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Báo cáo thực tập môn tiếng anh thương mại INTERNSHIP REPORT THE SITUATION OF ASSIGNMENT OF TRANSACTING,NEGOTIATING AND SIGNING EXPORT PROCESSING CONTRACT OF ANDO INTERNATIONAL CO., LTD On the very outset of this report, I would like to extend my sincere heartfelt obligation towards all the personages who have helped me in this endeavor. Without their active guidance, help, cooperation encouragement, I would not have made headway in the report

MINISTRY OF INDUSTRY AND TRADE COLLEGE OF FOREIGN ECONOMIC RELATIONS

FACULTY OF INTERNATIONAL TRADE

INTERNSHIP REPORT THE SITUATION OF ASSIGNMENT OF TRANSACTING,NEGOTIATING AND SIGNING EXPORT PROCESSING CONTRACT OF ANDO

INTERNATIONAL CO., LTD

Instructor: Tran Thi Hong Hai Student’s name: Dao Thi Ly Ly Student’s code: 1110020

Course: 15

Ho Chi Minh City, May 2014

MINISTRY OF INDUSTRY AND TRADE COLLEGE OF FOREIGN ECONOMIC RELATIONS

FACULTY OF INTERNATIONAL TRADE

INTERNSHIP REPORT THE SITUATION OF ASSIGNMENT OF TRANSACTING,NEGOTIATING AND SIGNING EXPORT PROCESSING CONTRACT OF ANDO

INTERNATIONAL CO., LTD

Instructor: Tran Thi Hong Hai Student’s name: Dao Thi Ly Ly Student’s code: 1110020

Course: 15

Ho Chi Minh City, May 2014

ACKNOWLEDGEMENT

On the very outset of this report, I would like to extend my sincere & heartfelt

obligation towards all the personages who have helped me in this endeavor Without their active guidance, help, cooperation & encouragement, I would not have made headway in the report

Firstly, I am extremely thankful and pay my gratitude to my instructor- Ms Tran Thi Hong Hai for her enthusiastic guidance, helpful suggestions and comments in the writing

of this internship report Besides, I would like to thank all the teachers- International Trade Department of College of foreign economic relations, who have wholeheartedly taught me valuable knowledge and I have applied in this report

I also acknowledge with a deep sense of reverence, my gratitude towards Ms Doan Thi Xuan Huong and Mr Nguyen Duc Nhan, who offered me a great deal of instructions, explanations, assistance during my internship period at the company Furthermore, I express my deepest thanks to Ms Duong Thuy Tu- the Managing Director who gave me chance and opportunity to work in her organization in order to complete my internship report within 2 months until it has been done completely

At last, I would like to thank my parents, who have always supported me morally as well as economically

Any omission in this brief acknowledgement does not mean lack of gratitude

Ho Chi Minh City, 24th May 2014

Student’s name

COMPANY’S COMMENTS:

INSTRUCTOR’S COMMENTS:

enhancing business efficiency and gaining a steady position on the export market

In this internship report, I would like to present the topic “The situation of

assignment of transacting, negotiating and signing export processing contract of ANDO International Co., ltd” with the aim of understanding the company’s business

activities as well as finding out the advantages and disadvantages of these activities and giving some recommendations in order to help the company improve the situation of export processing activities

In chapter 1, introduction of overview of the company is presented Chapter 2

describes theoretical basis and the situation of assignment of transacting, negotiating and signing export processing contract of ANDO International Co., ltd Chapter 3 comes to general conclusion, gives some recommendations for the company as well as achieving experiences in internship process at the company

In order to write this report, I have used the documents provided by ANDO

International Co., Ltd and knowledge I have learnt for the past 3 years at the College of

Foreign Economic Relations

Due to the limited time, there must be a lot of mistakes in this report I would

welcome all comments from my instructor and the staff of ANDO International Co., Ltd

TABLE OF CONTENTS

ABBREVIATIONS

 HR: Human Resources

 CMPT: Cutting Making Packing Trimming

 FOB: Free on Board

LISTS OF TABLES, OUTLINES

Table 1.1 List of Machines

Table 1.2 ANDO turnover status over the years 2011-2013

Outline 1.1 The structure of organization of ANDO International Co., Ltd

Outline 2.1: The direct transaction process

Outline 2.2: The indirect transaction process

Outline 2.3: The procession transaction process of the company

Outline 2.4: The process of negotiating export processing contracts

Outline 2.5: The process of signing and implementing an export processing contract

THE SITUATION OF ASSIGNMENT OF TRANSACTING,NEGOTIATING AND

SIGNING EXPORT PROCESSING CONTRACT OF ANDO INTERNATIONAL

CO., LTD

Chapter 1: INTRODUCTION OF OVERVIEW OF THE COMPANY

1.1 Establishing history and development of the company:

1.1.1 Business Information:

• Company name: ANDO INTERNATIONAL COMPANY LIMITED

• Address: Head Office: 16 Ly Thai To St, Ward 2, Dist 3, HCM City

Factory 1: No 57/10, 1A National Highway, Tien Lan Hamlet, Ba Diem Commune, Hoc Mon District , HCM City

Factory 2: 1/101 Le Thi Ha St, Dinh Hamlet, Tan Xuan Town, Hoc

Mon District, HCM City

• Business activities: Garment - Fashions

• Market activities: England, USA, Germany, Europe, Asia

1.1.2 Establishing history and development of the company

- ANDO INTERNATIONAL CO., LTD was established in 2004 by Ms Duong Thuy Tu

Up to now, ANDO has two factories in Hoc Mon District, Ho Chi Minh City with the

total area of 10,000 square meters and about 1,000 workers Its production capacity can

• Investment amount: 1,500,000 USD

• Production: 9 lines, 44 machines / line

• Worker number: 600

• Capacity: 200,000 Pcs / Month

• Products: Woven wear ( Coat, Jacket, Pants , Dress , Blouse )

• Buyer: Walmart , Tesco, Penny (England); Cintas (USA); C&A (Germany)

• Compliance certification: Better Work

 Factory 2:

• Establishment: March 2011

• Area of factory building: 4,900 M2

• Investment amount: 1,000,000 USD

• Production: 6 lines, 26 machines/line

• Worker number: 350

• Capacity: 70,000 Pcs / Month

• Products: Woven wear (Coat, Jacket, Pants, Dress, Blouse)

• Buyer: Penny, New Look, Dunnes (England); Cintas (USA); C&A (Germany)

- To reach such considerable capacity, ANDO has constantly improved and upgraded the workmanship as well as invested on equipment, especially machinery Here is the list of machines:

Table 1.1 List of Machines:

1.2 Field of business of the company:

ANDO INTERNATIONAL CO., LTD is a manufacturer and exporter of various kinds of garment items: woven wear (especially ladies’ wear) There are various kinds of apparels: Jacket, Coat, Trousers, Shorts, Casual / cargo, pants & shorts, Blouse, Skirt, Dress and CMPT and FOB base

With the manpower and skillful workers, ANDO is being under development and

maintains good reputation with our traditional customers ANDO focuses on product quality and on-time delivery Especially, in the period of global economic crisis, it always learns from experience to improve our production management, upgrade the know-how and technical knowledge to increase productivity and set up our QA / QC, QMS to

observe the events and control product quality in concept of making customers satisfied ANDO sincerely serves domestic and overseas customers with competitive prices as well

to build up long term business relationship with our customers With the good and

experienced technical team, ANDO can make samples basing on customers’ designed

sketches and the actual samples ANDO also can design and make products following customers’ standards and demands

1.3 Framework of organization of the company:

TECHNICAL DEPARTMENT QUALITY MANAGEMENT DEPARTMENT

- Office is the place where the leaders manage all activities related to interrelationships as

well as contact customers directly or indirectly Also, it coordinates with other

departments to ensure activities at the agency Office is regarded as a general information center of the company

- Office has the following tasks:

 To advise the Board about organizational structure, personnel management,

manning labor, salaries and wages and disciplining labor, social insurance under the current regime, create incentives in labor, parts support functions of an

 To organize and control the recruitment, training, staffing arrangements

 To manage files and documents on the organization, employee salaries,

recruitment and training

 To manage wage labor and check units in the implementation of Resolution

decisions of the Board, the provisions of the Company for the employees

 To assist directly the General Manager in the settlement of the labor regime

- Office has seven main departments: The Board of Directors, Import- Export, Planning, Accounting, Administration & Human Resource, Technical and Quality Management Department Each department has different function and tasks

 The Board of Directors:

- Director is the highest leader in the company She is responsible for managing all

business activities, the public relations, programs and plans; and directly being in charge

of the Departments in the company

- Deputy Director is responsible for reporting to the Director about all the activities

related to the company She has the following tasks:

 To help the Director to find and establish relationships with customers and guide the executive duties

 To be responsible to the Director for the activities related to the import and export

of materials and goods; organize and carry out import and export business

activities as well as signing

 To help the Director to operate the productions, supervise departments and study the markets

 Import- Export Department: is responsible for communicating and guiding staff

on the issues related to import and export activities according to plans proposed by

the Board of Directors

Import- Export Department has the following tasks:

 To coordinate with other departments in the company for catching its

manufacturing capacity and thence make import and export plans in accordance with the Company's capacity

 To contact with foreign partners, learn about them to know the needs as well as ability to meet those needs and sign a business contract

 To make up a list of the relevant documents (invoices, bills of lading, declarations and so on) for the state agencies related to customs and trade

 Planning Department: is responsible for building up business plans based on the

terms under the processing contracts with foreign partners and ensure the

fulfilment off the plan as well as the progress of production

Planning Department has the following tasks:

 To build up the development plans, submit them to the Board of Directors to direct the implementation of the plans as well as to make a formal decision

 To separate and make specific plans for production groups, thence have a clear mission, not overlap the jobs between the groups

 Accounting Department: is responsible for managing all issues related to the

company's finance All revenues and expenditures of ANDO from paying salary to employees, purchasing production to obtaining money from the processing orders are captured and synthetized by Accounting Department From that, Accounting Department will submit them to the Board of Directors, the Board of Directors will have to adjust the strategies so that the company’s business activities are the most reasonable

Accounting Department has the task to set up financial reports, balance sheets, account balances honestly to submit to the Board of Directors as well as to the competent state agencies

 Administration & HR Department: is responsible for grasping the most specific

personnel situation in the company It advises the Board of Directors of the

organization of the departments in the company From that, there will be logical

recruitment decisions

 Technical Department: is responsible for managing the samples according to the

orders of foreign partners, thence analyzing the samples that partners require to process

 Quality Management Department: is responsible for supervising the production

of each stage, checking technical standards, products which whether meet the specification requirements or not If the products do not meet the specification requirements, Quality Management Department will quickly consider which unit the faults come from and have measures to repair them timely

- Factory area is the place where all CMPT (Cutting-Making-Packing-Thread)

processing activities are carried out It is divided into four main areas: Pattern

Department, Cutting Section, Sewing Line and Fabric Warehouse

 Pattern Department: is the place which receives the required samples from the

office These samples are produced according to the designs sent through the buyer’s emails This initiates the actual production Sampling process is

responsible for monitoring the quality at minimum cost

 Cutting section: is the place which receives the order for cutting a garment style

from the production manager The main objective of the cutting section is cutting

of garment parts accurately and economically and in sufficient value to keep the sewing room supplied with work

Cutting section has the following tasks:

 To maintain the quality of the cut components

 To cut the raw material in required shape and quality

 To have the cut components availability on time

 To keep control over the total consumption (grams) of fabric per garment piece cut

as well as determine the cost of the raw material

 Sewing line: the basic process of sewing involves fastening of fabrics, leather, furs

or similar other flexible materials with the help of needle and threads

Sewing line has the following tasks:

 To monitor machine operation to detect problems such as defective stitching, breaks in thread, or machine malfunctions

 To guide garments or garment parts under machine needles and presser feet to sew parts together

 To cut materials according to specifications, using blades, scissors, or electric knives

 To position material or articles in clamps, templates, or hoop frames prior to

automatic operation of machines

 To inspect garments, and examine repair tags and markings on garments to locate defects or damage, and mark errors as necessary

 To select supplies such as fasteners and thread, according to job requirements

 To attach buttons, hooks, zippers, fasteners, or other accessories to fabric, using feeding hoppers or clamp holders

 To mount attachments, such as needles, cutting blades, or pattern plates, and adjust machine guides according to specifications

 To repair or alter items by adding replacement parts or missing stitches

 Fabric warehouse: is the actual place where the fabric for production is receive or

dispatched for processing Beside storage, the fabric warehouse is also responsible for the inspection of the goods received by it

Fabric warehouse has the following tasks:

 To make plans and implement plans according to business requirements

 To implement the planned deployment of imports and exports

 To inventory the management of both quantity and quality

 To sort storage and control of cargo storage conditions

 To ensure order, safety and labor hygiene and fire at the workplace

1.4 Export business situation and performance of the company:

- In recent years, ANDO has faced with lots of arising difficulties such as the fierce competition about markets, prices as well as the competition between foreign and

domestic economic sectors However, the company’s export business situation has

obtained good results and ensured profitable business operation, preserved and developed business capital The business results of the company in recent years as follows:

Table 1.2 ANDO turnover status over the years 2011-2013

Unit: US Dollar

Source: Accounting Department

As we can see from the table, from 2011 to 2012, the turnover of the company increased slightly by 2,8 % while the profit increased 0,9 % At this period, European market

economy plunged into crisis, which led ANDO to temporarily lose potential customers in Europe One year later, ANDO started getting its customers and at the same time the unit price and the production capacity went up, the turnover rose by 16,8 % and the profit rose

by 5,5% compared with 2011

- In the beginning of 2014, the export business situation has strong changes To be more specific, see Appendix A The company turnover status from January to March 2014

- Since over 10 years of operating and developing, ANDO has stepped by step to

approach and expand market as well as create trust for customers on international market

- As the business production develops in a positive trend so the number of workforce rises from 600 workers in 2004 to over 1,000 workers by 2014 This shows the

company's production is stable and trends to expand Besides annual fixed workers, the company also outsources for processing Therefore, ANDO always ensures the quantity and quality of orders

1.5 Advantages and disadvantages in business activities:

1.5.1 Advantages:

- ANDO has established and developed for the last ten years and has the widely potential markets such as: England, USA, Germany, Europe and Asia This helps to ensure the output for the company's products and create the company's status on international market

- Besides, after Vietnam joined World Trade Organization, the national garment industry has developed considerably This creates a plenty of new development opportunities for the company to look for new markets, new customers as well as to affirm the company’s branch on international market

- Thanks to achieving Compliance Certification: Better Work, ANDO not only easily approaches new customers but also creates a proper belief in the company performance

- Thanks to political stability, cheaper labor costs than those of competing countries such

as China, Indonesia, India, ANDO can meet the diversity of the types of garment wear and implement social responsibility to ensure workers Furthermore, ANDO is to comply with the standards set out international customers as labor, production environment and social responsibility

- Dynamic staff always complete the tasks, functions and schedules They are innovative and easy to adapt to the changes in the working environment Furthermore, they work voluntarily with the spirit of self-discipline

1.5.2 Disadvantages:

- Because ANDO still operates according to CMPT production, it depends very much on materials supplier data (materials, quality, delivery time and so on) The prices of raw materials are also erratic so it is difficult for ANDO to evaluate the costs in process

Other raw materials have to be imported from foreign countries In addition, there are many factors affecting the work process such as machinery, work progress of other departments, labor deficiency, time, etc

- CMPT prices are very low so the profit of the company is not really impressive

- Young team does not have much intensive experience and they lack the handling skills,

so they are sometimes easy to make mistakes As a result, it takes ANDO time and costs

to do training courses

- There is an imbalance of labor employment structure between qualifications and profession

- Competition is cutthroat in global market

1.6 Objectives of the company in the future:

Here are the objectives which ANDO have been trying to attain in recent years as well as

in the future:

- To focus on FOB production, 100% export

- To save costs for source materials (sourcing domestic supply and quality) and reduce the level of use

- To deliver on-time and keep credibility with customers

- To seek actively to customers

Chapter 2: ASSIGNMENT OF TRANSACTING, NEGOTIATING AND SIGNING EXPORT PROCESSING CONTRACT OF THE COMPANY

- Transaction processing: step by step sequence of receiving an order, verifying the terms and methods of payment, and shipping or delivering the item

- Transaction in trade: an interaction between two or more parties in which goods,

services or something of value is exchanged for some type of remuneration Some aspects

of commercial transactions, such as truthful representation and contract provisions, are governed by law

Source: http://www.businessdictionary.com

2.1.1.2 Modes of transaction in international trade:

 Direct transaction: a transaction mode, in which the Seller and the Buyer transact

directly to each other through face to face or by means of media such as e-mails, letters, phones and so on to discuss and negotiate together about the provisions in commerce transaction such as kinds of goods, prices, payment terms and the other attached conditions

 Indirect transaction: a transaction mode, in which the Seller and the Buyer sign

and implement the contract through the third party (intermediary), namely the broker and agent

 Counter trade transaction: a transaction mode, in which the Exporter and

Importer have a close relationship with each other; the exchanged commodities are equivalent in value

 Re-export transaction: a form of exporting the commodities which were

imported and unprocessed in the export country The difference between export transaction and the counter trade transaction is that it is not interested in domestic consumption demand This transaction always consists of three

re-countries: export, import and re-export country so this mode is also known as third-party transaction mode or called Triangular transaction

 International Auction: a special transaction mode, in which at which the Sellers

take advantage of the competition of the Buyers to choose the highest bidder

Auctions usually take place at auction centers, the auctioneer will consider the goods, give the starting price, define the rules, call the investors and control the auction An auction may be conducted by their goods owners Auctions have two methods: Price Raising and Lower method

 International Tender: a special transaction mode, in which the Buyers (the

Owners) previously announce purchasing conditions for the Sellers (the

Tenderers) to quote they want to sell then the Buyers will choose the cheapest quotes and credit conditions adequate to the stated conditions This mode is

applied relatively popular in the procurement and construction of public works, especially in the developing countries

 International Procession: a transaction mode, in which the party placing a

processing orders will supply raw material, asset technical standards and the party receiving those orders will operate production then deliver products and receive the amount of money which is equivalent to the amount of wasting labor to

produce the products, called processing expenses

- Procession is an export- import activity associated with production Today procession is

a popular international transaction mode in many countries For the ordering party, this mode helps them to take advantages of cheap labor and raw materials of the procession receiving country For the processor, this mode helps them to solve employment

problems for local people and can get new equipment or technology for their country to help them to construct and develop national industry

 Transacting in Transaction Offices: a special transaction mode, in which

through the brokers assigned by transaction offices, the people buy the kinds of goods which have great weights, same nature and can be substituted for each other

- Transaction offices show the focus on the supply- demand relationship for an item in an area at a certain instance Therefore, the price released by transaction offices can be considered as a reference in determining the international price

 Transacting at Fairs and Exhibitions:

- The fair, is a periodic market activity, in which the Sellers display their goods and try to contact with the Buyers to sign a business contract

- The exhibition is to showcase the achievements of an economy or a sector of the

economy, culture, science, engineering and so on

- Trading at fairs and exhibitions is a good opportunity for the companies to advertise, strengthen their reputation and sign contracts However, the purpose of the fair is to sale

as well as look for contracts, the exhibition extends and advertises technical and

economic achievements as the main target

2.1.2 Negotiation