descripntion of importing process at Long Thanh company

INTERNATIONAL SCHOOL OF EDUCATIONINTERNSHIP REPORT TOPIC DESCRIPTION OF IMPORT ACTIVITIES AT LONG THANH INVESTMENT AND TRADE DEVELOPMENT CO., LTD... INTERNATIONAL SCHOOL OF EDUCATIONSTUD

INTERNATIONAL SCHOOL OF EDUCATION

INTERNSHIP REPORT

TOPIC DESCRIPTION OF IMPORT ACTIVITIES AT LONG THANH INVESTMENT AND TRADE DEVELOPMENT CO.,

LTD.

Supervisor: Nguyen Huu Hung

Student Name: Le Thu Trang

Student ID: 61897

HAI PHONG – 2018

INTERNATIONAL SCHOOL OF EDUCATION

STUDENT NAME: Le Thu Trang

CLASS: IBL0501

INTERNSHIP REPORT

TOPIC DESCRIPTION OF IMPORT ACTIVITIES AT LONG THANH INVESTMENT AND TRADE DEVELOPMENT CO.,

TABLE OF CONTENTS

LIST OF ABBREVIATIONS

ASEAN : Association of Southeast Asian Nations

L/C : Letter of Credit

ICC : International Chamber of Commerce

SWIFT : Society for Worldwide Interbank Financial TelecommunicationWTO : World Trade Organization

B/L : Bill of Lading

D/O : Delivery Order

C/O : Certificate of origin

LIST OF FIGURE

Figure 1.1: The organizational structure of Long Thanh Investment And Trade Development Co., Ltd

Figure 2.1 Bill of lading

Figure 2.2 Delivery order

Figure 2.3 Bonded warehouse customs declaration form

Figure 2.4 Bonded warehouse contract

LIST OF TABLES

Nowadays, international trade and globalization are becoming more and moreimportant As a result, the import and export activities are expanding and becamecompulsory activities to serve and promote the development of foreign trade.Foreign trade is an important source of foreign exchange for the economy Inparticular, for a developing country like Vietnam, foreign trade contributes toboosting the economy, improving the balance of payments, creating jobs andboosting the country

In a developing country like Vietnam, import and export business contributed toincreasing modern infrastructure and economic restructuring in the directionindustrialization and modernization At the same time, import-export business hasbeen improving the living standard of the citizens In recent years, the state hasallowed the businesses to import and export directly, thus leads to the competitionbetween different economic components in the domestic and foreign market.Especially since 1996, the cooperation between Vietnam and other countries in theworld has been strengthened and expanded The US removed the trade embargo toVietnam and Vietnam's accession to the ASEAN that have made the foreign-exchange industry becoming one of the most factors for the country's development.Therefore, the State always encourages and promotes import-export business.However, the export-import business must be more effective This is a goal that anybusiness, any country wants to achieve Therefore, improving the efficiency ofimport-export business is a significant issue Long Thanh Company Limited startedimport-export operation in 2010 The company encountered many difficulties in thefirst phase of import-export activities The company has been expanding its import-export business and constantly looking for ways to improve the efficiency of itsimport-export business until now Therefore, during the internship at Long ThanhInvestment and Trading Development company, I had an opportunity to research itsimport-export process

CHAPTER 1: INTRODUCTION OF LONG THANH

INVESTMENT AND TRADE DEVELOPMENT CO., LTD.

1.1 History, Vision and Mission

1.1.1History

• Legal name: Long Thanh Investment And Trade Development Company Limited

• Legal form: Limited Liability Company

• Headquarters: No 46Nguyen Binh Khiem Street, Ka Long Ward, Mong Cai City,Quang Ninh Province, VietNam

• Branch office: No 122 villa 02, 97 Bach Dang quarter, Ha Ly ward, Hong Bangdistrict, Hai Phong city

• Certificate of business registration number: 5701423002, issued by Quang NinhAuthority for Planning and Investment

• Tel: 0988682888/ 84.3.13507995

• Fax: 84 3.33773725

• Email: thanglongthanh74@gmail.com

Long Thanh Investment and Trade Development Co., Ltd established on August 17,

2010 The company was licensed by Mong Cai City Tax Department.The businesscapital is 10,200,000,000 VND and Fixed capital is 3,000,000,000 VND.Certificate

of registration of export-import code of enterprises was issued by Quang NinhCustoms Department- General Department of Customs dated 24/06/2011 In theprocess of operation from 2010 to now, the company has signed two additionalbusiness lines:

- The first time (17/08/2010):

+ Other specialized wholesale is not distributed

+ Wholesale food

+ Trading in rubber, scrap, metal and non-metal waste

+ Trading in solid, liquid and gas fuels, petrol and related facilities

- The 2nd time (11/12/2013):

+ Supplement to the industry

+ Trading electrical machinery, equipment, electrical materials and spare parts+ General business

1.1.2 Vision

The company will be linked with domestic and foreign economic sectors throughexport-import activities,thereby developing the exploitation of sources, materials,and goods to satisfy the needs of industrialization and modernization process

of rhythm , agreement Due to the management characteristics of the company, the

organizational structure of the company can be summarized as follows:

Figure 1.1: The organizational structure of Long Thanh Investment And Trade

Development Co., Ltd

- General Director: as a legal representative, responsible for expanding the

relationship, cooperation, joint ventures with domestic and foreign businesses tohave a stable source of goods, searching information about the sales contracts, andidentify competitors of company, so that we can draw out new business strategiesand also assist customers in understanding the necessary information

- Administration department: The main job responsibility of an administrator is to

ensure the efficient performance of all departments in an organization They solveissues that related to the organization such as labor, salary, social insurance, healthinsurance, administration of office and administration

- Accounting department: It is responsible for doing the accounting work,

promoting the efficiency of mobilizing capital, accounts payable, accountsreceivable and revenue tracking It also writes sales invoices, financial controls andmake reports and financial statements to estimates the amount of taxable incomethat the business is likely to generate, and periodically remits income tax payments

to the government

-Export-Import department: is responsible for contracting export and import,

organization for exporting goods and importing materials They manage data forinternational shipments and provide support for many steps of the transportationprocess They work with customs agents, warehouse staff, shipping companies, andclients They help with shipping, receiving, and record keeping for internationaltransactions

-Planning department: making quotation, quantities, categories, distribution

networks, negotiate transactions, sign trade and economic contracts with customers.This department is responsible for creating the list the items that the companyimported in order to distribute, develop and implement business strategies Theyalso develop marketing plans, receive inquiries that meet the requirements andresolve all complaints of customers in the field of import and export of goods

- Trading in solid, liquid, gas, petroleum and related products.

- Trading in machinery, equipment, and other spare parts

- General business

- Wholesale food

- Import and export of goods

As a development enterprise in the field of import, Long Thanh supplies a variety ofservices to transport several kinds of cargo such as bulky cargo, bulk cargo,overload cargo and special equipment from the point of original to the point ofcustomers at any volume

Services are provided by the company to customers: export-import procedures,freight forwarder, consolidation, insurance and packing options, warehousingservices, tracking of goods circulation, road transport

1.4 Resources

For nearly 10 years since its founding, the Board of Directors and all employees ofLong Thanh Investment and Development Co., Ltd have been continuously trying

to build up the company

For importers, diesel is the main raw material used for transportation in business Inrecent years, the price of petrol in the world fluctuates constantly and tends toincrease the price has had unfavorable impact on the import business of the marineindustry in general and the company in particular To minimize the impact of fuelprice fluctuations on total transport costs, the company has adopted economic andtechnical measures to save fuel costs, supply and use of fuel

In addition, the company has gradually implemented a strategy of diversifyingbusiness, separate business activities are linked together to form a closed servicechain to meet the increasing needs of customers To do that, the company hascontinuously invested, developed a new business areas in terms of infrastructure,machinery and people in each field

The company is fully equipped with information technology system Regarding thesoftware, the company has also step by step invested in enterprise management

software modules produced by domestic suppliers for specialized departments such

as accounting and accounting to improve efficiency in the company Corporategovernance

With the motto of always providing high quality service for customers, the companyconstantly improves and perfects the quality of transport service products whileseeking new business opportunities individual modes of transport into servicesupply chains, the company is and will expand

Along with the expansion investment and the development of production activities,the company quality management, marketing is one of the important steps, activelycontributing to the efficiency of production and business activities of the company.you The company always implement and maintain the quality policy, ensuring thefull requirements of customers, attract new customers, expand the market share ofpotential customers

1.5 Orientation and future plans

1.5.1 Orientation

- To develop into a maritime business enterprise with international qualification andcompetitiveness, to provide high-quality goods delivery services, meeting theincreasing demand of customers in while the import business is mainly

- To diversify types of maritime services, proceeding to build a model of importbusiness on a large scale

- Investment in development of means of transport

1.5.2 Future plans

a Maritime transport:

- Import and export goods: agricultural products, coal, fertilizer, plaster, iron andsteel

- Inland transportation: cement, coal, groceries, clinker

* Shipping routes: Southeast With over 80 per cent of global trade by volume andmore than 70 per cent of its value being carried on board ships and handled byseaports worldwide, the importance of maritime transport for trade and development

cannot be overemphasized Vietnam takes the advantages of geographic locationwith the long coast and many large seaports to develop waterway transports.

In addition, the domestic and foreign shipping market is favorable The demand forintra-regional trade in Asia is rising rapidly due to the strong development ofregional countries such as China and India

* The kinds of cargoes: Asia and Northeast Asia

b Shipping services

Shipping agency services focus on developing domestic and international containershipping services alongside traditional bulk carriers By 2020, the proportion ofcontainer revenue will approximate and exceed the turnover In addition, thecompany is planning to co-operate with domestic and foreign partners to developthe diversify types of business services, contributing to increase revenue sources forshipping service activities

CHAPTER 2: DESCRIPTION OF IMPORT ACTIVITIES AT

LONG THANH INVESTMENT AND TRADE

DEVELOPMENT CO., LTD.

2.1 Introduction about the company’s import activities

2.1.1 The definition of import business

The commercial is the process of buying and selling goods and services in themarket, the distribution and circulation of goods According to commercial law,commercial practices include the purchase of goods, the representation of traders,the brokerage of goods, the commission of the purchase and sale of goods, the saleand purchase agency, the commercial processing, the auction goods, goods bidding,goods inspection services, sales promotion, commercial advertisement, goodsdisplay and trade fair and exhibition Commercial operations can be divided intodifferent categories The scope of operation includes: domestic commercial business(domestic trade), international trade business (foreign trade), regional trade, citycommerce, agribusiness, internal trade

International trade is the exchange of goods and services between countries throughpurchase behavior The exchange is a form of social relationship and reflects theeconomic interdependence between the separate commodity producers of differentcountries in the world.

International trade business consists of two main areas namely import business andexport business In the import business, the purpose of importing goods may be fordomestic consumption, re-export to other countries, investment in the productdevelopment and imported products can be goods or services, intellectualproducts, invisible goods

2.1.2The kinds of the company’s import cargoes

The import business must follow the State regulation for import and export Inparticular, there are some kinds of goods that are encouraged to be imported,whereas some other goods are prohibited from importation or managed by taxpolicies, quotas, licenses, exchange rate management policies

Import cargoes of Long Thanh enterprise includes:

- Perishable goods: India buffalo meat, beef, seafood,…

- Special normal goods: tobacco, wine, beer, alcohol,…

- Dried normal goods: cosmetic, dried agricultural, …

- Solid, liquid, fossil fuels material and related products: coal, steel, iron,

The company’s mainly imported product are dried agricultural commodities such aspeanuts, legumes, dried mushrooms These kinds of product not only have thehigh demand in domestic market but also have high demand in China market Sothat the company often imports dried agricultural commodities in order to servicethe domestic and to re-export to China via Northern border ports such as Lao Cai,Mong Cai, Chi Ma, Ta Lung, Dong Dang, etc

2.1.2 The modes of import business

Total Revenue/ in

year (VNĐ) Type of import-export business model and the ratio (%)

Direct import Indent import Temporary

imported forre-export2013: 1.775.334 1.053.047 (59%) 645.972 (36%) 76.315 (5%)

2014: 885.485 1.872.536 (65%) 739.500 (28%) 219.449 (7%)2015: 2.947.156 1.759.542 (60%) 650.297 (22%) 537.317 (18%)2016: 3.241.871 2.009.960 (62%) 648.374 (20%) 583.537 (18%)

Table 2.1: Export-Import Forms and its ratio

(Source: The summary reports from 2013 to 2016 of Long Thanh company)From the above table, the direct import form still plays an important role in thecompany's business (increasing from 59% in 2013 to 62% in 2016 Meanwhile,indent export-import form reduced to 22% by 2015 and 20% by 2016 Temporaryimported for re-export is expected to increase from 2013 It is currently holding at18% of total imports during the two years of 2015 and 2016 This means that thecompany has increasingly considered the direct imports because of the oftenprofitable nature of this kind of import It also shows the business ability of theimport business

2.1.3Analysis the efficiency of import business at Long Thanh company

* The effectiveness of using capital

Table 2.2: Indicators showing the effectiveness of using the company's capital

(Source: The summary reports from 2014 to 2016 of Long Thanh company)According to the statistics, it can be seen that the number of working capitalturnover did not change over the years, which is due to the fact that the companyhas been competing with other enterprises over the past few years Turnover timefrom 2014 to 2016 respectively is 363.2563; 363,0351; 362,4474 days The mainreason is that the company did not use capital effectively, but the consumption ofgoods has increased