Procedure and status of export activities in Vinhconship

NGHEAN Container Joint Stock Company Vinhconship...2 1.1.1... Currently, in Vietnam, there are many businesses operating in the field of export ing farm products including the NGHEAN Con

Chap 1: INTRODUCTION 2

1.1 NGHEAN Container Joint Stock Company (Vinhconship) 2

1.1.1 General information 2

1.1.2 Company’s structure 4

Figure 1.1: Company structure ( updated to January 2014) 4

1.1.3 Business line 5

1.1.4 Orientation plan 8

1.2 Hanoi Branch 9

1.2.1 Overview 9

1.2.2 Recent business situation (first six months of 2014) 9

Chap 2: EXPORT ACTUAL SITUATION OF AGRICULTURAL PRODUCTS AT HA NOI BRANCH ( 2010-2014) 11

2.1 Market and product structure 11

2.2 Exporting procedure 14

2.3 Advantages and disadvantages 16

2.3.1 Advantages 16

2.3.2 Disadvantages 17

2.4 Factors affecting export activities 18

2.4.1 Subjective factors 18

2.4.2 Objective factors 18

CONCLUSION 21

REFERENCE 22

NHẬT KÝ THỰC TẬP 23

In the process of globalization and economic integration as fast as today's world, import and export operations is an indispensable activity in each country, including Vietnam Besides some key export commodities such as: rice, coffee, crude oil, other agriculture products also play an important role in export in our country Along with the growth of exports, logistic appeared and made a breaktrhrough for transportation.

Currently, in Vietnam, there are many businesses operating in the field of export ing farm products including the NGHEAN Container Joint Stock Company - a business has many contribution

in enhancing exports position and market share in terms of these goods in Vietnam and created a reputation for Vietnam on world markets.

Recognizing the importance of exports of agriculture products

in Co.JSC and after a period of internship in operation service deparment, I came to decision that choosing the topic "Procedure and status of export activities in Vinhconship"for my reporting practice

On the ground that limited knowledge, there still contains some unavoidable mistakes, I hope you can review and comment

to report more completed.

I sincerely thank you!

Ha Noi, August 2014

Chap 1: INTRODUCTION 1.1 NGHEAN Container Joint Stock Company (Vinhconship)

1.1.1 General information

 Company’s name: Nghean Container Joint stock Company

 Trade name: Nghean Joint stock Company

 Abbreviation name: VINHCONSHIP

 Bank account: at Bank for Foreign Trade of Vietnam (Vietcombank)

 General Director: Mr Nguyen Duy Ky

 Deputy General Director: Mr Vo Tien Cong

Established in 1994 in Vinh city , Nghean Container Joint StockCompany (Vinhconship Nghe An) , with the field of transport operations byroad, sea, trading of agricultural and forestry production, import and export ,introduces itself as a leading manufacturer and exporter of forestry andagricultural products such as Gum rosin WW grade and X grade, Oleo pineresin, Gum Turpentine oil, Damar Batu resin, Cassia (Cinnamon), Staraniseeds, Black pepper, etc

Untill now, with 20-year experience in this field due to their highquality products, large warehouse system, trucks, tractors and a variety of

containers along with slogan:” Our first principle is the best quality for the most reasonable price.Vinhconship would like to do business with clients who are willing to co-

operate with foreign companies for investment and production.”, company

have been able to garner a huge number of clients all over the world Aiming

to provide the best personal service, the highest quality product andcompetitive pricing that allows our customers to maximize their profits,

company got not only customers’s sympathy but also long-lastingrelationships Their main export destinations are Korea, Pakistan,Philipinese ,India, Laos, China , Singapore and Europe and host of othercountries Company business plays an important role in export & transportsector of Viet Nam.

Chairman of the Board and General Manager

Deputy General Manager

Financial Accounting Department Transportation Business Department Project Management Board The Director of GUM factory

Import and Export Sales Department Operation Service Haiphong Representative The Director of Hanoi Branch

Financial Accounting Department Operation Service Sales Department

1.1.2 Company’s structure

Figure 1.1: Company structure ( updated to January 2014)

Source: http://vinhconship.com.vn/index.php?

option=com_content&view=article&id=147&Itemid=104&lang=en

1.1.3 Business line

VJC has a processing factory for Gum rosin WW & X Grade fromcrude Oleo pine resin with capacity of 15,000 tons per year and 5,000 tons ofGum turpentine oil with Alpha pine and Beta pine in 75% - 80%

Gum rosin and modified forms (salts and esters) are used in producingpapers, varnishes, paints, adhesives, and some soap Modified products withfumaric and maleic acids (or anhydrides) are utilised in manufacturing alkyds.Other usages including sizing for paper products, paint dryers, plasticizer inrubber, waterproofing, emulsified oils, dressings for machine belting, enamelsused in ceramic manufacture, roofing cement, sealing wax, linoleum, oilcloth, lutes ointments, plasters, veterinary medicines, disinfecting compounds,dry batteries and electrical insulation, production of fungicides, antiskidagents for floors and shoes, violin bows

to the standard glass color piece ofrosin

- Softening point: 76 Celsius

- Acid Number: 166 mg.KOH/g

- Ash Content Percent by mass: 0.02maximum

- Alcohol insoluble material: 0.03%maximum

- Unsaponifiable matter: 5%maximum

- Packing: The goods are packed innew galvanized iron sheet drum withNet

- Weight of 230 kilos per drum Grossweight 234 kilos per drum and 100

drums stuffing in a 20 feet container.

- Quantities: 20x20'FCL per month

Gum Turpentine Oil - Color index: Transparent white

- Alpha pinene: 60-70-80% minimum

- Beta: 3-8-13% minimum

- Specific gravity at 15 Celsius: 0.860– 0.871

- Acid value: 0.695 – 0.7095mgKOH/g

- Refracted value at 20 Celsius:1.4647

- Packed in galvanized iron drum ofabout 180 kilos net each and must bekept away from heat and flame

Dammar Batu Resin - Dammar Batu Resin grade 1:

+ White and yellow in color (the bestquality grade 1)

+ Full dry, no dust, big piece

+ Being packed in new pp bags andone thick plastic inside with 35kilosnet weight

- Dammar Batu Resin grade 2:

+ Full dry with white and yellow incolor and big piece

+ Being packed in new pp bags andone thick plastic bag inside

Maleic Resin Maleic Resin product is mainly used in

Paint industry, especially be applied in Polyuria than paint, Nitrocellulose paint, printing ink with the following applications:

- Improve shininess, hardness, paint thickness

- Anti-discolor

- Quick to dry

In terms of services, VJC also supplies transport services of im-exportcargoes with competent and experienced staffs, up-to-date equipment andtrucking lines for container

1.1.4 Orientation plan

VJC had been 3500m2 land from project 50 years that located on theaxis road National Highway 1A (first of the city Vinh) with the front 400m.Now it is completing a warehouse with a total area of 2.000m2 Companylooks forward to the working with other units you have business needs, landlease, warehouse of us Especially with the front of the advantages it looksforward to the enterprise business oto all kinds can cooperate with them in the

Transport services of im-export

of containerized cargoes  by sea and road

Transportation

of general cargo, over- long and over- heavy equipments

Business in store yard, purchasing and selling containers for rent with qualified and experienced staffs and modern equipments, trucking lines for container

display product sales In the near future, it want to broaden business network

to gain higher position in the international market

1.2 Hanoi Branch

1.2.1 Overview

NGHEAN CONTAINER JOINT STOCK COMPANY - HANOIBRACH is a unit formerly belonging to Vinhconship Group With activitiesroad transport, Marine transport, business of agricultural products, forestryproducts, Export and import With a large warehouse, truck, ContainerTractor các loại we are ready to meet all requirements of transport,warehouse

o Name of company: Nghean Container Joint stock Company – HanoiBranch

o Abbreviation name: Vinhconship Hanoi

o The number of business registration: 0113024586

1.2.2 Recent business situation (first six months of 2014)

Hanoi branch offers a variety ranges of logistic container, inlandtransportation, maintenance, repairs as well as leasing arrangement

As a pioneer in container transport with its own trucking fleet,company had a full scale system which uses specialized tractors and trailer.Trucking services are available to all areas of Viet Nam for any type of cargo,

no matter how large or small in scales Using of specially equipped vehiclesand being operated by special licensed drivers contributred to the company’ssolid reputation Quick, safe, effective and precise work is demanded forlinking the vital land and marine routes In addition, the company hascooperation contract with Vietnam Railway station and transports all kind ofcargo to destinations in Vietnam by rail

Table 1.1: The first quarter profit of Hanoi branch in 2014

Unit: USD

Ordinal

Source: Report for operation result of the first quarter in 2014 at Nghean

Container Joint stock Company – Hanoi Branch

In first quarter of 2014, company had a large number of sales contractswith partners from other countries such as Philippines, Laos, India, andKorea, especially from Singapore (mostly Micro Chemicals PTE Ltd andbeing represented by Mr Thomas Kee who is director of the company)

Consequently, Hanoi branch has gained a lot of profit In February, companyearned less profit because a large partner of company went bankrupt and wasnot able to refund the missing goods Therefore company had a deficit of thatamount and also lost a big client In March, company has found morepotential partners and has not only compensated for the amount lost inFebruary, but also gained huge profits.

Chap 2: EXPORT ACTUAL SITUATION OF AGRICULTURAL

PRODUCTS AT HA NOI BRANCH ( 2010-2014)

Export activity accounted for approximately 80% of total revenue ofcompany Besides, the company also exports goods by type of business, non-temporary import and export trade, but it accumulated for a small proportion

By reason of prior routines and simplifying the implementation ofcustom procedures, most of the foreign trade contracts signed by the companyare CIF or FOB delivery terms for export subject to agreement with thepurchasers

In terms of CIF term, the seller must the seller pays for the insurance ofthe goods under the contract of carriage

With regard toFOB term, the seller’s obligations includes loading thevessel and procures a bill of lading.This implies that the seller becomes theagent of the buyer in the contract of carriage.The seller is not responsible topay freight under the F O B contract

2.1 Market and product structure

 Export market structure in 2012 and 2013

Hanoi branch gives priority for exporting products to multinationalcompanies By cause of being multinational companies, the goods areexported in various countries but overall it is just one partner Therefore,

exporting goods to many different nations does not mean that the companyfound multiple partners in different areas.

The data from the table 2.1 shows that Singapore is the market wherethe products are mostly exported to It accounted for 78.27% in 2012 and87.1% in 2013 respectively This ratio tends to increase in recent times Itdemonstrates that the company's products have withstood in Singaporemarket, which is a growing market and has a developing economy It isfollowed by Laos, Philippines, India, etc

Table 2.1: Export market structure of Hanoi Branch in 2012 and 2013

 Export product structure

The categories of company’s goods are quite diverse (5 main items).Gum rosin had a leading value and accounted for a large proportion (from57.98% in 2012 to 59 % in 2013 It is followed by Maleic Resin The table 2.2shows that two items accounted for more or less than 25% share of exportseach year and the proportion is relatively stable This means that it is twostaple commodities of the company The company has identified key itemsand tried to make them stable despite economic crisis For the remainingproducts, Gum Oil is the most volatile one (from 4.03% drops to 2%)

Table 2.2: Export product structure of Hanoi Branch in 2012 and 2013

2.2 Exporting procedure

After having ordered and offered, negotiated necessary terms of theagreement and putting them in writing (written contract); company make theessential procedures for making delivery Normally, company delivers thegoods to the buyer by sea and it includes the following steps:

Step 1: Checking payment (The case of at sight L/C payment method)

Company presents the necessary documents to the paying bank (normally a confirming bank); the bank checks the documents If they are in order, the banks pay the full face value of the letter of credit

Step 2: Choosing the type of insurance for exporting goods

Marine insurance is usually used Today, most marine insurancepolicies include the Transit Clause which covers the goods from the exporter’swarehouse to the buyer’s warehouse – often with a long stretch overland ateach end of the journey

Company has an agreement with an insurance company (mostlyBaoviet Insurance Corporation) covering all its shipments over a period oftime Each individual shipment is covered by a Certificate of Insurance, not

by a full policy

Step3: Chartering the ship

In this step, to book room for loading cargoes, company contacts thecarrier and asks them for the train’s schedule (Estimated time of delivery andestimated time of arrival) After that, company emails the buyer to notice oftrain’s schedule Then, company negotiates for cost as well as freight andconfirms the issue with the partner and contemporaneously carries anegotiation about delivery terms

Step 4: Preparing for Vietnam customs procedures

Following customs procedures when exporting goods in Vietnam is one ofthe vital aspects of doing business in a country where manufacturing costs areleveraged to its favor Goods for export are subject to customs clearance thatchecks on the quality, specifications, quantity, and volume of goods

Companies exporting goods must submit a customs dossier to authoritiesthat includes the company’s business registration certificate and the certificate ofexport business code registration

The documents to be presented for exporting goods are: bill of lading,certificate of origin, commercial invoice, customs export declaration, packinglist and technical standard/health certificate

The Vietnam Customs web site says that companies regularly exportingthe same goods within a given period, if under the same purchase and salecontract, may use a single customs declaration for carrying out customsprocedures This is if the exportation of such goods is within the delivery timedetermined in the purchase contract