- Total investment: 900 million USD - Capacity 800,000 tons Ure/year; - Manufacture of high quality cloudy grain fertilizer with the most modern technologies from Denmark, Italy, Japan a
Trang 1MARKETING PLAN FOR CA MAU FERTILIZER AND EXPORT TO CAMBODIA 1
SUMMARY 1
1.1 INTRODUCTION: 1
PART 2 4
CAMBODIAN MARKET ANALYSIS 4
2.1 CAMBODIAN MARKET: 4
2.2 SWOT ANALYSIS 6
PART 3 7
SPECIFIC OBJECTIVES 7
3.1 OUR MISSION: Bring about a better life through great crops 7
3.2 GENERAL OBJECTIVE: By 2015 account for 70% market share in Cambodia and become a leading fertilizer manufacturer and distributor in Asia 7
PART 4 7
MARKETING STRATEGY TO PENETRATE INTO CAMBODIAN MARKET 7
4.1 PRODUCT STRATEGY 8
4.2 PRICE STRATEGY 9
Because 82% of Cambodians live in rural areas and 30% live in poverty (according to the National Bank of Cambodia), most Cambodian consumers are sensitive to price: 9
4.3 DISTRIBUTION STRATEGY: 10
4.4 PROMOTION STRATEGY: 11
4.5 IMPLEMENTATION 14
4 ESTIMATED BUDGET 15
PART 5: 15
REFERENCES 15 PART 1
SUMMARY
1.1 INTRODUCTION:
Name: PetroVietnam CaMau Fertilizer Limited Company
In English: PetroVietnam CaMau Fertilizer Limited Company
In abbriviation: PVCFC
Foundation process and development orientation
PetroVietnam CaMau Fertilizer Limited Company is a company directly under PetroVietnam (PVN) with 100% capital ownership, founded on 09/03/2011 to manage and run
Trang 2Ca Mau Fertilizer Factory in Ca Mau Gas – Electricity – Fertilizer Group Industrial Zone, Khanh An commune, U Minh district, Ca Mau province
Its main business industries are the manufacture of fertilizer and nitrogen compound including: manufacture, business, storage, transportation, distribution, export and import of fertilizer, gasoline chemicals
Model of Ca Mau Fertilizer Factory: Ca Mau Fertilizer Factory started to be built in
July, 2008 and completed in 02/2012, in order to fundamentally meet the demand of fertilizer for Section 13, Mekong River Delta
- Total investment: 900 million USD
- Capacity 800,000 tons Ure/year;
- Manufacture of high quality cloudy grain fertilizer with the most modern technologies from Denmark, Italy, Japan and assembly lines imported from developed countries of EU or G7
- Product quality meets the standards of Vietnam and International
Organizational structure: In 2011, PVCFC’s organizational structure included: Board of
Members, Board of Directors and 04 Professional Boards with 25 staffs who mainly are the ones of Project Management Board In 2012, the structure was changed as follows:
So do to chuc Cong ty: Company’s organizational structure
Hoi Dong thanh vien: Board of Members
Ban Kiem Soat: Control Board
Ban Giam Doc: Board of Directors
Pho gima doc ky thuat san xuat: Manufacture Technique Deputy Director
Pho giam doc thuong mai kinh doanh: Business and Commerce Deputy Director
Pho giam doc dau tux ay dung: Construction Investment Deputy Director
Pho giam doc noi chinh: Internal Affairs Deputy Director
Pho giam doc tai chinh: Finance Deputy Director
Ban VHSX: Board of Manufacture Operation
Ban KT: Board of Technique
Ban KD: Board of Business
Trang 3Ban TM-VT: Board of Commerce and Materials
Ban DTPT: Board of Investment Development
Ban QLDA: Board of Project Management
Ban VP: Board of Offices
Ban TCNS & DT: Board of Financial Budget & Investment
Ban TC & KT: Board of Finance & Economy
Ban KH & CL: Board of Plan & Strategy
1.2 INTRODUCTION TO EXPORTED PRODUCTS:
• Description of the export product: Granular urea product branded " Ca Mau
Fertilizer" This is the only granular urea product which Vietnam has produced so far Comparing to the pilled urea, it has superior advantages which are of larger size of 2-6
mm, higher hardness so that it will not be glued in blocks or be broken in little pieces, helping to increase soluble time and save about 5% of the fertilizer in one area unit and higher-quality protein
• Target market: The Cambodian market is selected because it has fairly similarities to
Vietnam in terms of both geography and bilateral relations Because fertilizer products have large weight which leads to quite high shipping costs, Ca Mau Fertilizer Company targets Cambodian market to reduce transportation costs, compared with other domestic areas where has already other rivals (Ninh Binh and Ha Bac Fertilizer in the Northern Vietnam, Cong Thanh Fertilizer in the Central Vietnam, Phu My Fertilizer in the Southeastern Vietnam and Ca Mau Fertilizer in the Southwestern Vietnam)
In addition, Cambodia is an agricultural country with 75% of the population employed
in agriculture However, Cambodia's farming methods are obsolete so that it has still a big market sharing for products such as fertilizer, plant protection and etc Currently, Cambodia is ranked only 108th in the world, accounting for 0.04% of total imports of fertilizers in the world These are favorable conditions for Urea products of our company which are able to penetrate into this potential market
• Competitive advantage: Ca Mau Fertilizer has competitive advantages compared the other
rivals in terms of the prices, sample packages and quality
• Brand positioning: The brand of Ca Mau Fertilizer is positioned by the slogan " A
Pearl Grain, Golden Crop" which confirms that the quality of Ca Mau fertilizer products will bring good harvests for the peasants)
Currency Unit: USD
6 Machine depreciation 5,000,000
Trang 47 Transportation 1,000,000 Average 20 USD/ton
II Total revenue 25,500,000 50 thousand tons, average 510 USD/ton
1 Discount (sales discount) 765,000 Discount 3%
PART 2 CAMBODIAN MARKET ANALYSIS
2.1 CAMBODIAN MARKET:
• Political Environment: Cambodia is a constitutional monarchy which has the political
pluralism Political parties: The ruling party is Cambodian People's Party ( CPP) led by
Mr Chea Sim, Human Rights Party (HRP) by Mr Kem Sokha and some other parties Under the provisions of the Constitution, Cambodia follows the policy of neutrality policy, not allying permanently and not invading or intervening in the internal affairs of other countries Cambodia became the 10th member of ASEAN (4/1999), the 148th official member of the WTO (10/2004)…
Economic Environment: Agriculture is the top priority in development policies to ensure
food security and promote other sectors, especially the supply of raw materials for the processing industry, increasing exports and creating jobs In quadrilateral strategy, the Government set out four main tasks for agriculture which are:
+ Increasing the productivity and diversity of agricultural products;
+ Demining and land reclamation;
+ Fisheries Development;
+ Forestry Sector Development
- The policy of the Government is to allow investors to use land, including land transfer, short-term and long-short-term lease (can be extended), in accordance with the provisions of the Land Code The investment priority areas identified by the Government include: irrigation, aquaculture, palm oil refining, food processing, rubber planting and processing, sugar, jute
- In order to encourage investment and create an environment of free and fair trade , in 3/2003, the Cambodian National Assembly passed the Law on Investment Law Amendment (issued in 8/1994) with some new regulations as follows:
+ Investors do not have to pay taxes for 3 years and are entitled to more 3 years depending on the activities or fields of the investment The taxpayer must only pay since the first profitable year but not exceeding the fourth year since the operation of their business
+ Cambodia's economy began to grow in the 1990s when the government implemented free-market economy Especially in recent years, the growth rate of GDP constantly is in two numbers, namely 6.2% in 2001, 8.6% in 2002, 10% in 2003, 10.3% in 2004, 13.3%
in 2005, 10.8% in 2006 and 10.1% in 2007 and 5.5% in 2010 These growths are due to the development of tourism, garment exports and agriculture, while the inflation rate in
2007 is 10.8% According to renowned economist newspaper ''The Economist” and the
Trang 5International Monetary Fund (IMF), Cambodia ranks among the top 10 countries with the most growth in the past decade In 2009, under the impact of the financial crisis and global economic downturn, Cambodia's GDP declined to 2.4% In particular, industrial production decreased to 13% due to the sharp decline in exports and the stalled construction industry when foreign capital don’t flow so much Service sector growth was only 1.5%, much lower than the increase of 8.42% in 2008 Revenue from tourism declined sharply due to the impact of the global financial crisis Meanwhile, the agricultural sector remained at 4%, equivalent to the previous years
(Source: http://www.economist.com/blogs/daily 01/daily_chart)
• Cultural Environment: Cambodians are relatively easy and loyalty to the product.
For food items, they tend to choose the foods that suit their tastes, while Vietnamese companies don’t pay much attention to this fact For other products, they are more interested in price due to the current standard of living is not high and even if they satisfy with the products, they will accept them In the past, the people in the northwestern Cambodia used the goods imported from Thailand, but since then the Vietnam goods fair in Battambang Province in 2009, they prefer Vietnamese ones more According to Vietnam's commercial counselor in Cambodia, it's time for Vietnamese goods to reach to the rural areas of Cambodia and if it can be done good in marketing while still maintains the good quality of the products, the northwestern province of Cambodia will be a potential market
• Competitive Environment:
+ Direct: The company has to compete with the products of urea from Thailand and China
In particular, Thailand urea now dominates the Cambodia market with over 90% of its sharing
Trang 6+ Indirect: Besides, companies have to compete with other brands of fertilizer which have had foothold in the Cambodian market Typically: Binh Dien Fertilizer Company signed the contract to supply 80,000 tons of NPK fertilizers to Cambodia in 2005, with the total value of $ 20 million Products of Binh Dien Fertilizer has now become familiar to farmers in 16 provinces of Cambodia Five-star fertilizer company has undertaken its project of establishing "Cambodian Five Star International Fertilizer Company" in 12/2009 with a total investment of $ 65 million In addition, it is subject to the competitiveness of firms in domestic and from neighboring countries such as Sayimex, Chai Heng Pich
• Legal environment: The legal system is still weak A number of laws relating to
economic activities have been issued but not yet implemented decrees In addition, the weakness of management, bureaucracy, and corruption is a major problem, leading to increase the costs of business in Cambodia A review of the Ministry of Commerce showed that enterprises had boldly set up their establishments in Cambodia to distribute goods directly, but also small in nature; a distribution network has not been set up They are mainly small and medium enterprises while the big commercial enterprises have not penetrate into this market yet due to the legal environment in Cambodia lacks transparency and has cumbersome procedures
• Administrative procedures are cumbersome, customs are not clear and the tax is too high In addition to the 7% of import duty and 10% of VAT, businesses must be borne to imported fee of customs department as 120 USD per time, customs declaration fee of 200USD/container - too high compared to the value of shipments only about 16000-18000 USD
2.2 SWOT ANALYSIS
STRENGTH
- There are sources of stable supply of raw
materials to ensure continuous plant operation;
- Input materials are endowed with low price,
leading to reduced production costs and
improved competitiveness;
- Products are of high quality and produced by
technologies of Denmark, Italy, Japan in
particular stages Because the new plant has
just built so that its lines and equipments are
still new;
- It receives the immense help from the
Vietnam Oil and Gas Corporation in terms of
capital, human resources and etc
- Granular urea product has many advantages
over other products on the market
WEAKNESS
- The brand are still strange to Cambodia market
- The diversity of products is not high;
- The new staff lacks experience
Trang 7- Both countries have many similarities in
climate and agricultural cultures so it is easy
for the products to infiltrate into this market;
- There is a long border line with many
terminals and roads Therefore, it facilitates
the exchange of goods between the two
countries;
- Bilateral economic and political relations are
good;
- Many Vietnamese businesses have invested
into Cambodia in the field of agriculture
Legal relations between two countries are
convenient, giving each other many
preferences
- Cambodia is an agricultural country Most
people are farmers so that this is an
opportunity for the company to grow in this
market;
- Method of production and cultivation of
Cambodia is backward, seldom uses fertilizer
so that market potential is still great
- Thailand fertilizer is of good quality but
penetrate into the market spontaneously while
china fertilizer is low quality This creates a
space in market for the Vietnamese fertilizer
THREATS
- Experiences in the Cambodian market are not much;
- Cambodia's infrastructure is weak, freight takes time;
- The purchasing power of the market is not high;
- Cumbersome customs procedures, loose regulatory framework;
- Must compete with many other competitors which have had their footholds in the Cambodian market
- The cost to bring products into the distribution system of Cambodia is very high; distributors prefer to be paid in consecutive style, like quick profits and less desire long-term investments
- It takes time for Cambodian to move from Phu My, Thailand or Chinese to Ca Mau Fertilizer
PART 3 SPECIFIC OBJECTIVES
3.1 OUR MISSION: Bring about a better life through great crops.
3.2 GENERAL OBJECTIVE: By 2015 account for 70% market share in Cambodia and become a leading fertilizer manufacturer and distributor in Asia
PART 4 MARKETING STRATEGY TO PENETRATE INTO CAMBODIAN
MARKET
Trang 84.1 PRODUCT STRATEGY
Cambodia has the characters of climate, soil and major agricultural products like Vietnam Additionally, PetroVietnam has previously exported its urea fertilizer into Cambodia in the trademark of Phy My fertilizer; therefore, the export of Ca Mau fertilizer shall contribute to expand the Group’s market share
To products:
- Input materials: Exploited from natural gas from Plot PM3-CAA and Cai Nuoc mine, Hoa Mai mine and 46.2 mine in the Southern west sea of Vietnam
- Capacity 800,000 tons/ year
- Meet the requirements of safety, health and environment
- Standards of Urea appearances tested by visual methods as stipulated by Cambodia
Quality standards:
Quality standards Unit Cambodian standards Announced standards
Appearance Cloudy, hard, free of impurities, visible and dissolvablein water.
Comparison between cloudy grain urea with competitors.
Standard PVCFC Thai Fertilizers; Chinese Fertilizers
Products
Exported to Cambodia is the cloudy grain urea that is better than clear grain urea
Advantages: in comparison with other competitors inland or abroad, PVCFC always has the advantage of high quality cloudy grain urea
Thai cloudy grain urea is equivalent to the quality but the package and sale policy of Chinese cloudy grain urea is worse
Price
Urea marked in Ca Mau fertilizer is reasonable in price and aims to cheap-price favor customers in Cambodia
Thai urea and Chinese urea are higher
in price
Package, mark, storage, transportation, use instruction and expiry date:
- Grains in pill shape with anti-moisture and convenient for storage and transportation
Trang 9- Package: made of general plastic, PP layer outside and PE layer inside or HDPE/LDPE, moisture keeping, no tear and broken in case of transportation, 50 kg for net weight to each product
Language on package: Vietnamese and English
Contents:
Nitrogen contents: 46.1% min
Biuret: 0.95 % max
Moisture: 0.3% max
Not use hook
Product of PetroVietnam CaMau Fertilizer Limited Company
Name and address of manufacture: Ca Mau Fertilizer Factory, Plot D Industrial Zone, Ward 1, Khanh An commune, U Minh district, Cam Mau province, Vietnam
Storage: maintain urea in dry, clean, avoid from rain and sun and not direct contact with moisture Not mixture with other fertilizers and chemicals
Transportation: road, waterway covered to avoid from rain and sun
Use: suitable to all kinds of plants and soils (detailed instructions enclosed)
Expiry date: for 3 years since the date of manufacture
4.2 PRICE STRATEGY
Because 82% of Cambodians live in rural areas and 30% live in poverty (according to the National Bank of Cambodia), most Cambodian consumers are sensitive to price:
- According to "A Study of the Cambodian market in 2009" done by Ho Chi Minh city Center for Promotion of Trade and Investment, currently two Cambodia's largest fertilizer
Trang 10suppliers are from Thailand and China In particular, Thailand fertilizers accounted for almost the entire market share in Cambodia (97.7% in 2007) Thailand fertilizer is of good quality but don’t take care of design and is simple in type Moreover, Thailand fertilizer penetrates into Cambodia naturally, not accompanied by synchronous extension programs
as done by an exporter of Vietnam Currently, granular urea prices of Thailand are at
515-520 USD / ton China is the second largest supplier of fertilizer behind Thailand in Cambodian market From mid-2008, the Chinese Ministry of Finance continued to increase export duties on fertilizers to meet the demand for fertilizers in agricultural production in domestic, making China's fertilizer prices increase the price of Chinese granular urea is 530 USD / ton => price competitiveness of Chinese goods fell
- Cloudy grain fertilizer has several advantages over pilled one Today, the world fertilizer price is rising rapidly and the Cambodian people seem to be sensitive to price, so the price difference between granular urea product of different brands, whether small but to make a difference in purchasing power
- Therefore, we decided to make price for the product as follows:
+ Export volume is estimated at 50,000 tons / year in the first year, and it may increase
in subsequent years
+ Product price ranges from $ 510 - 515/tan (with the exchange rate of VND/USD = 20,850), of which:
Production costs = production cost + shipping cost + taxes + profit + other expenses:
Shipping Costs:
Waterways:
From Ca Mau - An Giang => Phnom Penh Port: VND 200-300 thousand/ton
Discount: Discount rate for exclusive distributors ranges from 3-4%
4.3 DISTRIBUTION STRATEGY:
4.3.1 Mode of transportation: Cambodia is neighboring country of Vietnam Therefore, to
transport the products to Cambodia, we use two methods of transportation namely land way and waterway The comparison between such methods as follows:
Transportation
expense
Transportation expense by barge
is 200-300 thousand VND/ton in average
Transportation expense by car fro, 600-800 thousand VND/ton
Advantages - Great quantity - Lower expense Active for transportation timetable
Object
Standard