As you know that we have been working on 2017 plan together with careful review about 2016. While there are issues and problems from many different angles including the market fluctuation which means that we do not blame the responsibility for factory people, we have to face the fact that by the end of this year, the total loss will be almost $500K or so. Again, I know that there were different expectations and misunderstanding as well as some mis-communications sometimes and specifically, the insert of some difficult and low price orders recently to make things more complicated. But overall, we also had to accept that we could not wait until the last minute to find new orders and actual production result is quite far from plan most of the time. In addition, the control of execution for both production and cost is a bit loose as you have seen the case of overtime payment schedule for Sunday work.
Anyway, like I said that I only want to share and give you a full picture so you can understand better about my situation. In fact, I have been using a lot of personal guarantee to ensure both Vinatex and PPhu for a quick improvement. Otherwise, there would have been a lot of change and more strict control from upper management.
Regarding the plan for 2017, as we all knew very well your role with PPA and your strength in sales, customer service with technical expertise, I would like to continue the previous discussion about the revised changes of your responsibility. Basically, you would be solely in charge of key account Chutex from beginning to overall handle communication, order follow up with Chutex including payment plus other customer development on a commission basis. Of course, we would consider a minimum salary for you plus the car compensation and others. Regarding Chutex orders, we would also guarantee a capacity on the main principle of around 60% as per your estimation in which about 20% can be produced outside PPA with acceptable subcon. We would always give Chutex orders our priority consideration and going together with a clear schedule step by step such as booking plan, confirm order details with material schedule and sample confirmation.....The purpose is to have better and early planning so we would have enough time to prepare as well as backup plan if any. For sure, this year is quite crazy with quiet September and October then suddenly volume goes up a lot by the end of the year but we must try to learn from our own experiences for 2017 or soon to be out of business.
I think that this new arrangement will help you to have less stressful with the crazy production and focus more on your strength with network customer and technical expertise. This also include any business that you can bring to either Vinatex or PPhu as well since we have quite a big network of factory around HCMC and some provinces with 2-3 hrs driving. Therefore, we still manage to use those as subcon and make little money if customers do not have a strict requirement of factory compliance. Frankly speaking, for many different reasons, we had to accept PPA's cost structure as it has been but nobody can make money under these days market condition by just using one factory like PPA.