final report: INTRODUCTION ABOUT COMPANY AND PRODUCTS

I. INTRODUCTION ABOUT COMPANY AND PRODUCTS 1. COCO Company: COCO Company was established on 112015. Office: Nguyen Tat Thanh street, 4 dictrist, Ho Chi Minh City. Website: www.Cocovina.com.vn . 2. Product The company COCO specializes in manufacturing and exporting coconut oil was established.

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Họ và tên MSSV

1.Võ Thị Nhật Bình K134080939 2.Nguyễn Thị Thanh Kim Huệ K134080956 3.Nguyễn Thị Kiều Huy K134080958 4.Huỳnh Thiên Phú K134080990 5.Nguyễn Ngọc Đan Quỳnh K134080991

Giảng viên: Phạm Tố Mai

FINAL REPORT

Thành phố Hồ Chí Minh, ngày 24 tháng 4 năm 2015

I INTRODUCTION ABOUT COMPANY AND PRODUCTS

1 COCO Company:

COCO Company was established on 1/1/2015

Office: Nguyen Tat Thanh street, 4 dictrist, Ho Chi Minh City

Website: www.Cocovina.com.vn

2 Product

The company COCO specializes in manufacturing and exporting coconut oil was established

3 Reasons for choosing Korea.

Korea is known as land of beauty technology and care beauty - the best in Asia Comestic companies develop so strong and has a lot of famous brands in the world market Gradually, use of these products come from nature in beauty care is also being focused

 Geographic: South Korea is a country in temperate zone, it has the quite cold climate, so that Korea can’t plant coconut trees which develop in hot and humid conditions

 Economy: South Korea is quite potential market for the export of Vietnam In

2014, Vietnam exported large amount of goods to South Koreaa (7.11 billion US dollars of goods, almost are raw materials and textiles) and this number is growing This proves that there is a good economic relation, the Korean market is relatively easy for Vietnam goods

 Culture, Politics: The culture of Korea has much similarities with Vietnam The relationship of the two countries is developing, economic cooperation between the two countries is constantly increasing over the years, governments and enterprises Korea try to facilitate cooperation and development with enterprises of Vietnam, this is a good opportunity for Vietnam enterprises to cooperate with domestic enterprises to learn and share

 Technology: Korea is considered cosmetic powerhouse Beauty industry of Korea

is the top of the world with all kinds of natural products that are produced by modern technology, so the market of raw materials for cosmetics production is an opportunity, a great bait for Vietnam enterprises to take advantage

In 2014, this is the time development of the oil exporters The coconut oil import markets such as US, EU… South Korea which 5th of coconut oil imports to 60,000 tonnes - 2014

Coconut oil is a natural material with a lot of use Not only is a vegetable oil to feed, it also uses a very effective beauty That is now a matter of beauty is a human tendency Not only including 47,630 tonnes of crude palm oil, 38,136 tons

of oil and 1,165 tons of oil and RBD cochin, total exports reached US $ 116.398 million women but men have

Korean cosmetics market is very large However, most cosmetics are produced by the chemical So in the long run will not be good for the skin Thus coconut oil is a natural beauty products for skin looks great

The Korean beauty and health-care industry looks back on years of constant growth, both in terms of exports and imports, as well as total market size and diversification of available products and services

4 Advantages of coconut development in Viet Nam.

Advantages of natural condition: Coconut is suitable for the weather and land of our country, can be widely grown in the countryside, around the ponds, small irrigation canal It grow fast on sandy soil area, and it’s fond of wetland

Advantages of workforce, cost of production: Plant coconut has advantage of saving the time on take care of the grown, so the farmers still have free time to do others housework.Viet Nam has abundant labor resources, cheap labor cost Take advantage

of farmer’s free time and surplus labor in rural area

Advantages of level of supply: Coconut brings great value more 1000 utilities from copra and coconut juice In Viet Nam, coconut area is only 4,2% coconut area of Indonesia, 4,5% of Philippines, 40,5% of Sri Lanka However, average productivity has 9,863 trái/ha/năm, approximately 1,9 ton copra/ha, higher than average productivity of APCC (0,9 ton copra/ha), Indonesia (0,85 ton/ha), India (1,1 ton/ha)

Ben Tre province has the biggest coconut area in Viet Nam, accouting for 40% of the coconut area in Viet Nam, Ben Tre coconut has many kinds of good quality and high productivity such as: native coconut, Dau coconut, Xiem coconut, Dua coconut

II OVERVIEW OF KOREA MARKET

1 The economic – geographic environment

a) Natural conditions

Geography of Korea The rugged Central Mountains cover much of central and eastern South Korea They include the Sobaek Mountains and the southern half of the T'aebaek Mountains

The western and southern coasts of South Korea are dotted with some 3,000 islands, most of them unpopulated Natural Resources of Korea South Korea is relatively poor

in natural resources

Korea's climate is regarded as a continental climate from a temperate standpoint and a monsoonal climate from a precipitation standpoint The climate of Korea is characterized by four distinct seasons: spring, summer, fall, and winter The wet monsoon/summer season in the middle of the year, and a cold winter from November

to March Winters are cold and dry The summer months are muggy and hot The island of Jeju off the southern coast is the warmest and wettest place in the country Jeju is one of some islands which has coconut trees, however they are only planted for tourism purpose not for sell So that, Korea can’t produce coconut oil for their industrial purpose We won’t have rivals from Korea

b) The economic environment and infrastructure.

In 2014, this is the time development of the oil exporters The coconut oil import markets such as US, EU… South Korea which 5th of coconut oil imports to 60,000 tonnes - 2014

The Korean beauty and health-care industry looks back on years of constant growth, both in terms of exports and imports, as well as total market size and diversification of available products and services It is worth to take note that nowadays not just Korean women are spending high on such products but also men purchase cosmetics on their daily routine Experts estimate that Korea has become the largest market for men’s cosmetics on a global scale

According to data released by the Korean Statistics Office, an annual average increase

of more than 10% in total market value of the domestic cosmetics industry was recorded over the last five years Even during turbulent times after the global financial crisis, the industry showed its recession-resistance by growing approximately 11% Also in terms of total value of foreign cosmetic products imported to Korea, a steady growth was recorded In 2008, the total amount of imported items was equal to USD

860 million The number then increased by more than 30% to USD 1’239 million by the end of 2012 A further growth forecast, with an expected rise of CAGR 2-3% until

2015 is prospected due to the rising popularity of products based on natural, organic and herbal ingredients The domestic skincare market skyrocketed during the General skin care products take the lion’s share by over 50% of all sales in the Korean cosmetics market and can also be determined as the major market driver in the upcoming years The domestic skincare market skyrocketed during the period

2005-2011 by showing a growth rates of 58%, mainly driven by facial care products

Development: Cosmetic Industry

Korea

Unit: 1’000 USD

Date: November, 2013

Author: Swiss Business Hub Korea

Author’s address: Embassy of Switzerland

77 ongwol-gil, Jongro-Gu

2 The political-legal environment

Government regulations:

Korean Constitutional system focuses on mechanisms president is directly elected for a term of five years All decisions are made through the country's National Assembly, including policies related to international business activities

Taxes:

Korea has a flat 10 percent Value Added Tax on all imports and domestically manufactured goods A special excise tax of 10-20 percent is also levied on the import of certain luxury items and durable consumer goods Tariffs and taxes must be paid in Korean Won within 15 days after goods have cleared Customs

Formal trade barriers:

For companies exporting to the Republic of Korea, the following shipping documents are required to clear Korean Customs:

- Commercial Invoice: An original invoice and two copies must be presented with the

shipping documents and must include total value, unit value, quantity, marks, product description and shipping from/to information

- Certificate of Origin: Prior to implementation of the KORUS FTA, a Certificate of

Origin, in duplicate, was required for some products

Self-certification of origin by the producer or exporter is normally the basis for deciding that the good qualifies for preferential tariff rates

If the certification is in English, an official translation into Korean must be presented by the importer to Korean Customs A certification may be made for a single shipment or for

multiple shipments of identical goods, for up to twelve months The certification including at least the following information:

a) Name and contact information for the certifying person

b) The importer, The exporter, The producer of the good

c) Tariff classification and description of the good

d) Information demonstrating that the good originates from the United States

e) The producer’s written or electronic certification that the product meets KORUS FTA origin requirements

f) Date of the certification

g) In the case of a blanket certification, the cover is nescessary

Intellectual property rights and regulations:

Intellectual property laws exist in Korea

Viet Nam companies wishing to sell their products or services in Korea should first and foremost find out if they have to register their intellectual property rights (copyright, trademark or patents) in Korea The speediest means to enforce the right-holder’s claim is

to have their intellectual property recognized by the Korean authorities and government

 Recommend actions that might be necessary for an existing company or a new enterprise with regard to factors in the political and legal environment.

Trade Barrier

Improving quality of products in order to meet rigorous standard of Korea’s market Recruiting, training, hiring experts to analyst and negotiate about international business; legal, procedure consultant for company

Tariff: Pricing by adding Value Added Tax appropriately to evade from allegations of Korea’s government that says our company have sold tax, dumped tax

Intellectual property laws:

Designing package, trademark, brand,….must appropriate to Korea culture Then registering intellectual property in Korea about brand, package, before penetrating Korea’s market offically

3 The social- cultural environment

a) An overview of demographic trends that could influence global business activities

South Korea’s birthrate last year fell to the lowest level on record and South Koreans could face natural extinction by 2750

Just 8.6 babies per 1,000 South Koreans were born last year, the lowest level since the country began keeping records in 1970, the national statistics agency said

Age structure: 0-14 years: 14.1% (male 3,603,943/female 3,328,634) 15-24 years: 13.5% (male 3,515,271/female 3,113,257)

25-54 years: 47.3% (male 11,814,872/female 11,360,962)

55-64 years: 12.4% (male 3,012,051/female 3,081,480)

65 years and over: 12.7% (male 2,570,433/female 3,639,083) (2014 est.)

Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of August 23, 2014

Proportion of young people use more than cosmetic

b) A description of cultural factors, social institutions, and informal trade barriers that could affect global business activities.

South Korea is a country so focused on being beautiful To many, being beautiful on the same standard means that life will be easier and they will have a higher chance of getting a better job

In the field of cosmetics, Koreans can’t stop experiment with new ingredients and methods They create snail cream (creams made from snail gut) in 2011 Also, they make nail polish which is mixed with real flower petals And not only women who love beauty products, men in South Korea also attaches to the use of cosmetics Currently, South Korea is the world's largest market in cosmetics for men

Negotiations Business in Korea:

Korean partners often build general agreement then start discuss in detail the necessary issues They only accept the terms and conditions clearly Contracts are often long with details including terms and conditions of an ordinary partnership agreement as well as the force majeure clause However, the drafting and signing of the contract must comply with the procedures Koreans believe that the most effective of a partnership agreement depends on the commitment of the parties rather than what is stipulated in the contract Although the lawyer is only used and respected a little in Korea, the advice of expert legal before signing a contract is necessary However, you have to be careful when they go to the negotiating table, some Korean partners may consider this an act of mutual distrust partners may consider this an act of mutual distrust

c) Recommend actions for existing companies

Creative Cosmetics is one of the unique culture of Korea, especially for women, and enterprise socializing in the production cosmetics With products from coconut, Coconut company should introduce the simple method for processing many types of hair and skin care cosmetics naturally and conveniently at home

Besides, Korean firms are also very fastidious to cooperate, so to brand Coconut can stand on the market, Coconut should be noted: Koreans are very seriously

"individualism" therefore, building lasting and reliable personal relationships is very

important in the collaborative process

Mentioning benefits in the long-term regularly and your commitment to building collaborative relationships with partners

Before signing the contract with Korean businesses, enterprises Vietnam should be forcible and careful about the contract terms, especially the terms of payment Pay attention to food safety and quality of products which is should be tested and certified

safe by the authorities

When there is any problem or seeing your partners have some signs of non-cooperation, you should carry out the necessary procedures with the authorities in both of countries soon

III Business strategy

1 Production:

Ben Tre is more advantage of area, yield and technology than other provinces, so Ben Tre

is the first proposal for the supply materials of coconut oil export

The company will build a processing factory with full function from split coconut to packaging, especially near to the source material to saving cost Then, we’ll buy crude coconut from farmers, transport to factory to processing and packaging Manufactured under traditional process and must meet the requirements on food safety, aims to reach international GMP standard