IMPORTING BUSINESS AT BEN THANH TRADING SERVICE JOINT STOCK COMPANY

Ben Thanh Trading Service Joint Stock Company is one of the mediumsized companies which does business in Commercial Trading, Service Trading, and Financial Investment. After nearly a decade of establishment and development, the company has earn a high reputation in industrial and household equipment importation which accounts for more than 50% of their total revenue. With the expectation of approaching and having clear vision of the company’s business, I decided to choose the topic “IMPORTING BUSINESS AT BEN THANH TRADING SERVICE JOINT STOCK COMPANY” as my field study subject with the aim of finding out international payment procedure of those products and presenting solutions to better this procedure.

FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS

GRADUATION INTERNSHIP REPORT

Major: International Business Management

IMPORTING BUSINESS AT BEN THANH TRADING

& SERVICE JOINT STOCK COMPANY

Internee: Tran Thong Tu Student ID: 1201017440 Class: K51CLC2

Supervisor: MB Tran Quoc Trung

Ho Chi Minh City, November 2016

Internship Report Code: 311

SUPERVISOR’S REMARKS

Ho Chi Minh City, November 2016

INTERNSHIP ORGANIZATION’S REMARKS

Organization’s legal name:

Address:

Tax code:

Main business sectors:

We hereby confirm that Mr./Ms

has completed an internship at our organization from (DD/MM/YYYY) to………(DD/MM/YYYY) - For his/her attitude:

- For his/her perception of the organization’s activities:

- For the data illustrated in the report (Please confirm the accuracy of the data):

- Other remarks:

Signature

(Please write the full title, sign and seal)

SUPERVISOR’S REMARKS i

INTERNSHIP ORGANIZATION’S REMARKS ii

LIST OF ABBREVIATION v

LIST OF TABLE AND FIGURES vi

PREFACE 1

CHAPTER ONE: INTRODUCTION OF BEN THANH TRADING & SERVICE JOINT STOCK COMPANY 2

1.1 Brief history 2

1.1.1 Establishment history 2

1.1.2 Development Process 2

1.2 Functions, missions, and organizational structure and human resource 3

management 3

1.2.3 Organizational hierarchy chart 5

1.2.4 Functions of main departments 6

1.2.5 Human resource 8

1.3 Business situation 10

1.4 Importance of imports to the development of Ben Thanh TSC 12

1.5 Competitive advantage of Ben Thanh TSC compared to other companies of the same industry 13

1.6 Intern’s activities during internship period 14

CHAPTER TWO: IMPORTING BUSINESS AT BEN THANH TRADING & SERVICE JOINT STOCK COMPANY FROM 2013 TO 2015 15

2.1 Importing business at ben thanh trading & service joint stock company from 2013 to 2015 15

2.1.1 Import turnover 15

2.1.2 Import structure 16

2.1.3 Market structure 18

2.1.4 Mode of transport 20

2.1.5 Mode of payment 22

2.1.6 Process of Customs declaration 23

2.2 Comments 24

2.2.1 Strengths 24

2.2.2 Weaknesses 25

CHAPTER THREE: RECOMMENDATIONS TO IMPROVE IMPORTING BUSINESS AT BEN THANH TRADING & SERVICE JOINT STOCK

COMPANY 27

3.1 Prospect of importing business at Ben Thanh TSC 27

3.1.1 Opportunities 27

3.1.2 Challenges 28

3.2 Goals of Ben Thanh TSC for the next 5 years (2015 – 2020) 29

3.2.1 Overall goals 29

3.2.2 Long-term development strategies 29

3.2.3 Objectives related to the environment, and the society 30

3.3 Recommendations to improve importing activities at Ben Thanh TSC 31

3.1.1 Recommendations about enhancing a marketing campaign 31

3.1.2 Recommendations for promoting human resources 33

3.1.3 Recommendations on improving logistics activities 36

3.1.4 Other recommendations 37

CONCLUSION 38

REFERENCES i

APPENDIX ii

APPENDIX 1: IN-DEPTH INTERVIEW SCRIPT iii

APPENDIX 2: DETAILED PACKING LISTS ON IMPORT STRUCTURE OF BEN THANH TSC (2014 – 2016) viii

LIST OF ABBREVIATION

ABBREVIATION FULL WORDS IN LENGTH

Ben Thanh TSC Ben Thanh Trading & Service Joint Stock Company

LIST OF TABLE AND FIGURES

1 Figure 1.1: Organizational hierarchy chart of Ben Thanh TSC 6

2 Table 1.1: Statistics of employees by gender and qualification in

2013-2015

9

3 Table 1.2: Statistics of business outcome in 2013-2015 10

4 Table 1.3: Percentages of revenue from Imports and Commercial

Trading in 2013-2015

12

5 Table 1.4: Tasks, Implementations, and Achievements of the Author

from September to December, 2016

14

6 Table 2.1: Import turnover at Ben Thanh TSC in 2013-2015 15

7 Table 2.2: Percentages of main imports at Ben Thanh TSC in

Ben Thanh Trading & Service Joint Stock Company is one of the medium-sizedcompanies which does business in Commercial Trading, Service Trading, andFinancial Investment After nearly a decade of establishment and development, thecompany has earn a high reputation in industrial and household equipmentimportation which accounts for more than 50% of their total revenue With theexpectation of approaching and having clear vision of the company’s business, I

decided to choose the topic “IMPORTING BUSINESS AT BEN THANH TRADING & SERVICE JOINT STOCK COMPANY” as my field study subject

with the aim of finding out international payment procedure of those products andpresenting solutions to better this procedure

The structure of the research consists of 3 following sections:

Chapter One: Introduction of Ben Thanh Trading & Service Joint Stock Company Chapter Two: Importing activities at Ben Thanh Trading & Service Joint Stock

Company from 2013 to 2015

Chapter Three: Recommendations to improve importing activities at Ben Thanh

Trading & Service Joint Stock Company

Accomplishing this report, the writer would like to highly express my gratitude tothe Board of Director of Ben Thanh Trading & Service Joint Stock Company foralways being patient and helpful to guide me during my internship At the sametime, I would like to give special thanks to my supervisor, MB Tran Quoc Trung,for his dedicated and detailed guidance

Being aware of the importance of the thesis, the writer did work hard However, due

to time constraints and lack of experience, mistakes are unavoidable Therefore, thewriter hopes to receive your precious feedback for a better report

Sincerely thanks,Tran Thong Tu

CHAPTER ONE: INTRODUCTION OF BEN THANH TRADING & SERVICE JOINT STOCK COMPANY

1.1 Brief history

1.1.1 Establishment history

Ben Thanh Trading & Service Joint Stock Company has been established on April

21st, 2004 under Business Registration Certificate No 4103002274, so-called asBen Thanh General Trading Company formerly, a State-owned Enterprise belonged

to Ben Thanh Corporation

Name of Company in Vietnamese: CÔNG TY CỔ PHẦN THƯƠNG MẠI – DỊCH VỤ BẾN THÀNH

Name of Company in English: BEN THANH TRADING & SERVICE JOINT STOCK COMPANY

Name in abbreviation: BEN THANH TSC

In 1997, Ben Thanh General Trading Company became part of Ben Thanh GeneralCompany under People's Committee’s Decision No 7448 on December 26th, 1997.

On December 16th, 2003 the People's Committee of Hochiminh City enforced thedecision No.6425 has transformed Ben Thanh General Trading Company into BenThanh Trading & Service Joint Stock Company, which does businessindependently

On April 21st, 2004 Ben Thanh Trading & Service Joint Stock Company hasofficially gone into action under Business Registration Certificate No 4103002274issued by the Department of Planning and Investment of Hochiminh City on April

21st, 2004

In 2007, Ben Thanh Trading & Service Joint Stock Company was eligible for being

a public company and officially registered the State Security Commission ofVietnam in June 2007

On April 14th, 2010 Ben Thanh Trading & Service Joint Stock Company hasofficially listed on Hochiminh City Stock Exchanges for the first time

1.2 Functions, missions, and organizational structure and human resource management

1.2.1 Functions

Ben Thanh TSC performs a number of prime functions, as follows:

The first function is commercial and service trading The company sells the goodsand services in the national market in order to provide the customer with high –quality goods and services at the reasonable price The goods include:

- Textile fabric, garment products, leather and leatherette products, householdappliances products, souvenirs, cosmetics, toys, lacquer paintings, products madefrom rattans, bamboos and leaves, types of embroidering products

- Materials, finished-products metals and semi-finished products used inconstruction and manufacture, irons, steels, aluminums, paper pulps, papers

- Cool electrical products, household appliances and hand-held electricalinstruments, types of locks, mechanical devices and spare parts for Argo - industry -

fishery, fire protection and prevention devices, telecommunications and mechanicsequipments for manufacture.

And the services consist of:

- Restaurants and hotels trading

- Leasing and renting out offices, apartments, Jewelry Trading Centers

- Trading real estate, import and export services, brokerage services

The second function is investment Until now, the company has contributed itsinvestment capital into enterprises right at the beginning of establishment andparticipates directly or indirectly in management to ensure the profitability of itsinvestment capital Areas essentially invested by the company are finance, banking,commerce, services, tourism, hotels, trade centers, office buildings for lease,education, health, manufacture and so forth

The last function is importation So far, the company has imported severalcommodities, but focused on 3 major products including air conditioners, steel,household appliances The purpose of the company is providing products of high-reputation manufactors, satisfying the customers’ demand, and thereby, enabling thecompany to carry out the first function better

The second mission is building up and making process schemes related to tradingbusiness, importation, and the company’s activities Making market researchs bothnationally and internationally entails that all of the company’s business will be doneeffectively

The last mission is doing all legal duties to the State such as paying taxes in duecourse, complying laws and policies of the State, and ensuring necessary conditions

of saving materials, labour safety and hygiene, and environment protections

In addition, the company is responsible for improving conditions of workplace,labour arrangement, and taking care the living standard of their employees.

In short, with respect to three above-mentioned funtions, the company has toaccomplish three particular missions to develop in a sustainable way over time

1.2.3 Organizational hierarchy chart

Figure 1.1: Organizational hierarchy chart of Ben Thanh TSC

5

GENERAL ASSEMBLY

OF SHAREHOLDERS

THE BOARD OF SUPERVISORS

THE BOARD OF DIRECTORS

GENERAL DIRECTOR

DEPUTY GENERAL DIRECTOR

DEPUTY GENERAL

DIRECTOR

Development and Research Division

Financial Division

Business Division Personnel Administration Division

Administration

Department

Business Department

Personnel

-Organization

Department

ENTERPRISES CONTRIBUTED CAPITALS AFFILIATED

UNITS OF THE

(Source: Ben Thanh TSC, Annual Report 2013 – 2015, Hierarchy chart of

management)

1.2.4 Functions of main departments

 The General Assembly of Shareholders

The General Assembly of Shareholders is the most dominant department in BenThanh TSC, including all of the shareholders have rights to vote The GeneralAssembly of Shareholders is responsible for discussing and approving some annualfinancial reports, reports of the General Assembly of Shareholders and the board ofSupervisors on situations of business and management of the company; determiningseveral approaches of long-term development of the company; amending andsupplementing regulations of the company; and appointing and dismissing theBoard of Directors and the Board of supervisors under current regulations of thecompany and existing laws of the State

 The Board of Directors

Business operations and other activities of the company through the administrationand instructions of The Board of Directors The Board of Directors is the deparmentwhich stands up for full absolute rights to retain all of the rights on behalf of thecompany, except for the rights which are belongs to the General Assembly ofShareholders

 The Board of Supervisors

The Board of Supervisors is the department which the General Assembly ofShareholders votes for It is the division which is on behalf of shareholders tocontrol every business operations of the company, manage and run the company.The Board of Supervisors is comprised of 3 people which the General Assembly ofShareholders stands to elect The term of office of the Board of Supervisors is nomore than 5 years

 General Director

The General Director or the CEO is an executive who has overall responsible foroverseeing all administrative functions in business operations of the company,directly supervise and be the advisor for all divisions as well as departments aboutbusiness goals, strategies and financial issues of the company Also, the GeneralDirector answerable to the General Director for the performance of his/her duties Amajor part of the Gerneral Director involves leading and directing Deputy GeneralDirectors.

 Deputy General Director

The Deputy General Director is in charge of organizing and performing activities ofeach department on denominated functions and missions and carrying out othermissions under the arrangement of the General Director

 Personnel Administration Division

The Personnel Administration Division acts as an advisor for the General Director,assists the General Director in the management of human resource, labour – salary,and administration Taking charge of the Personnel Administration Division is theDirector of this Division, who is answerable to the General Director for theperformance of his/her Division

 Financial Division

The Financial Division acts as an counsellor for the General Director, assists theGeneral Director in the assessment of business performance, financial situation,accountancy, and the management of capital and assets Taking charge of theFinancial Division is the Director of this Division, who is answerable to the GeneralDirector for the performance of his/her Division The Chief Account of thecompany is in charge of organizing accountancy, entering in the accounts, makefinancial reports under the VAS and relevant regulations of the State

 Research and Development Division

The Research and Development Division acts as an advisor for the GeneralDirector, assists the General Director in market research, planning developmentstrategies of the company, stimulating investment and commercial trading,

managing and developing the information-technology of the company Takingcharge of the Research and Development Division is the Director of this Division,who is accountable to the General Director for the performance of his/her Division.

 Business Division

The Personnel Organization Department acts as an counsellor and demonstrator forthe General Director, assists the General Director in the business field Takingcharge of the Research and Development Division is the Director of this Division,who is accountable to the General Director for the performance of his/her Division

 Affiliated Units of the Company:

Affiliated Units of the Company hold a function of directly doing business insuggested plans and orientations of the Company They also play as advisors for theGeneral Director, assists the General Director in running business operations, in themanagement of capital, private supplies, products, assets in each unit of thecompany The Chief Executive (Director) of affilated units of the company is anexecutive who has overall responsible for overseeing all administrative functions inbusiness operations of each unit, and is accountable to the General Director for theperformance of his/her own unit

P e r c e n - t a g

A m o u nt

P e r c e n - t a g

A m o u nt

P e r c e n - t a g

(

%)

e

(

%)

e

(

%)

Gender

Male

Female

97223

30.3169.69

102223

31.3868.62

95212

30.9469.06

Qualification

Higher education

Lower education

44276

13.7586.25

50275

15.3884.62

54253

17.5982.41

 Total

320

100

325

100

307

100

(Source: Ben Thanh TSC, Annual Report 2013 – 2015, Human resource management)

Table 1.1 indicates that there was a considerable fluctuation in a number ofemployees and two dominant trends in the period of 3 recent years Specifically, thenumber of employees increased slightly by 1.56% from 320 people in 2013 to 325people in 2014 However, this figure decreased further by 4.06% in 2015 compared

to the year 2013 due to the fact that there was 18 employees reach the age ofretirement

By gender, there was a difference in the rate between men and women from 2013 to

2015 Female always remained a high level of less than 70% This was due to thefact that office work usually does not attract any attention of male The majority ofemployees was women, except for some positions suitable for men such asaccountants, salesmen, and so on

By qualification, lower education (2013 – 86.25%; 2015 – 82.41%) accounted for alarger part of the education of human resource in the period of 3 years, but the trend

of them is going down by 3.84% In contrast, the company saw the slightly growingtrend of employing higher education staff (undergraduates and postgraduates),which went up from 13.75% to 17.59% after 3 years

Besides the above-mentioned statistical analysis of data, there are two bigdrawbacks of labour force which require great concentration of the company

First, many employees expose severe limitations on professional skills in English.High workload requires employees to be excellent in not only professionalknowledge but also professional skills in English when dealing with foreignpartners, especially Chinese manufacturers Thus, every year the company recruitsmany employees, but hardly anyone of them are influent in English, especially formanagement positions Therefore, it is difficult for them to communicate someissues in sales contracts to Chinese suppliers Moreover, while expanding importingscale, the company requires a high level of demand of salesmen who are good atboth English and Chinese skills However, employing them is relatively difficultbecause most of salesmen in Vietnam master just English, and few of them have adeep understanding of Chinese

Second, it emerged that miscommunication that frequently occurs among division

as well as departments at the company Every year, the company increases imports

of high-value commodities, with billions of VNDs per consignment imported TheBusiness Department, which is in charge of making an order for the imports, has toarrange a schedule of importation monthly and order at least 4 months before thecompany deliver the goods to their customers Therefore, periodic reporting of theinventory and the next-month sales plan has to be detailed, up-to-date, and correct

up to 95% Otherwise, without merely a small amount of goods, for example 10kilograms of material, the company would remake an order and use an expressdelivery service in order to catch up the sales progress, because a one-month plan inwhich the amount of goods fails to meet sales expectations results in the collapse ofother-month plans When a mistake happens, it will be a headache problem foremployees among departments to fix all of the expected sales plan It will also causemany troubles and losses for the company, not only increasing the cost but alsoreverse the suggested plan

In summary, human resource of Ben Thanh TSC who went for the trend of highereducation and higher level of women enabled the company to become flexible,dynamic and met their business requirement However, the company should takefair treatment policies and appropriate educational programs so as either toencourage their employees to work more efficiently or prevent them fromunexpected incidents

Expe nse

Profi t after taxes

02

272,519

45,270

45 74 8

92

280,583

37,995

Percen tage

(%)

Differ ence

5,912

-2 0 1 5 – 2 0 1 4

Percen tage

(%)

101.40

(Source: Ben Thanh TSC, Annual Report 2013 – 2015, Business Activities of Ben

Thanh TSC)

Table 1.2 shows data on net revenue, expense, and profit before/after taxes in BenThanh TSC starting from 2013 to 2015 Generally speaking, Ben Thanh TSCwitnessed a fall in net revenue and profit and a rise in expense

With regard to the net revenue, the number decreased by 3,410 million VND from331,802 million VND in 2013 to 328,392 million VND in 2015 in spite of anincrease by 4,538 million VND from 323,845 million VND in 2014 to 328,392million VND in 2015 In a different pattern, there was a steady downward trend in

both profit before taxes and profit after taxes, with a drop of 11,474 million VNDand 7,275 million VND respectively in the studied period However, there was amoderate growth of 8,064 million VND in the expense between 2013 and 2015.

In the period of 2013 – 2014, the growth rate of net revenue and profit went up bynearly 2.5% and approximately 13% respectively for some reasons First, incommercial trading industry, because of the complication of East Sea situation, anumber of travelers reduced incredibly and thereby several services in servicetrading industry were negatively affected Second, in real estate service, somecustomers suggested to cut down renting costs and the office releasing on 186 – 188

Le Thanh Ton Street suspended in order to build a hotel there

In the period of 2014 – 2015, the growth rate of net revenue went up by nearly 1.5%because there was a rise in selling a wide range of import products such as steel,electrical appliances in commercial trading industry However, the figure of profitcontinued to go down by approximately 3.5% for some reasons First, in servicetrading industry, a number of visitors continued to fall and thereby, some of theirrelated activities such as eating, shopping are negatively affected from March toJune in 2015 Second, in financial investment industry, Ben Thanh TSC restructuredbanks and reform their business activities in Ben Thanh East Center Last, realestate releasing had difficulty due to the maintenance of gold trading stands on 186– 188 Le Thanh Ton Street from April to July in 2015

To sum up, Ben Thanh TSC saw a downward trend in both revenue and profit and

an upward trend in expense from the early 2013 to the lately 2015 It means they arewarning signals for the company’s business and they need to be improve in thefuture

1.4 Importance of imports to the development of Ben Thanh TSC

Table 1.3: Percentages of revenue from Imports and Commercial Trading

in 2013-2015 Revenue

(Unit: billion

VND)

V a l

P er ce

V a l

P er ce

V a l

P er ce

u e

n - ta ge

(

%)

u e

n - ta ge

(

%)

u e

n - ta ge

(

%)

Imports

93.1

28

09

95.77

29

57

110.92

33.78

Commercial

Trading

286.5

86

34

277.4

85

66

285.15

86.83

Total

331.8

100

323.8

100

328.4

100

(Source: Ben Thanh TSC, Annual Report 2013 – 2015, Business Activities of Ben Thanh TSC)

Table 1.3 represents the revenue and proportion of imports and commercial tradingindustry between 2013 and 2015 Generally speaking, imports has played animportant role in Sales Business Department in particular and in the development ofBen Thanh TSC in general

As can be seen, there was 2 primary trends in this table: an upward trend of importbusiness and a downward trend of commercial trading industry (as analyzed in 1.3);however, the growth of import business will be mainly discussed During thestudied period, the value of imports increased sharply by nearly 20%, while itsvalue remained almost the same at about one third of total value The main reason isthat Ben Thanh TSC has been in close cooperation with international manufacturersand dealed with a stable number of national customers The promotion ofimportation not only contributes significantly to total revenue of Ben Thanh TSC,but also facilitates Ben Thanh TSC penetrate into globalization, which is one ofimportant goals of Ben Thanh TSC.

However, to achieve their long-term goals, Ben Thanh TSC need to continuouslydiversify a wide range of imports, identify target markets, and search for potentialcustomers

1.5 Competitive advantage of Ben Thanh TSC compared to other companies

of the same industry

In every business field, Ben Thanh TSC has gradually attained their positioncompared to other enterprises of the same field in the same area

In commercial trading field, there are a great deal of large trade centers at BenThanh market and Dan Sinh market These are well-known markets of HochiminhCity; thus, revenue and profit from these trade centers rise stably over time, whichmakes it a individual advantage of Ben Thanh TSC

In real estate investment – service field, Ben Thanh TSC has managed to make use

of more than 30 business sites with total area of approximately 6,000 m2, which islocated in the center of Hochiminh City With these benefits, in the long term, BenThanh TSC has concentrated on building a chain of Ben-Thanh-TSC labelledskyscrapers to exploit their full potential Ben Thanh TSC finished the first building

in 2005 and the nineteenth in early 2015, most of which are situated at the heart ofHochiminh City In the next 5 years, Ben Thanh TSC planned to construct 6 service– commercial skyscrapers in District 3, which increase their total projects up to 25.This is an advantage that Ben Thanh TSC ensures their profit and spreads theirinvestments beyound the current network of business

In service trading field, Ben Thanh TSC has been facilitated to flourish considerably

in the present economic climate When metropolis-updating projects andtransportation infrastructure construction in Hochiminh City were put into use,several enterprises, especially Ben Thanh TSC, have been given a lot of goldenopportunities to develop real estate services in the strategy of city planning

Being a member of Ben Thanh General Company (Ben Thanh Group), Ben ThanhTSC has a sustainable history of establishment and development Not only that,with experienced human resource, which have a deep understanding of service –trading field, Ben Thanh TSC has also build up a lot of relationships with partners,customers, relevant agencies, and so on both nationally and internationally Hence,

it is an honor for Ben Thanh TSC to receive Certifications of the Minister and theLabour Order, Second class due to their excellent performance in their business

1.6 Intern’s activities during internship period

Duration of the internship: 3 months from September 1st, 2016 to December 1st,

2016, with 40 hours/week equitable to 5 days/week

Address of internship organization: Ben Thanh TSC, 2 – 4 Luu Van Lang Street,Ben Thanh Ward, District 1, Ho Chi Minh City

Listed in the Table 1.4 are tasks, how to them, and what the author/the intern has learned about the company during the internship:

Table 1.4: Tasks, Implementations, and Achievements of the Author

from September to December, 2016

TAKE PART IN

WEEKLY MEETINGS

Participate in a meeting onevery Friday, and prepare

Status: Completed (4meetings)

documents for the meeting.

See how the managerorganizes and keeps track

of all company works

CHAPTER TWO: IMPORTING BUSINESS AT BEN THANH TRADING & SERVICE JOINT STOCK COMPANY FROM 2013 TO 2015

2.1 Importing business at ben thanh trading & service joint stock company

from 2013 to 2015

2.1.1 Import turnover

As analyze in 1.4, the importance of importation is indisputable in businessoperation of Ben Thanh TSC Therefore, it is necessary for us to investigate anaspect of importation; that is import turnover to find out how import value increaseover the years, and why Vietnam has trade deficits

Table 2.1: Import turnover at Ben Thanh TSC in 2013-2015

Year Value (billion VND) Growth rate (%)

2013 (93.1 billion VND) It means that the import value grew mildly 2.87%between 2013 and 2014 It is due to the fact that Ben Thanh TSC had somenegotiation problem with some of familiar steel manufacturers and decided to cutdown on steel imports; not only that, electrical accessories were not in the list ofimports of Ben Thanh TSC until 2015 However, from 2014 to 2015, the importturnover went up by 15.15 billion VND with respect to 15.82% which is almostsixfold than the growth rate between 2013 and 2014 The reason behind this is BenThanh TSC has found new steel exporters and potential customers for solving steelimportation thanks to some Multilateral Agreements such as ASEAN EconomicCommunity (AEC), Trans-Pacific Partnership (TPP), and so on

In short, Ben Thanh TSC in 2014 – 2015 put on the better performance ofimportation than they did 2013 – 2015, which makes a big contribution to thecompany’s revenue and profit This positive signals indicates an ever-increasinggrowth rate of import turnover in the period of 2016.

Pe rc en - ta ge

(%

)

V a l u e

Pe rc en - ta ge

(%

)

V a l u e

Pe rc en - ta ge

(%)

Air

conditioners

23.8

25

6

28.9

30

2

30.6

27.6

Steel

50.3

54

34.6

36

1

56.1

50.6

Household

appliances

10.7

11

5

15.7

16

4

19.1

17.2

Others

8.3

8.9

16.6

17

3

5.1

4.6

0

5.8

0

10.9

2013 However, there was a slight increase from 2014 to 2015 The revenue was30.6 billion VND in 2015, increase 5.88% compared to the previous year

For steel – the largest percentage of imports, there was a rapid drop in their importsfrom 2013 to 2014; in particular, in 2013, the revenue of air conditioners was 50.3billion VND, while in 2014, the number was 34.6 billion VND, decrease 31.21%compared to 2013 However, there was a rocket from 2014 to 2015 The revenuewas 56.1 billion VND in 2015, increase 62.14% compared to the previous year.For household appliances, there was a steadily dramatic growth in their importsfrom 2013 to 2014; in particular, in 2013, the value of air conditioners was 10.7billion VND, while in 2014, the number was 15.7 billion VND, increase by 46.73%compared to 2013 Similarly, the revenue was 19.1 billion VND in 2015, increase21.66% compared to the previous year

For others, with the emergence of hand pallet trucks, the year 2014 experienced thesharp increase in the value, with 16.6 billion VND equitable to 17.3% The figuremore than trippled to 4.6% in 2015 and doubled to 8.9% in 2013 Although imports

of hand pallet trucks went up, raw material decreased in numbers on account of thecompany decided to cut down on imports of raw material In fact, the State alsolevied high tax, about 30% - 40%, on these kinds of import It means that the Statehas not supported this importation any more until now

Obviously, the revenue of imported goods have increased over the years, except forsteel Particularly, in 2014, the company suddenly cut down on imports from

Chinese steel manufacturers due to the price fluctuation of steel in China and importmore other commodities such as raw materials, hand tools, and so on However,steel gained back the 1st imported item in 2015 when its price became stable Airconditioners and household appliances, although had difficulty from the State due tothe high tax policy on these items, have steadily increased because of their highdemand in our country Lastly, other commodities, despite their unstable supply,accounted for a moderate percentage of total revenue from the importation of thecompany.

Besides the above-mentioned statistical analysis of data, there are severaladvantages and disadvantages of import structure which require great concentration

of the company

When it comes to advantages of the import structure, first, there are a wide range ofimported commodities with various patterns Those are air conditioners, steel (steelrollers), household appliances (aluminum pressure cooker, stainless steel pressurecooker, stainless steel cookware set, hand blender), and others (hand pallet trucks,raw materials) (Appendix) It is convenient and easy for customers, bothentrepreneurs and households, to select and purchase one kind of products in theirdemands

Second, the expected amounts of imported goods well match the real amounts ofgoods sold Besides the goods sold, the goods in ventory still exists but with smallvolume It is due to the fact that some of the imports are articles hard to get rid of.Taking hand pallet trucks as an example, these products require specialspecifications which few factories in Hochiminh City can meet Thus, depending ondemand of customers, this kind of product are imported once to twice in a year.Third, the price of the imported goods is quite stable in the studied period.However, it slight increased in the late 2015 due to the devaluation of China’scurrency Yuan It should be kept in mind that the company mostly trades with theChinese exporters at the exchange rate of USD/RMB, so if the yuan is more than 10percent overvalued against the U.S dollar, the price of Chinese suppliers is more 10percent expensive than the previous price they used to deal with the company

Speaking of the disadvantage of the business items structure of the company, inspite of a variety of patterns, it still reveals the inferiority to their rival companies inthe market Meanwhile, their rivals has launched a new, attractive range of products

so far Furthermore, the current exporters do not sells their products exclusive to thecompany; it means that like the company, there are many importers buys the sameproducts from one supplier Therefore, the company feels some concern for theirmarket shares in the future, and they should have this problem solved by promotingmarket research, and renewing marketing strategies

Pe rc en - ta ge

(%

)

V a l u e

Pe rc en - ta ge

(%

)

V a l u e

Pe rc en - ta ge

(%)

Asia

50.3

54

34.6

36

1

56.1

50.6

Europe

42.8

46

61.2

63

9

54.8

49.4

Total

93.1

100

95.8

100

110.9

100

(Source: Ben Thanh TSC, Annual Report 2013 – 2015, Business Activities of Ben

Thanh TSC)

Table 2.3 compare the proportions of European and Asian imports to Ben ThanhTSC in the 3 recent years 2013 – 2015 It is measured in percentages Overall, it can

be seen that the Asian imports remained at a higher rate throughout this time

At the beginning of the period, in 2013, imported goods from Europe accounted for42.8 per cent of total revenue, whereas those from Asian exceeded this, at just over7.5 per cent Over the next year, the levels became different, with Europeancommodities rising more 27.8 per cent than Asian commodities Asian importedcommodities were still higher overall, though it dropped moderately in 2014

To be more specific, the resource of raw materials and the supply of finished goodsare high – quality imported goods all over the world, including plastic beads (fromThailand, Singapore), hot rolled wire rods (from Europe), electrical householdappliances (from Japan, Thailand, Indonesia, Korea), hand tools (from Singapore,Japan, China), a wide range of cars Ben Thanh TSC has been searching for newcustomers in these markets so far In addition, Ben Thanh TSC has imported a greatdeal of products from Asian countries such as Japan, Thailand, China (making up50% of a number of orders), and so on

In terms of China, imports from this country are mainly machines, devices, gadgets,etc The reason why Ben Thanh TSC chose Chinese enterprises as their partnerswas that China is a dynamic market with many potential customers Besides, a widerange of Chinese products have more competitive prices than those from othermarkets Convenient geographical location and short time of transportationfacilitates Ben Thanh TSC to find a new resource of commodities with lowtransaction costs In addition, not only China, Vietnam still ran a big trade deficitwith Japan owing to their high-tech and economical machines

Partners of Ben Thanh TSC are carefully selected by brand, quality of goods,reputation over the years; thus, Ben Thanh TSC has receive stable supplies with lessprice fluctuations to meet customer demands Moreover, imported products arederived from orders of customers which have a long and sustainable relationshipwith Ben Thanh TSC, and they guaranteed to purchase the goods from Ben Thanh

TSC whenever there are variations in price, exchange rate, and so on Therefore,price variations of raw materials and finished goods does not exert a huge impact oncompany profit.

Besides the above-mentioned statistical analysis of data, there are some pros andcons of market structure which the company should pay special attention to

About pros of market structure, first of all, due to a long-lasting relationship, most

of the suppliers does not only put high price pressure on the company but also haveany specifications of where to sell or who can buy these products from thecompany Secondly, It is more convenient for both the company and the customer tomake transactions That is because when the imported goods are sold, the salescontract do not include the term of product guarantee, so the company do notconcern about this kind of cost as well as any issue resulting from product defects

At the same time, the customer can purchase the goods with affordable prices

In terms of cons of the current list of suppliers, it can be seen that the company isnot highly flexible about diversifying their suppliers It is the fact that the company

is so familiar with old suppliers that they can not changing this situation Secondly,

it is more costly for the company when they do not accept the term of productguarantee of the supplier on sales contracts

Pe rc en - ta ge

(%

)

V a l u e

Pe rc en - ta ge

(%

)

V a l u e

Pe rc en - ta ge

(%)

Sea

transport

49

52

65

48

50

55

59

53.67