our factories is backward so in the coming time, switching to alternative products is a bit difficult (according to Nguyen Trong Binh, 2009) References Tơ Thị Hường& Hồng Kiều Nga& Nguyễn Thị Mười (2010, July 30), Coal Industry Analysis Retrieved from https://text.123doc.net/document/32576-phan-tich-nganh-than-mohinh-porter-s-5-forces-swot-trien-vong-trong-tuong-lai-pdf.htm V.Vũ (2013, September 3), Too many incentives for the coal industry Retrieved from https://nld.com.vn/kinh-te/qua-nhieu-uu-dai-voi-nganh-than-2013090304204067.htm Dautuphaisinh.com (2017), Coal Industry Report Retrieved from https://dautuphaisinh.com/wp-content/uploads/2017/06/Final-BC-nganh-than.pdf Petrotimes (2013, August 19), Coal industry: Difficulties are too urgent! Retrieved from http://vinacomin.vn/tin-trong-nuoc/nganh-than-kho-khan-da-qua-cap-bach-5888.htm Vietnambiz.vn (2019, October 9), The pressure on the coal industry is getting higher Retrieved from https://vietnambiz.vn/ap-luc-de-len-nganh-than-ngay-mot-cao20191009154748102.htm Vinacomin (2018, January 10), History of formation and development Retrieved from http://www.vinacomin.vn/gioi-thieu-chung/lich-su-hinh-thanh-va-phat-trien201506031201389356.htm Nguyen Trong Binh (2009, February 10), Diversification of energy sources - Development trend of the future Retrieved from http://tietkiemnangluong.com.vn/tin-tuc/pho-bien-kienthuc/t6256/da-dang-hoa-cac-nguon-nang-luong xu-the-phat-trien-cua-tuong-lai.html? fbclid=IwAR1qUYoLyA2UQ4PVRQUWGwQuQuued7WK4rVSTmxYuondzlaV7x5Ct_bhC8 ... for domestic coal, the State has directed the activities of Vietnam Coal and Mineral Industry Corporation As a subsidiary of Vietnam National Coal - Mineral Industry Group, the Nui Beo s output,... economic growth has caused the coal demand of plants to increase Coal industry is tending to increase coal prices to ensure to cover production costs, but the coal price increase has affected... because the cost of production of coal mining units is also increasing significantly due to the increase in gasoline prices If petrol price is still high, Nui Beo JSC has to spend money for this