Factory

YOUNGONE

YOUNGONE AT A GLANCE
2.1 YONGONE Corporation, Seoul based Korean Company founded in 1974. YONGONE Corporation today is a world class and the largest supplier of outdoor clothing and sportswear, such as athletic, active and causal sports apparel including sports shoes backpack etc. The operation of the company is pretty much spread around the globe. The most significant one being in countries like Bangladesh, India, Thailand, Vietnam, China, Korea, EL Salvador, Mexico, UK, Sweden and Switzerland.

The scope of the report is the Export and Import of YONGONE Corporation in CEPZ, Bangladesh. In the edge of competitive international business, it is evident that countries are more involving in international trade. Without sound knowledge of import and export any Corporation can’t operate its business smoothly if it is hundred percent exports oriented.

During preparing my report, I’ve detected some problems of my company. In the light of those problems I’ve mentioned some recommendations. I strongly trust that if the management of the company follows my recommendation, it will help the company to achieve their desired goals in the long run.
2.2 HISTORICAL BACKGROUND
YOUNGONE CORPORATION, a Seoul based Korean Company founded in 1974. The company increased its presence in the active wear market and is now involved in the cutting edge technology of garment design & manufacturing. Today it is the biggest vendor for some top-end active wear brands of the US and Europe. The operation of the company is pretty much speed around the globe. The most significant ones beings in countries like Bangladesh, India, Thailand, Vietnam, China, Korea, USA, EL Salvador, Sweden, Uk etc. The initial venture of manufacturing down proof & CWS garments turned out to be a success story.

2.3 YOUNGONE Bangladesh Chapter

YOUNGONE recognizes Bangladesh as a land of enormous investment potential for it’s investment friendly environment and availability of an industries of an industries work force and pool of professionals. YOUNGONE Corporation’s first overseas operation got of the ground in the post city of Chittagong back in 1980 and that was the first foreign investment in woven sports jacket in the country. It moved into Chittagong Export Processing Zone in 1987 after forming a new company named YOUNGONE (CEPZ) Limited. The quality and dedication of workers led YOUNGONE Corporation to progressively invest further in Bangladesh and that trend continues till today.
YOUNGONE Corporation set the following factories in CEPZ, Chittagong & DEPZ, Savar, Dhaka during 1987 to 2005.

2.4 YOUNGONE Factories in Chittagong EPZ
*                  YOUNGONE SPORTSWEAR LTD.
*                  KARNAPHULI SPORTSWEAR IND. LTD.
*                  LALMAI SPORTSWEAR IND. LTD.
*                  TITAS SPORTSWEAR IND. LTD.
*                  YOUNGONE SPORTS SHOES IND. LTD.
*                  YOUNGNE PADDING LTD.
*                  YOUNGONE GARMENT ACCESSORIES IND. LTD.
*                  YOUNGONE SHOE ACCESSORIES IND. LTD.
*                  SHINHAN EMULSION CO. (BD) LTD.
*                  SURMA GARMENTS WASHING AND FINISHING CO.

2.5 YOUNGONE Factories in Dhaka EPZ
*                  YOUNGONE HI-TECH SPORTSWEAR IND.LTD.
*                  YOUNGONE SYNTHETIC FIBER PRODUCT IND. LTD.
*                  SAVER DYEING & FINISHING IND. LTD.
*                  SAVER SPORTSWEAR CO. LTD.

 2.6 SYNOPSIS OF THE BACKWARD LINKAGE FACTORIES FROM ABOVE

YOUNGNE PADDING (CPZ) LTD (YPL). and YOUNGONE SYNTHETIC FIBER PRODUCT IND. LTD (YSF) in DEPZ, YOUNGONE built countries first non-woven Synthetic fiber factory in Chittagong Export Processing Zone & Dhaka Export Processing Zone to meet the demand of Padding, quilting of RMG sector in home and abroad. The Global Market by exporting outstanding quality products at competitive price.
As a pioneer YPL & YSP has been enjoying the unique position in manufacturing of different types of padding, Quilting (Normal) & Computerized with various design. In terms of necessity and to support the backward linkage industries recently YOUNGONE introduce the items of “NON-WOVEN INTERLINING” in YSF located at DEPZ, Savar, Dhaka.
Hence, YOUNGONE offer PACKAGE DEAL, ONE STOP service like padding, quilting (Normal & Computerized) and interlining for its user from YPL & YSP.
Thus, YPL & YSP are capable enough to fulfill the requirement of our esteemed customers with our diversified range of quality products by adopting modern technology and upgrading time to time.  
 2.7 SAVER DYEING & FINISHING IND. LTD. (SDF)
The first nylon fabric dyeing and finishing plant in the country went into production in early 1996. It evolved from a facility to dye basic lining fabric to its present capability of producing various air texture yarn fabrics with breathable coated fabric for shell. At this point in time SDF industries Ltd. is one of the major fabric vender for YOUNGONE and 100% export oriented garments industries Bangladesh. The valued customers are savings their valuable time to place the order to SDF by short lead time and get part delivery for their smooth production. SDF has earned good reputation in RMG sector of Bangladesh. SDF also explore their market abroad by exporting the Nylon Fabrics.

2.8 YOUNGONE GARMENT ACCESSORIES IND. LTD (YGA)

YGA producing LDPE/HDFE/PP poly & Bilister bag with six solour printing, different shape cutting with self adhesive. There are well equipped workshop service facilities for fabrication, overhauling, refurbishing, repair and maintenance of all kinds of garments machinery. This is the first well equipped workshop in the EPZs.

2.9 SHINHAN EMULSION CO. (BD) LTD (SEL)

YOUNGONE Corporation has set up a resin plant in CEPZ, Chittagong producing resin for Padding, Interlining, Textile (Print Binder), Paint Resin, Floor Coating etc.to support the backward linkage industries for competitive price, SEL is capable to meet the requirement of resin for Padding & Interlining Production for Bangladesh.
Having local workers in it is payroll in 1987, YOUNGONE today  (01-03-07) employs more than 33,800 employs including senior and mid management officials from Bangladesh, Thailand, Korea, Sri-Lanka, Europe, China, USA, Mexico, India, etc.    

2.10 YOUNGONE is now developing an industrial park/ export processing zone of its own, named, “KOREAN EPZ CORPORATION (BD) LTD.”

Located on the south bank of the river “Karnaphuli” in a picturesque natural environment spans over and area of about 2,500 acres. Building and others infrastructure development works are under construction. The zone is expected to as many as 150,000 jobs for Bangladeshi’s and generates other economic activities.
Thus Youngone Corporation in its never-ending drive toward improvement will undoubtedly become the most competitive and reliable supplier and production partner of its buyers.

2.11 YOUNGONE at a Glance

We have the privileged to introduce YOUNGONE Bangladesh as a 100% export oriented foreign owned group of industries doing its business in Bangladesh for nearly 25 years and had already earned a global reputation and fame for its garments manufacturing and export. YOUNGONE is producing High –Tech garments like ski-wear, Down Wear, Jacket Vest, Parka, Jog Suit, Sleeping Bags, Rainwear’s, Hunting Wears, Sportswear, Taped Garments (Seam Sealing & CWS), Casual Shoes, Sports Shoes, Out Sole of Sports Shoes, Hand Gloves, Padding, Quilting, Computerized Quilting, Poly Bags, Nylon Fabrics, Poly Synthetic Fabrics, Taffeta Fabrics, Ripstep Fabrics, Resin, etc. which are exported to USA, Canada, Italy, Switzerland, Hong Kong, Korea, Japan, Thailand, Singapore and European Union etc. Mostly market destinations are North America and Europe and some to South Asian and African countries. Our valued USA and Europe buyers are the North Face, Nike, Puma, Polo, L.L.Bean, Lands‘ End, Tension, Burton, Timberland, Jansports, Decathlon, Diesel, Aigle, Scott, Lafuma, Royal Robins, Odlo, Napapijri, Sanmar, Millet, Poiver, Balance, Woolrich, Spyder, Walls, Market, Marmot, Insport, Snow sports, O’Nill, Eddie Bauer, Tommy, Hill Figure, etc. In the span of last 25 YOUNGONE has established 14 Manufacturing unites at CEPZ and 4 Manufacturing Units at DEPZ. Besides, has its Global Manufacturing Units in Chennai-India, Namdin-Vietnam, Hanoi-Vietnam, Qingdao-China, Celaya-Mexico & Suna Franca- Elsalvador. For its global marketing YOUNGONE is maintaining its Liaison Officers in Idia, Vietnam, Singapore, Hong kong, Bangkok, Seattle-USA, New England, Vicenza-Italy, Bern- Switzerland. This is at a glance the total picture of YOUNGONE Group globally. 


COMPARISON DATA:

DEFINITION OF NO SEWING & SEWING TECHNOLOGY:

No Sewing technology:

It is a unconventional garments manufacturing processes where we use different types of thermoplastic adhesive to joint different fabric par.

Sewing technology:

It is a conventional garments manufacturing processes where we use different types of threads to joint different fabric part . 

FINANCIAL STATEMENT:

Location
2003 CM
2004 CM
2005 CM
2006 CM
2007 CM
2008  CM
BD (CTG)
839915
2137896
2757088
3584876
2589883
2338965
BD (YHT)



39142
109533
85532
QD, China


207210
563287
574565
391362
YNL, Vietnam     



5478
58159
408048
ELS, Elsalvador



65061

11450
Total
839915
2137896
2964298
4257844
3332140
3235357

Location
2003 FOB
2004 FOB
2005 FOB
2006 FOB
2007 FOB
2008  FOB
BD (CTG)
5691509
22646981
35891151
50484090
37498238
36094655
BD (YHT)



898147
2088856
1826545
QD, China


2105008
3619049
13254471
8821746
YNL, Vietnam     



65211
2146348
9743588
ELS, Elsalvador



1184360

126960
Total
5691509
22646981
37996159
56250856
54987913
56613494
 SWOT MATRIX:


STRENGTH

WEAKNESS

1) Corporate name with good reputation
1) Concentration on higher priced unit

2) Good service & warranty
2) Focus on some feature of the garments

3) Extensive R & D Capabilities
3) Heavy investment in tool making

4) Most of the Officers & employee are educated & skill
4) Cost of quality assurance is high 

5) 5 plant location
5)Less capacity to produce Full CWS garments


6) Salary structure is not at expected level

OPPORTUNITIES
POSSIBLE    STRATEGY
POSSIBLE STRATEGY
1) Demand for international Market
1) Expand into foreign market
5) Making low cost equipment
2) Demand for technical garments
2) Emphasize is on best quality garments
6) Making full CWS garments
4) Demand for CWS Garments accessories


5) Demand for good quality garments



        THREATS

POSSIBLE                          STRATEGY

POSSIBLE STRATEGY
1) Lead time of CWS raw material is high
3) Develop CWS raw material
7) Improve salary structure
2) High price of CWS raw material
4) Procure automated  Machine 
8) Reduce price of the garments
3) Increased competition


4) Impending safety regulation


5) Employee turn over is high




FINANCIAL PERFORMANCE OF NO SEWING & SEWING GARMNETS
PRODUCTION STATUS OF NO SEWING GARMENTS:
No of Buyers in different location
Year
Location

BD-CTG
BD-YHT
QD,CHINA
YNL, VN
YLS
2003
7
0
0
0
0
2004
21
0
0
0
0
2005
22
0
3
0
0
2006
21
3
4
1
3
2007
19
4
8
2
0
2008
14
4
7
10
1
In this chart I’ve shown the no of buyers only for CWS in different location of Youngone CWS factory. From this chart we can see that the demand of CWS product is increasing day by day.

No of style in different location
Year
Location

BD-CTG
BD-YHT
QD,CHINA
YNL, VN
YLS
2003
44
0
0
0
0
2004
231
0
0
0
0
2005
277
0
18
0
0
2006
356
15
38
17
5
2007
377
28
68
11
0
2008
330
24
65
30
1

Order qty in different location
Year
Location

BD-CTG
BD-YHT
QD,CHINA
YNL, VN
YLS
2003
128934
0
0
0
0
2004
366473
0
0
0
0
2005
803322
0
34232
0
0
2006
1290310
10493
67860
1464
29609
2007
1050466
68257
224301
70085
0
2008
1054381
56511
135302
172182
3000







CM earnings in different location
Location

BD-CTG
BD-YHT
QD,CHINA
YNL, VN
YLS

839915
0
0
0
0

2137896
0
0
0
0

2718461
0
307264
0
0

3584876
39142
563287
5487
65061

2589883
109533
574565
58159
0

2338965
85532
391362
408048
11450



FOB Earnings at different Locations
Location
2004 FOB
2005 FOB
2006 FOB
2007 FOB
2008  FOB
BD (CTG)
$22,646,981
$35,891,151
$50,484,090
$37,498,238
$36,094,655
BD (YHT)


$898,147
$2,088,856
$1,826,545
QD, China

$2,105,008
$3,619,049
$13,254,471
$8,821,746
YNL, Vietnam


$65,211
$2,146,348
$9,743,588
ELS, Elsalvador


$1,184,360

$126,960
Total
$22,646,981
$37,996,159
$56,250,856
$54,987,913
$56,613,494
From the above diagram we can compare the FOB earnings in different locations of CWS. Finally we can see that BD-CTG is earning more than the other CWS factories
PRODUCTION STATUS OF SEWING GARMENTS:
Quantity Produced at different Locations
Location
2004
2005
2006
2007
2008
BD (CTG)
329826
963986
1135473
829868
896224
BD (YHT)


9234
53923
48034
QD, China

41078
59717
177198
115007
YNL, Vietnam


1288
55367
146355
ELS, Elsalvador


26056
0
2550
Total
329826
1005065
1231768
1116356
1208170
Location
2004
2005
2006
2007
2008
From Last 5 year’s data analysis we have seen that the demand of CWS garments is increasing day by day. This rate of increase of demand of CWS garments is higher than non- CWS garments. In comparison to year 2004 to 2008 the demand increases four times.

CM Earnings At Different Locations
Location
2004
2005
2006
2007
2008
BD (CTG)
1154390
3373952
3974155
2904538
3136783
BD (YHT)
0
0
32318
188731
168120
QD, China
0
143774
209009
620192
402523
YNL, Vietnam
0
0
4509
193785
512241
ELS, Elsalvador
0
0
91196
0
8925




FOB Earnings at Different Locations
Location
2004
2005
2006
2007
2008
BD (CTG)
8245643
24099660
28386820
20746704
22405596
BD (YHT)
0
0
230846
1348076
1200859
QD, China
0
1026960
1492920
4429945
2875168
YNL, Vietnam
0
0
32208
1384179
3658868
ELS, Elsalvador
0
0
651398
0
63750
Total
8245643
25126620
30794192
27908903
30204240
From Last 5 years data analysis we have seen that FOB earning is continuous higher for BD (CTG) in comparison to other location of CWS.
6.3 PROFIT MARGIN:
Companies pay a great deal of attention to their profit margins:

Profit margin                =       Net Income
                                                       Sales
Profit margin for CWS:           

2004
2005
2006
2007
2008
Net income
$188,077
$628,094
$1,146,016
$484,261
$1,030,022
Net sales
$2,137,896
$2,964,298
$4,257,844
$3,332,140
$4,121,990
Profit margin
8.80%
21.19%
26.92%
14.53%
24.99%
  Profit margin for Sewing:

2004
2005
2006
2007
2008
Net income
$98,702
$316,393
$424,979
$370,485
$418,120
Net sales
$1,154,390
$3,517,727
$4,311,187
$3,907,246
$4,228,594
Profit margin
8.55%
8.99%
9.86%
9.48%
9.89%
From Last 5 years data analysis we have seen that profit margin of No sewing garments is fluctuating but profit margin of sewing is more or less steady. In general profit margin of No sewing garments is higher than the Sewing garments. In most cases it two times higher than sew garments. In 2007 profit margin of No Sewing drop badly but in last year it is recovered
 6.4 RETURN ON ASSETS:
ROA is a measure of profit per TK. of assets. It can be defined several ways, but the most common is this.
Return on Assets   =       Net Income
                                      Total Assets
Return on Assets for CWS:                      


2004
2005
2006
2007
2008
Net income
$188,077
$628,094
$1,146,016
$484,261
$1,030,022
Net assets
$6,788,580
$6,976,574
$7,446,560
$6,694,583
$7,133,236
Return on assets
2.77%
9.00%
15.39%
7.23%
14.44%
 Return on Assets for Sewing: 
 

2004
2005
2006
2007
2008
Net income
$98,702
$316,393
$424,979
$370,485
$418,120
Net assets
$6,788,580
$6,976,574
$7,446,560
$6,694,583
$7,133,236
Return on assets
1.45%
4.54%
5.71%
5.53%
5.86%

6.5 PROFIT & LOSS ACCOUNT:

The profit & Loss account measures performance over a year. The Profit & Loss account equation is:
Revenues    –        Expenses             =       Income
Revenues:
 Revenues are the gross increase in owner’s equity resulting from business activities entered into for the purpose of earning income. Revenues usually result in an increase in an asset. They may arise from different sources and are identified by various names depending on the nature of the business. Common source of revenue are: Sales, fees, Services, Commissions, interest, dividends, royalties and rent.
Expenses:
Expenses are the cost of assets consumed or services used in the process of earning revenue. They are decreases in owner’s equity that result from operating the business.
Expenses represent actual or expected cash outflows.
PROFIT AND LOSS STATEMENTS FOR LAST FIVE YEARS (CWS):

2004
2005
2006
2007
2008
Total           asset
$6,788,580
$6,976,574
$7,446,560
$6,694,583
$7,133,236
CM earnings
$2,137,896
$2,964,298
$4,257,844
$3,332,140
$4,121,990
Cost of Products sold
$1,619,339
$1,815,466
$2,365,554
$2,388,154
$2,402,125
Gross Profit
$518,557
$1,148,832
$1,892,290
$943,986
$1,719,865
Overheads
$249,875
$251,555
$255,125
$252,185
$248,405
Operating Profit
$268,682
$897,277
$1,637,165
$691,801
$1,471,460
Provision for Tax
$80,605
$269,183
$491,150
$207,540
$441,438
Profit after Tax
$188,077
$628,094
$1,146,016
$484,261
$1,030,022
From Last 5 years data analysis we have seen that profit of no sewing garments is fluctuating but profit margin of sewing increase after 2004 & after 2006 it is more or less steady. In general profit of No sewing garments is higher than the Sewing garments. In most cases it two times higher than sewing garments. In 2007 profit margin of No Sewing drop badly but in last year it is recovered.
PROFIT AND LOSS STATEMENTS FOR LAST FIVE YEARS (Sewing):

2004
2005
2006
2007
2008
Total            asset
$6,788,580
$6,976,574
$7,446,560
$6,694,583
$7,133,236
CM earnings
$1,154,390
$3,517,727
$4,311,187
$3,907,246
$4,228,594
Cost of Products sold
$763,512
$2,814,181
$3,448,950
$3,125,797
$3,382,875
Gross Profit
$390,878
$703,545
$862,237
$781,449
$845,719
Overheads
$249,875
$251,555
$255,125
$252,185
$248,405
Operating Profit
$141,003
$451,990
$607,112
$529,264
$597,314
Provision for Tax
$42,301
$135,597
$182,134
$158,779
$179,194
Profit after Tax
$98,702
$316,393
$424,979
$370,485
$418,120
From Last 5 years data analysis we have seen that profit of no sewing garments is fluctuating but profit margin of sewing increase after 2004 & after 2006 it is more or less steady. In general profit of No sewing garments is higher than the Sewing garments. In most cases it two times higher than sewing garments. In 2007 profit margin of No Sewing drop badly but in last year it is recovered. 


CONTACT US:

Chairman Office Dhaka:

HASNA VILLA, HOUSE # 14, ROAD # 7C
SECTOR - 3, UTTARA MODEL TOWN
DHAKA-1230, TEL : 880-2-8918453, 8916498, 011-802846, 8413609
FAX : 880-2-8916498


Head Office :

YOUNGONE CORPORATION
YOUNGONE CORPORATION
# 171, 2 - KA MANRI-DONG
CHUNG GU, SEOUL KOREA
C. P. O. BOX : 1204
TEL : 82-2-390-600-6114
FAX : 82-2-390-6600-6603
TLX : YOCORP K 28451


U.S.A Office :

911, WESTERN AVENUE # 411
RYE, NH 03870
PHONE : 206 405 4454
FAX : 206 405 2801


Hongkong Office :

YOUNGONE CORPORATION
UNIT 9-10, 24/F, TOWER-1
EVERGAIN PLAZA
88 CONTAINER PORT ROAD
KANAI CHANG HONGKONG
TEL : 852 2403 5088
FAX : 852 2403 5188


Bangkok Office :

YOUNGONE CORPORATION OFFICE
DONGNAMA TRADING CO. LTD.
23RD FLOOR, UNIT # 2307
RIVER WING WEST EMPIRE TOWER
195, SOUTH SATHORN ROAD
YANNAWA SATHORN
BANGKOK-10120, THAILAND
TEL : (662) 670-1680-4
FAX : (662) 670-1688


Chittagong Office (BD) :
WEST WING
Karnaphuli Sportswear Ind. Ltd.
G. P. O BOX # 543
PLOT # 12-14, SECTRO - 7
CHITTAGONG EXPORT PROCESSING ZONE
CHITTAGONG, BANGLADESH.
PHONE : 88-031-740607-9, 741623, 741625
FACSIMILE : 88-031-740610