Vegetexco vietnams fruit and vegetables export situation recommendation

Subject Vegetexco Vietnam''''s fruit and vegetables export Situation & Recommendation PREAMBLE On January 2007, Vietnam gets a firm member of WTO, the largest economic commercial playing field on planet[.]

On January 2007, Vietnam gets a firm member of WTO, the largest commercial playing field on planet Taking part in WTO marked a new step onVietnam's international integration WTO creates big opportunities for Vietnam'senterprises, besides challenges difficult to overcome Vietnam agriculture industry isaffected strongly of this event

economic-Vegetexco Vietnam is a state company specializing in manufacturing, processing andtrading fruit and vegetables, agricultural products export with up to 30% of total annualexport value of Vietnam Like other enterprises, Vietnam has taken part in WTO affectsignificantly to the corporation’s producing and trading activities in general and itsfruit and vegetable export activities in particular The corporation has a lot ofopportunities to promote manufacturing and export because markets are expands, tariffbarriers are cut down, demand on fruits and vegetables is increasing However, besides,

it also has to face enormous challenges when integrating, those are fluctuation andtough competition of market economy, simultaneously, it has to accept strictinternational regulars, technical barriers, and open the market, face difficulties in rawmaterials, climate, weather, material and labor prices

After practicing at Vegetexco Vietnam, I have opportunity to learn about its producingand trading operation With a desire to have deeper knowledge on the corporation’sfruit and vegetable export field, as well as a desire to contribute to find out resolutions

in order to intensify this activity in the next time, I chose the subject “Vegetexco Vietnam's fruit and vegetables export: Situation & Recommendation” The report

is divided into 3 parts:

Chapter1 Basic issues on Vietnam's fruit and vegetables export

Chapter 2 Real situation on Vegetexco Vietnam's fruit and vegetables export activities

Chapter 3 Solutions to promote Vegetexco Vietnam's fruit and vegetables exportactivities

My report was fulfilled in a short time so it does not avoid shortcomings, I hope toreceive supports and suggestion

CHAPTER 1 BASIC ISSUES ON VIETNAM’S FRUITS AND

VEGETABLE EXPORT 1.1 Fruit and vegetables export, and role of fruit and vegetables export for Vietnam

1.1.1 An overview of fruit and vegetables export

1.1.1.1 Characteristics of fruit and vegetables commodity

Fruit and vegetables connect closely with life of people They are plentiful of type andtaste; fruit and vegetables products include fresh, processed ones and juice

Characteristics of trading fruit and vegetables: seasonal, dispersive, areal, fresh,unstable

Therefore, doing business in fruit and vegetables needs grasping basic issues:

 Grasping main production, dispersion and concentration areas, as well asentrepôt in order to work out business directions for sellers and customers

 Grasping traditional purchasing trends and areas for fruits and vegetables, it isnecessary for sellers to find out buyers

 Grasping characteristics, qualities and seasonal nature of same types of fruit andvegetables at different areas in order to find out reliable and timely sources

1.1.1.2 Overview of export activities

Export is commercial activities which relate to sell goods and services to foreignmarkets, including re-export

In import- export transaction, buyers are just importers, sellers are exporters, and salesprocess and procedure basically include steps of domestic transaction, however inimport- export transaction, they have to obey tougher conditions in accordance withagreements or international practices

Exporting fruit and vegetables is action that concern selling fruit and vegetableproducts into foreign markets

1.1.2 Types of fruit and vegetables export

1.1.2.1 Direct exports

Direct exports are transactions where exporters enter into direct relationships withimporters overseas and negotiate a contract for the sale of goods and services.Alternatively, exporters may use a commission agent in the overseas market to solicitorders and generally represent the exporter's interests The agent is paid by means of acommission on the value of orders obtained

1.1.2.2 Export through intermediary

Exporters and importers do not directly negotiate conditions of a contract, and theydeal through the third party

At present, popular kinds are intermediary and agency

1.1.2.3 Counter transaction

This is a mode in which export is connect closely to import, an exporter issimultaneous an importer, and it has a characteristic that export commodity quantity iscorrelative to import one

1.1.2.4 Re-export

This is a mode in which a re-export enterprise exports fruit and vegetable goodsimported to the third country, and these goods are not processed in a re-export country 1.1.2.5 International auction

It is a mode which is hold at certain place, there exporters by themselves or an auctionorganization implement selling goods publicly in order to choose a buyer who pay thehighest price

Commodities give to auction are always difficult to standardize There are 2 famousauction centers of fruits and vegetables are Amsterdam and Autuerp

1.1.3 Role of fruit and vegetables export for Vietnam

Export is considered strategic issue to develop economy and implementindustrialization and modernization Of Vietnam's main force export commodities,

agricultural products in general, fruits and vegetables in particular, are major goods In

2007, our whole country's total export value was 48.38 billion USD, agriculturalproduct export value gained 6.2 billion USD, including 300 million USD of fruit andvegetable export value, accounted for a quite big density Therefore, exporting fruit andvegetable play an important role shown on following aspects:

1.1.3.1 Creating major capital sources for importing and building up infrastructures tocontribute to develop the economy

Now our country is in industrialization and modernization process, so it is necessary toset up infrastructure system to serve the economy Accordingly, we must have capitalsource in foreign currency That capital can be mobilized by a lot of ways, such asborrowing, receiving from aid, joint venture, association, or export However, thesafest and solidest capital source is foreign currency from exporting

1.1.3.2 Facilitating to develop related industries

Development in exporting fruits and vegetables will create sufficient opportunity fordevelopment of industries which produce inputs for fruit and vegetables such asseeds, or concerned services forms such as preservation, transport, process, sellingproducts Especially in tough competitive environment, enterprises have to attempt toreduce cost price, improve quality

1.1.3.3 Raising export enterprises' business capacity

Dealing with foreign partners require that Vietnamese companies has to be dynamic,creative, and have management ability, prestige, in order to exist and develop oninternational markets First and foremost fruit and vegetable goods, they are sensibleand sharply competitive commodities on world market because more and more fruitand vegetable export enterprises appear, higher and higher the companies' talent andexperience Thus, companies must usually investigate, renovate and improvethemselves in manufacture and trading as well

1.1.3.4 Contributing to solve employment and ameliorating living conditions

Fruit, vegetable manufacture and process field requires a lot of labor Intensifyingexporting fruits and vegetable not only creates jobs in this industry, but also leads todevelop other industries, create works there It is considered our strategic exportindustry due to we have advantages to develop, including advantage in workforce Andwhen employees have stable jobs and salaries, their living conditions are improved,that contributes to fulfill strategy on the nation's security and society

1.1.3.5 Being basis to speed up international economic integration process

In fruit and vegetable export process, Vietnamese businesses deal with foreignpartners; learn about law, politics, and culture of export markets Therefore, theywiden experiences and business relations At the same time, Government, concernedMinistry and Department support companies as supplying information, creatingfavorable legal corridor for exporting It requires that countries' leaders enlargeexternal economic relations, promotion activities, and market researches

1.2 The tenor of Vietnam's fruit and vegetables export

Fruit and vegetable export activities have manner and execution process is different,they depend on specific commodity, enterprise, but in general, this activity always isimplemented according to following order:

1.2.1 Researching, approaching markets

In this period, companies have to collect information on fruit and vegetable markets,and then analyze them

Companies need collecting information on fruit and vegetable import, manufacturesituation on world market, and target markets, researching consuming trend andfluctuation in price Especially, enterprises must learn carefully about target marketsand competitors At the same time, they have to find out factors that effect to exportactivities such as politics, culture, law, and related conditions, for example,

transportation of import countries.

Businesses always collect information through documents available from means ofmass information, Vietnam's counselors abroad or surveying directly of markets, orthrough workshops and taking part in exhibitions, fairs

1.2.2 Selecting business partners

Selecting business partners is one of elements, which creates success in exportactivities To choose exporting partners, we have to evaluate partners' capacity onaspects such as finance, work force, administration ability, and marketing activities.Especially for foreign partners, companies study their legal entity and prestige.Besides, it is necessary to study partners' viewpoint for establishing long businessrelation In addition, selecting business partners has to notice compatibility in condition

of sales, transport, and payment

1.2.3 Planning export project

Firstly, enterprises must raising objective of exporting fruit and vegetables, selectingbusiness partners Next, companies need estimating criteria in evaluating effect ofexport activities such as norm in effect of direct export, breakeven (minimum exportprice), losses and profits, and other norms Finally, planners have to recommend andevaluate implement ability of the project in economic and social aspects

1.2.4 Dealing, negotiating and signing contracts

Companies choose types of fruit and vegetables export according to above-mentionedones Direct export type always includes steps: inquiry, offer, accept and confirm.After dealing, parties reach to sign an export contract In export contracts, parties have

to negotiate terms on name of commodity, quality, quantity, price, transport, payment,and solving dispute

1.2.5 Purchasing and creating commodity source

Inputs of export fruit and vegetables can be mobilized from different sources asimporting, joint venture, associating, or purchasing in domestic… Enterprises mustcalculate so that resources are stable, prestigious, and have good quality, reasonableprice in order to meet flexibly for production and export, simultaneously, reduce costprice, increase competitiveness on markets Major seed source for production ofVietnamese fruit and vegetables to export has to be imported a lot; this is disadvantage

in reducing cost price and improving competitiveness of Vietnamese export fruit andvegetable

1.2.6 Implementing export contracts

Sequence of implementing export contracts is similar to general export contracts,usually includes steps: applying for a permit for exporting, checking L/C, preparinggoods, chartering (if allowed), taking out insurance (if allowed), doing export customsprocedure, checking goods before exporting, delivering, doing payment procedure,solving dispute (if any) Vietnamese companies always export in accordance with FOB

so they do not take out insurance and charter

1.2.7 Evaluating results of export activities

In this period, enterprises calculate real datum, real criteria of export activity, andanalyze losses and profits, and simultaneously, compare real criteria with estimatedones Thenceforth, businesses can evaluate a result and effect of export activities foreach commodity, market, partner, and find out strengths, weaknesses, in order to havespecific methods to adjust business operations timely

1.3 Factors affect Vietnam's fruit and vegetables export

1.3.1 Common situation of economy, politic, law of world and Vietnam

Together with development of world economy, specialization processes increasinglydeeply Countries produced commodities, which they have comparative advantage onthese goods, export, then export them and import other commodities in order to meetdomestic demand, and improve effect in manufacturing, trading Economy developmore and more, needs for fruit and vegetables increase in types, quality , facilitate toimpulse to produce fruit and vegetables

In recent years, USD has devalued, thus, that makes advantage of fruit and vegetablesexport businesses reduce, especially for Vietnam, because United States is one of theVietnam's biggest import markets

Besides, prices continue to show an upward tendency, makes input price increase.Meanwhile, inputs of producing Vietnam's export fruits and vegetables have to import

a large quantity, effects to competitiveness on world market

In addition, countries are watchful over terrorist security, so countries' customs controlstrictly, it makes transit time last long That influences exporting Vietnam's fruit andvegetable

In company with developing world economy, Vietnamese economy gained obviousadvance Economy has many changes; industry structure is more reasonable,international trade increases Moreover, fruits and vegetables export companies appearincreasingly, and they accumulated experiences in international business,administration capacity and business skill improved much

Politics and laws can affect positive or negative to businesses in general and fruit andvegetables export enterprises in particular Although politic institution of each country

is different, in order to integrate into global economy, our party and state have policy todiversify economic relations, Vietnam want to be friend with all countries in the world

As a result, our diplomatic relations and external economic relations were expanded,

facilitating export Due to the effect of politic, legal element to business activities,enterprises that export any market has to learn carefully about that market's politicinstitution in order to behave suitably

Export is a commercial issue having international characteristic, thus, not only nationallaws of two countries that do business, but also international laws and rules affect it Infact, laws of countries are quite complete and close; meanwhile, our country is lack,asynchronous, unstable, and prolix in administrative formalities This is a bigdisadvantage for fruit and vegetables export industry Therefore, Vietnamese legalsystem needs to perfect to accord international laws and practices

1.3.2 Economic-commercial relations between Vietnam and other countries inthe world

After innovating and opening markets, Vietnam's external economic relations attainedenormous achievements Vietnam is a member of ASEAN that is potential area andhave strong economic development; besides, our country is also a member of APEC Inaddition, we intensify multilateral and bilateral cooperation with United States (such asVietnam- United State commercial agreement), and Canada Moreover, in early 2007,Vietnam is a firm member of WTO These external economic relations createconditions for Vietnam's fruit and vegetables export activities

However, Vietnamese fruit and vegetables industry has to face a lot of challenge inintegration ground For example, entering WTO, world's fruit and vegetables import-export markets are held closely, multinational supermarkets systems dominate almostall, so Vietnam's fruit and vegetables export inherently have many difficulties, facenew challenges at present

Besides, we cannot but mention commercial relation with China; this is a country that

is evaluated to have potentiality for Vietnam's fruit and vegetable export in the future.With ACFTA (ASEAN- China free trade area), China reserve MFN status similar toWTO's members for Vietnam This advantage together with geographic conditions is

basis to strengthen fruit and vegetables export into China, especially, provinces atSouthwest of China Furthermore, many researches showed Vietnam would enjoymany benefits from early harvest program, and with ACFTA, Vietnam have a lot ofadvantages in manufacturing cost, thanks to natural conditions such as land, climate,and cheap labor price.

1.3.3 Situation of countries’ fruits and vegetables export in the world

Nowadays, fruits, vegetables manufacturing, and processing enterprises areincreasingly in area and world, especially China, United States Therefore, Vietnamesefruit and vegetable products have to compete toughly with these markets' ones

Although China is potential country for exporting Vietnam's fruit and vegetables,however, it is leading in the world in exporting fruit and vegetable, and its products areassessed to have higher competitiveness than Vietnam's

Regarding to tropical fruits, Vietnam's manufacture is still spontaneous, tattery anddispersive, thus our yield is lower than Thailand and Philippine- two countriesexporting mainly these products

As a whole, productivity of types of Vietnamese vegetables is lower in comparisonwith mean level of area and world, fruits are more expensive than other tropicalcountries For this reason, Vietnamese fruits and vegetables nearly have ever achievedsuccess in competition due to bad product quality, high prime cost Typically, inexporting pineapple products, one of Vietnam's main force commodities, whileThailand's pineapple productivity gains 24.5 tons/ha, Vietnam's one gets 13 tons/ha,thus, Thailand's pineapple price is lower than Vietnam's, so their products competedrastically with us Or Thailand's durian price is three times lower than Vietnam's.Now, main force fruit and vegetable export countries such as United States, China, andThailand have agricultural developing strategy that direct toward exporting target, andwith strengths, investment in agricultural industry in general and fruit and vegetable in

particular, Vietnamese fruit and vegetables will be able to compete toughly with thesecountries' products in international market.

1.3.4 Needs for fruit and vegetables

In recent years, annual fruit and vegetables quantity increases, needs for some certainfruit and vegetables increase due to fluctuation of population and earnings in countries.Together with increasing customers' income, fruit and vegetables products bringinghigh utility for them will be chose to buy, and they will purchase a lot these types ifprices are reasonable At present, living standard increase, needs for products that havehigh quality and safety is enormous This element effects directly to fruit andvegetables business situation on markets Therefore, any fruit and vegetables exportenterprises must do market research to catch up demands on products, then, givedecision on manufacturing and selling at domestic or exporting

1.3.5 Customs on purchasing and trend to import fruit and vegetables

Custom and trend on using effect greatly on Vietnamese enterprises' fruit andvegetables exporting activities Vietnam's large fruit and vegetables export markets atpresent and in the future as well are United States, EU, Japan, Singapore, Russia, theseare markets concerning with health and safety Thus, green products will be used a lotthere, they are good products and not harmful for people They are produced following

to new technology process; only use organic fertilizer of if using chemical fertilizer orinsecticide, they are within permitted limit Vegetables must be clean, fresh, not havepestilent insects, not be bluish black, not be broken and scratched For fruits, peel has

to be tidy and shiny; especially, color, shape, weigh, size and ripeness have to be alike.Processed fruit and vegetables products have to be wrapped carefully, hygienic, andwritten enough information related to products, have users' guiding book

In addition, these markets' consumers like fruit and vegetables juice, which are pure, donot have any sugar and additives

In busy life and trend to live alone, processed and instant fruit and vegetables productsare purchased with big quantities because they bring customers conveniences.

Therefore, fruit and vegetables export enterprises cannot unfocused on trend in using inmarkets where the company intends to export, thenceforth, it must have suitableadjustments in business into these markets

1.3.6 Vietnam's potentiality in manufacturing and exporting fruits andvegetables

With many advantages in manufacturing fruit, vegetables and diversified commodities,Vietnam exported many types of fresh fruit and vegetables, and processed ones as wellinto over 50 countries all over the world Up to now, fruit and vegetables area reaches

to 1.4 million ha; yield gets more than 16 million tons

Vietnam's potentiality in manufacturing and exporting fruits and vegetables bases onfollowing strengths:

Vietnam has favorable conditions on lands, weather (tropical climate at the south, andsubtropical climate at the north) with many specific types of fruits and vegetables; andhas comparative advantage against countries in areas and world

A lot of fruits and vegetables produced following to modern technology line, andquality, model, design are improved better and better

Growth rate of fruit and vegetables is very fast, especially in key areas such as theSouth-Eastern Area, Cuulong River Delta and Central Highlands

These are advantages, which create a premise for Vietnam's fruit, and vegetablesexport However, weakness of Vietnamese businesses cannot be denied, for example,technology in growing, harvesting, preserving and processing fruit and vegetables isout of dated; lack of strategy in establishing main force commodities, sorts arewidespread; don't create guarantee in relation among industries, phases in fruit andvegetables industry; lack of knowledge in market demand Therefore, it is necessary tohave appropriate measures of enterprises, Government, and related departments in

order to overcome above obstacles, exploit potentiality in exporting fruit andvegetables of Vietnam, reach to 350 million USD in export value, increase by 16.7% in2008.

1.3.7 Barriers for export fruit and vegetables products

To protect domestic fruit and vegetables industry, prevent other countries' fruit andvegetable products from overflowing, import countries always use tools of taxes,quotas, and technical barriers However, free trade trend make countries have to rejectgradually tools of taxes, quotas, and gradually increase technical barriers Following issome technical barriers which fruit and vegetables import countries always apply:a) Standardizing product quality

Requirements on fruit and vegetables quality are standardized quality standardizationsystem ISO These quality standardizations are passport for export enterprises such asstandardization system ISO 9000-2000, ISO 9000-1994 Specifically, EU requiresintegrated product certification, namely applies ISO 9000-1994, and United Statesrequires to be had Green card HACCP, namely ISO 9000-2000

Besides, when fruit and vegetables products enter EU market, they have to meetcriteria on health and safety according to instructions of common product safety92/59/EC

b) Environment target

Nowadays, fruit and vegetable export enterprises have to meet not only qualitystandardization, but also requirement on environment protection when manufacturingproducts These standardize into directions in packing and discarded packing(96/62/EC), environment administration system ISO 14000, and further, confirmation

of environment standardization for products or ecological brand Fruit and vegetablesimport countries bring out tough regulations, laws on packing, and some countriesestablish website specialize in supplying information on environmental pollution,manufacturing condition of export fruit and vegetables enterprises and countries These

regulations actually exceed ability of fruit, vegetables manufacturing businesses indeveloping countries, for example, in Vietnam, ecological brand is too strange, andthere are not any companies, which have met Meanwhile, advertising campaign,information on websites continues to propagandize negative impact of products, which

do not have ecological brand That makes fruits and vegetables import countries'customers ready to ostracize these products

c) Criteria on social responsibility

This criteria originates form moral element of customers, requires products have to becertificated clearly what conditions they are produced, whether have discriminationbetween employees or not, whether use children labor or not And SA8000 is the mostpopular standard system

They are policies for labors in salaries, incomes, working safety Especially,customers in Canada, United States, and EU take interest in these terms whenpurchasing products that have origin from developing countries Thus, SA8000 isconsidered a solution to affirm products' moral value and a passport of Vietnamesegoods into enormous markets

CHAPTER 2 REAL SITUATION ON VEGETEXCO VIETNAM’S

FRUITS AND VEGETABLES EXPORT ACTIVITIES 2.1

Establishment and development of Vegetexco Vietnam

2.1.1 Establishing and developing process of Vegetexco Vietnam

Full name: Vietnam national fruit, vegetable and agricultural productcorporation

Trade name: VEGETEXCO VIETNAM

Head office: No.2 Pham Ngoc Thach Street, Dong Da Dist., Ha Noi

Chief Executive Officer: Nguyen Van Thanh

Member units, include:

5 subordinated companies, branches, representative offices

6 subsidiary companies

25 affiliated companies

The corporation’s main business activities include:

 Agriculture production, processing, import/export and local sales ofvegetables, fruit, agro-forestry commodities, seafood, foodstuff and drinks, essentialoils, assorted seeds of tropical vegetables, fruit, flowers; fertilizer and chemicalproducts, material and packaging for agro-production and food processing; machineryand equipments, spare-parts, vehicles, handicrafts, household goods,

  Research and transfer of technology, technical training in processing ofvegetables and fruit, agro-forestry products

 Providing consultant service for investment in agricultural processing sector

  Financial business and other business related to stock market

 Other business related to services such as logistics, port handling,warehouses, transportation and transport agent, real estate, industrial and civil building,hotel, and office renting

  Associating with local and foreign partners and investors for projects in linewith the corporation’s strategic development

2.1.2 Framework of organization and management apparatus of VegetexcoVietnam

Since January 2006, the corporation has officially operated following parent-subsidiarycorporation model This conversion means changing organization structure andmanagement apparatus as well as departments’ function and authority

Organization chart of Vegetexco Vietnam under a holding company structure:

MANAGEMENT BOARD BOARD OF AUDITORS

GENERAL DIRECTOR

DEPUTY GENERAL DIRECTORS

SUBORDINATED

COMPANIES

5 MANAGEMENT DEPARTMENTS

1 Personnel & Administrative Dept

2 Financial & Accounting Dept

3 Planning- General Dept

4 Investment Consultant- Trade Promotion Dept

5 Quality Control Dept

SUBSIDIARY COMPANIES AFFILIATED COMPANIES

2.2 Characteristics of manufacturing and trading, and their influence on VN's fruit and vegetables export activities

2.2.1 Commodity business

The company trades in a lot of commodities, each unit trades some suitable ones Thecompany’s commodities include fresh, dry-salt, canned, frozen fruit and vegetables,and condensed juice

The company’s products are agricultural so they have seasonableness, then thebusiness is affected by the characteristic For example, pineapple is a main product; itscrop is in January, May, July, October, November, and December Banana, lemon, starapple, papaya are from May to November; tomato, cucumber are from October toJanuary; or kohlrabi, cabbage are from August to March Thus, products, which thecompany trades, are different in other periods, depending on products’ crop

+ ASEAN: Singapore, Indonesia, Thailand, Malaysia, Philippine, Laos

+ Other countries: China, Japan, Korea, Taiwan, Hong Kong, India, Arab, Jordan,Pakistan, Syria, Sri Lanka

- America: United States, Canada, Mexico

- Australia: New Zealand

- Africa: Egypt, Sudan, Morocco, Senegal

The company’s export markets are plentiful and diversified Each market with distinctcharacteristics in consumer habits and has different regulations, this create bigchallenge in expanding and developing markets of the company

2.2.3 Competitors

Now there are a lot of enterprises trading in fruit and vegetables, so the competition isnaturally

Vegetexco’s competitors are both domestic and foreign companies

At present, there are over 300 companies trading in this field, among them are severalconsiderable ones such as Dong Nai food and agricultural products import- ExportCompany, Lam Dong food and agricultural products joint stock company, Thanh LongHoang Hau limited company, Truong Phat limited company, Hai Phong logistics andimport- export company, Bao Thanh trade and service limited company, Long Anagricultural, aquatic products and sea food processing limited company

Chinese, Thai, Malaysian, North African, South African, New Zealand, Chilean,Brazilian export companies are toughest competitors Quality and price are twoelements making Vietnamese companies weaker in competition Especially, Chineseenterprises will be biggest competitors in the future, because they have advantage inlabor, and technology in growing, cropping, preserving, processing higher thanVietnam, besides they have diversity of model and type, equality in specification 2.2.4 Capital

Situation on Vegetexco’s assets and source of capital

Value(millionvnd)

Structure(%)

Value(millionvnd)

Structure(%)

Value(millionvnd)

Structure(%)

or borrowing from banks

About nature of capital, liquid capital is more and more, its density is increasing That

is suitable with fact because of being import export company, when quantity oftransaction is more and more, ability in capital stagnant

In addition, large capital helps the company invest for modern equipment in order tomeet needs in quality of product to export

2.2.5 Human resources

Workforce is a key element for every enterprise Vegetexco is interested in labor ofboth producing and trading, because effect of export activities depends not only onexport staff but also producing workers, due to quality of their labor will decideproductivity and quality of export products

In period of 2005-2007, the company's labor amount increased steadily year after year,average increase was 120 persons per year And structure of labor changed positively,specifically:

Situation on Vegetexco's labor

Criterion

Amount(person)

Structure(%)

Amount(person)

Structure(%)

Amount(person)

- Following nature of labor: Direct labor increased year by year, average increase was

120 persons per year; indirect labor trended to reduce It's positive sign proving thatreducing the company's workforce in management staff (indirect labor) isimplementing well

- Industry: Structure of labor according to industry fluctuated steadily year after year,

at the same time it trended to increase labor in import- export business and decrease

labor in production and processing gradually by means of intensifying mechanization

in production

- Labor level: Trained labor occupied more and more, and untrained one reducedcorrelatively Specifically, labor being bachelor and over bachelor increased 53persons/ year on average; labor being apprentice increased rapidly, average increasewas 172 persons/ year, while untrained labor decreased 101 persons/ year on average 2.2.6 Raw materials

Fruit and vegetables are diverse and abundant; it takes a long time to product (earlywithin 2-3 months, long within 3-5 years and longer) Products are consumed, butalmost are sold at home and abroad Products can be eaten freshly, or processed to beconvenient for preserving in a long time and transporting far to consumer Thus, fromproducing raw material, processing to consuming is a closed process; it requiresscience, specification and complication

Characteristics of raw materials affect strongly to Vegetexco's export Thesecharacteristics lead to tough requirements in export activities, especially at preservationphase from harvest to production and export At the same time, concerned departmentshave to coordinate closely and harmoniously in order that products can be consumed orprocessed opportunely

2.2.7 Quality management system

Applying advanced quality management system will ensure quality of products to meetconsumers' demand, improve competitiveness of companies It is especially important

to export companies Awaking of this, Vegetexco applied quality management systemaccording to ISO 9001:2000 Scope of application of ISO 9001:200 showed on a belowdiagram:

Enterprise Customer

Designing

Producingproducts

Sellingproducts

Servicesafter sellingISO 9001

In addition, the company carries out HACCP and has policies on quality such as:

- Always listens to customers' opinion on products, prices, selling services, payment,and complaint

- Improving continuously in awareness and professional ability all over company onquality, food safety

2.3 Analyzing real situation on Vegetexco Vietnam's fruit and vegetables export activities

2.3.1 The tenor of fruit and vegetables export

As other fruit and vegetables exports companies, Vegetexco also carries out exportactivities following a process from researching markets, defining commodities, findingout partners, planning project on export, dealing, negotiating, and signing contracts,purchasing and creating inputs for export, implementing export contract, evaluatingexport activities In above process, implementing export contract is the mostcomplicated and vital, and it includes smaller parts, which Vegetexco has to carry outaccording to international customs and law

After mobilizing inputs for exporting, Vegetexco bases on sales contract to implementtesting on quantity and quality of goods, in order to adjust suitably for contract Next,preparing export documents, customs clearance, bringing products to a certaindestination The company often exports by sea (at Haiphong port) or air (at Noibaiairport), however, always export with FOB so has not to charter and selling insurance

for products And payment is by TT (for familiar and prestigious customers), butalmost is by letter of credit Export process can be described such as:

Signing contract → Applying for a permit for exporting → Checking L/C→Preparing goods→ Doing customs procedure → Checking goods → Delivering →Doing payment procedure → Solving dispute (if any)

2.3.2 Results of fruit and vegetables export

2.3.2.1 Turnover and export value

In 2007, in total sales turnover (92.8 m USD), fruit and vegetables export turnoveraccounted for 27% Thus, fruit and vegetables export played an important role in thecompany

Situation on Vegetexco's export value

Year

Value(USD)

Rate(%)

Value(USD)

Rate(%)

Value(USD)

Rate(%)