Group 3 Mid-term Report PDF

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FOREIGN TRADE UNIVERSITYSCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS------oOo------INTERNATIONAL COMMERCIALTRANSACTIONREPORT OF EXPORT BUSINESS PROCESS ANALYSISCASE OF VIETNAM’S SEAFOOD EXPORTATIONLecturer: Phan Thi Thu Hien Class: TMAE302. Group 3: Ta Quoc Chien – 1915550002 Tran Thao Linh – 1911...

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FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS ------oOo------

INTERNATIONAL COMMERCIAL TRANSACTION REPORT OF EXPORT BUSINESS PROCESS ANALYSIS CASE OF VIETNAM’S SEAFOOD EXPORTATION

Lecturer: Phan Thi Thu Hien Class: TMAE302.4 Group 3: Ta Quoc Chien – 1915550002 Tran Thao Linh – 1911150040 Le Phuong Thao – 1911150070 Pham Thu Phuong – 1915550021

Hanoi, September 2021

TABLE OF CONTENTS INTRODUCTION ......................................................................................................... 3 MAIN CONTENT ......................................................................................................... 4 1. Overview of seafood export in Viet Nam ............................................................... 4 1.1.

Production and export of Vietnam seafood in recent years ............................ 4

1.2.

Position of Vietnam in exporting markets and comparison with competitors .. 5

1.3.

Opportunities and challenges for Vietnam's seafood industry ........................ 5

1.3.1.

Opportunities ........................................................................................... 5

1.3.2.

Challenges ............................................................................................... 5

1.4.

Forecast on production and exports in the future ........................................... 6

2. Sales contract ....................................................................................................... 6 3. Seafood export process of the Vietnamese traders .............................................. 8 3.1.

Sales contract and payment guarantee .......................................................... 8

3.2.

Goods preparation.......................................................................................... 9

3.3.

Goods inspection ........................................................................................... 9

3.4.

Means of transport ......................................................................................... 9

3.5.

Goods insurance ............................................................................................ 9

3.6.

Customs procedures .................................................................................... 10

3.7.

Delivery organization .................................................................................... 10

3.8.

Complaints and settlement of complaints (in the event of dispute) ..............10

3.9.

Documents preparation, payment of goods.................................................. 10

4. Analyze seafood export process using BPA ....................................................... 11 4.1.

Process information......................................................................................11

4.2.

Systematization charts ................................................................................. 13

4.3.

Bottlenecks and redundancies identification ................................................ 15

4.4.

Improvement recommendation..................................................................... 15

5. Impacts of COVID 19 pandemic on the export performance of Vietnamese seafood businesses ................................................................................................................ 16 5.1. Impacts of COVID 19 pandemic on the export performance of Vietnamese seafood businesses in 2020:.................................................................................. 16 5.2. Impacts of COVID 19 pandemic on the export performance of Vietnamese seafood businesses in 2021:.................................................................................. 17 CONCLUSION .......................................................................................................... 18 References ................................................................................................................ 19

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INTRODUCTION

Along with the development and integration of the world economy, Vietnam's economy is also gradually integrating, opening up international economic exchanges and cooperation, creating many opportunities for trading cooperation with countries around the world. In which import and export activities play an increasingly important role. In import and export business, the drafting, agreement and performance of import and export contracts is one of the most important things, it decides whether it is possible to carry out the purchase and sale transaction or not. and what is the outcome of the transaction. Therefore, import and export contracts are a prerequisite and paramount for international transactions. So, what are the requirements and procedures for implementing an import-export contract at an enterprise? Therefore, the group went to research and find out the topic: "EXPORT BUSINESS

PROCESS

ANALYSIS

-

CASE

OF

VIETNAM'S

SEAFOOD

EXPORTATION" Due to the limited time to implement the topic as well as the limited ability, the discussion may have many limitations, hope you can ignore it and give us suggestions to help us complete our report! We sincerely thank you!

3

MAIN CONTENT 1.

Overview of seafood export in Viet Nam Since initiating an economic reform process in 1986, Vietnam has achieved

impressive economic growth. Vietnam has gone from a closed economy to an open economy with established trade relations with over 100 countries worldwide. Fishery is identified as a key economic sector of the country, ranked 5th in terms of export value (after electronics, apparel, crude oil, footwear). Over the past decade, this industry has emerged as a dynamic sector, making a strong contribution to exports and GDP. 1.1.

Production and export of Vietnam seafood in recent years According to the statistics of Vietnam Association of seafood exporters and

producers, the export turnover of seafood in Vietnam increased about 15%, reaching 22,6 million USD in the first half of 2021 while all commodity groups increased compared to the same period in 2020. Analysis Total export turnover

Compared to the same

(USD)

period of 2020 (%)

Shrimp

1,7 billion

13,7%

Tuna

364 million

24%

Pangasius

142,6 million

28,1%

Squid, octopus

277 million

15%

Bivalve mollusk

---

45%

Other fishes

847 million

13%

List of goods

Statistic table of Vietnam’s total export turnover in the first half of 2021 (Vietnam Plus, VASEP)

4

1.2.

Position of Vietnam in exporting markets and comparison with competitors Vietnam exports seafood to more than 160 markets around the world. In which,

the top 10 markets include: US, EU, Japan, China, Korea, ASEAN, Australia, UK, Canada, Russia, accounting for about 92-93% of Vietnam's total seafood exports. Notably, Vietnamese shrimp is ranked No.1 in many markets with outstanding turnover compared to other countries. In the past, Vietnamese shrimp were afraid of Chinese and Thai competitors, but now we can compete successfully with Thai shrimp on social and labor related issues, beating China in terms of quality, safety and hygiene. Thus, the main competitors of Vietnamese shrimp are from Indonesia and India. In general, exporting seafood from Vietnam to other key and potential markets is very positive. 1.3.

Opportunities and challenges for Vietnam's seafood industry Until the first quarter of 2020, the Covid-19 epidemic broke out strongly all over

the world. It is and will create new trends for the seafood supply chain, which can be considered as new opportunities and challenges for Vietnam's seafood industry. 1.3.1. Opportunities Vietnam's seafood industry has many advantages in terms of production. The developed processing technology can create many diverse products with high added value while more and more farming areas and processing plants have obtained sustainable certifications such as ASC, GLOBAL GAP, MSC, VietGAP… Vietnam can supply a large volume of safe and stable quality seafood thanks to the abundant supply with the potential of 28 coastal provinces, aquaculture land/water resources and a developed processing industry with more than 600 export enterprises. Vietnam's labor force is also quite abundant, skilled and stable. In addition, Vietnam has many FTAs with countries and territories that bring advantages in import and export taxes and opportunities to improve product quality. Along with the impressive recovery from two major markets, the US and the EU, Vietnamese exporters also make good use of opportunities to boost exports to potential markets through effective free trade agreements. This is a great opportunity for Vietnamese seafood. 1.3.2. Challenges Vietnam saw its seafood export value decline slightly last year as sales to its most important markets shrank during the COVID-19 pandemic. Although seafood export turnover increased, enterprises did not make much profit because the cost of 5

input materials increased faster than the average selling price. Along with that, logistics costs are still high. Since the outbreak of the Covid-19 epidemic, the global supply chain has been disrupted, demand has decreased and changed. The purchasing power from markets also tends to decline and recover cautiously which causes the increase of inventory. The situation of hanging ponds occurs on a large scale, making raw materials more scarce in the future and raw material prices will increase. Notably, major seafood imports markets all require strict quality control and traceability. Some markets strengthen control of frozen goods (packaging, food contact surfaces), the number of shipments being warned increases. 1.4.

Forecast on production and exports in the future By the end of 2021, it is forecast that the seafood trade will still be strongly

affected by the pandemic. However, Vietnam can still maintain its competitive advantage in raw material supply compared to other countries. In addition, Free Trade Agreements will continue to be a lever for Vietnam's seafood exports to recover in markets. After more than a year of struggling to maintain operations amid the epidemic, Vietnamese businesses will have more experience and flexibility to adapt to fluctuations and changing needs and tastes of the market. 2.

Sales contract Contract for the purchase and sale of seafood No.03CLTP/2001 Date: 8/9/2021

SELLER: MINH PHU SEAFOOD CORPORATION Industrial Zone Ward 8 Ca Mau City Vietnam Tel: (+84) 290-383-9391 Fax: (+84) 290-366-8795 BUYER: ACTA CO., Ltd 1-17-39 Tokiwa Kagoshima, Prefecture Japan Tel: (+81) 99 282 9179 Fax: (+81) 99 833 3232 6

It has been mutually agreed to the sale and purchase of rice on the terms and conditions as follows: A.

Commodity: Black Tiger Shrimp

B.

Specifications: 

Shell: off



Tail: on



Whole Head: off (HO)



Freezing treatment



Size (pcs/kg): 20-30



Glaze Percentage: 10%

C.

Quantity: 40 MT (more or less 5% at seller's option)

D.

Unit price: 15 USD/20-30 pcs/kg

E.

Total amount: 600,000 USD (more or less 5% at seller's option)

F.

Packing and marking: 

Sea-worthy Styrofoam shipping containers.



Marking: Number the boxes, product name, company name, sign the shipping codes according to the buyer's requirements.

G. Delivery: Within 15 days after L/C opening date 

Shipping port: Ho Chi Minh port.



Delivery port: Kobe port.

H. Payment: 

Payment shall be made by an irrevocable letter of credit, in USD with a letter of credit equal to 100% of the total commercial invoice value to the beneficiary seller. Letter of credit is opened at a reputable bank in Japan, notified through the Vietcombank Ca Mau. Letters of credit are opened at least 15 days prior to shipment date and are valid within 45 days of delivery.



The Letter of Credit is payable upon presentation of the following delivery documents by the beneficiary: o

Bill of exchange drawn against the issuing bank.

o

Full original set (2/2) of perfect sea waybill, stating “goods loaded”, as

ordered by the issuing bank, notifying the buyer. o

02 originals, 2 copies of signed commercial invoices.

o

02 originals, 2 copies of quality and quantity certificates issued by

Vinacontrol. 7

o

02 originals, 2 copies of the certificate of origin issued by the competent

authority in the exporting country. I. Force Majeure: 

The two parties are not responsible for the failure to perform contractual obligations in the event of force majeure. As soon as force majeure occurs are events beyond the control of the parties, unforeseen and unseen events including but not limited to: war, civil war, riots, strikes, natural disasters. disaster, storm, flood, earthquake, tsunami, fire, explosion, damaged factory, government intervention... the affected party will send a notice by fax to the other party within 3 days from the date of the incident. Evidence of force majeure will be issued by the competent authority and sent to the other party within 7 days. Past the above time, force majeure is not considered.

J. Other terms and conditions: 

Any amendment of the terms and conditions of this contract must be agreed to by both sides in writing.



This contract is made in 04 originals in the English language, two for each party.



This is subject to the Buyer's final confirmation by fax (17th September, 2021 latest). Made in Ca Mau, on 8th September, 2021

3.

For the Seller

For the Buyer

Director

CEO

(signed/sealed)

(signed)

Le Van Quang

Takayuki Nakano

Seafood export process of the Vietnamese traders Understanding the procedures and the order of what it takes to be able to export

an item is essential for Vietnamese seafood businesses to bring their products to the international market. 3.1.

Sales contract and payment guarantee The two parties carefully discussed and agreed on the terms and conditions of

the contract including: item name, quantity, quality, price, shipping and payment and other related terms. 8

Payment shall be made by an irrevocable letter of credit, in USD with a letter of credit equal to 100% of the total commercial invoice value to the beneficiary seller. Letters of credit are opened at least 15 days prior to shipment date and are valid within 45 days of delivery. 3.2.

Goods preparation In this step, the company must conduct procurement to create a source of export

goods, the main task here is to find the source of goods, select the ordering area, the gathering place, the means of purchase and sale. The basis of the collection of goods is carried out by economic contracts signed between the company and the production facilities. The most commonly used purchasing method is Ordering: Based on the model and model as prescribed in the contract signed with the domestic production facility, proceed to place the order so that the right item, quantity, and quality. 3.3.

Goods inspection Usually, the main content that the company checks is on quality, quantity,

packaging... to ensure compliance with the contract. Especially with exported seafood products to Japan, it is often necessary to have a certificate of origin and a certificate of food hygiene and safety (ethoxyquin inspection). The first time the inspection is at the purchasing facilities by the branch staff of the company specializing in quality inspection. The second inspection is the process of goods inspection according to the requirements specified in the export contract. 3.4.

Means of transport The first important step in the job of renting a transportation means is to learn

about the means to hire. The work of renting means of transport is carried out as follows: The company rents containers at the port, signs a contract to hire a trailer to pull the container from the port to the company's product processing workshop. After loading the goods onto the container, continue to carry the container to the company's forwarding branch. Then, the company will conduct the charter service. After determining the quantity of goods to be transported on the transport route, the company will conduct a research on the shipping route to sign a charter contract with the selected shipping company, then make a cargo manifest and circulate its cavity. 3.5.

Goods insurance: Buyer takes responsibility. 9

3.6.

Customs procedures Before carrying out the procedures to deliver the goods to the ship, the

company's employees carry out customs procedures including: Customs declaration and submission of goods documents: the company receives the customs declaration and makes a detailed declaration of the export shipment. After completing the customs dossier, the company will submit the declaration to the customs office along with the necessary documents to prove the legitimacy of the shipment. The company's export documents include: 

Customs declaration.



Sale contract.



The export declaration includes quantity and money.



Set of bank documents: invoice, sales declaration, quality certificate, certificate of origin, bill of lading of shipping lines.

3.7.

Delivery organization The delivery terms that companies often use when exporting seafood,

especially shrimp, are FOB. Therefore, the company conducts the following tasks: Delivery of goods on board the vessel at the specified port: company officials carry out export clearance procedures, inspect the goods and obtain quality certificates, then notify the customer. The company provides passengers with a set of documents: vice captain's receipt, sea waybill, certificate of origin… In addition, the company's delivery is also carried out by container: customs procedures, and loading into containers, transported to the port and chartered ships to transport to the port of import. 3.8.

Complaints and settlement of complaints (in the event of dispute) During the implementation of export contracts, companies cannot avoid errors

such as: slow delivery, insufficient quantity... When such a case occurs, the customer has petitioned or complained, the company needs to promptly resolve and adjust, mediate, negotiate, and settle, without any dispute. 3.9.

Documents preparation, payment of goods In terms of payment, exporting company will make a set of documents at the

request of the L/C to present to the bank opening the L/C, through the advising bank to claim money. The...