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FOREIGN TRADE UNIVERSITYTHE FACULTY OF INTERNATIONAL ECONOMICS INVESTMENT ECONOMICS PROJECTDiet food for people who do workoutsInstructor : PhD. Dinh Hoang MinhClass : KTEE311(1-1920).Group Number : 3Hanoi, September 2019TEAM MEMBER Nguyen Phuong Thanh No. Name Student ID Lai Hien Luong La Thi ...

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FOREIGN TRADE UNIVERSITY THE FACULTY OF INTERNATIONAL ECONOMICS 🙟🙟🙟🙟🙟

INVESTMENT ECONOMICS PROJECT Diet food for people who do workouts Instructor

: PhD. Dinh Hoang Minh

Class

: KTEE311(1-1920).1

Group Number

: 3

Hanoi, September 2019

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TEAM MEMBER No.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17.

Name

Nguyen Phuong Thanh Lai Hien Luong La Thi Phuong Uyen Nguyen Minh Ha Lo Nguyen Phuong Linh Nguyen Hong Hanh Nguyen Thi Thuy Tien Nguyen Phuong Mai Hoang Minh Quyen Luu Thi Hien Nguyen Phuong Thao Phan Quang Hung Nguyen Manh Hung Tran Hoang Lam Nguyen Luu Ly Nguyen Huu Hoang Hoang Nhat Chi

Student ID

1714450028 1714450040 1714450033 1714450042 1714450015 1714450044 1714450039 1714450020 1714450023 1714450041 1714450029 1614450025 1614450024 1614450027 1614450032 1614450023 1614450012

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TABLES OF CONTENTS PART I. INTRODUCTION

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I.1. About Us - Optimum Nutrition I.2. About TH Milk JSC

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I.3. About products to invest

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PART II. MARKET ANALYSIS

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II.1. Overview of host country

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1.1. Economy growth and prospects

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1.2. Population

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1.3. Political Stability II.2. SWOT Analysis of our company Optimum Nutrition

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II.3. Customer demand analysis

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2.1. Overall and customer demographics

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2.2. Health consciousness and dietary choice

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II.4. Competitors

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3.1. Current products

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3.2. Current suppliers

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3.3. Incompetence of competitors

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PART III. PRODUCT “DIET FOOD AND BEVERAGE”

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III.1. Business Model Canvas

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1.1. Customer Segment

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1.2. Value Propositions

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1.3. Channels

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1.4. Customer Relationship

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1.5. Revenue Stream

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1.6. Key Activities

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1.7. Key Resources

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1.8. Key Partners

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1.9. Cost Structure

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III.2. Demographic

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III.3. PRODUCT DETAILS

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3.1. Functions

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3.2. Packaging/ Appearance

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3.3. Added value

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3.4. Price

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PART IV. FINANCIALS

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IV.1. Strategy of setting price

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Gullon Maria Diet Cookie

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IV.2. Customer projection

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2.1. Targeted Customer Estimation

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2.2. Estimated Consumption of products

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2.3. Estimated revenue in 5 years

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2.4. Estimated investment cost

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IV.3. Cash flow and investment efficiency

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3.1. Cash Flow

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3.2. Net Present Value (NPV)

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3.3. Internal rate of Return (IRR)

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3.4. Profitability of Investment (PI)

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3.5. Discounted Payback period (DPP)

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PART V. SOCIAL BENEFITS

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V.1. Physical Health Benefits

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V.2. Mental Health and Social Health

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V.3. Environmental Benefits

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V.4. Employment benefits

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4.1. In the short term

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4.2. In the long term

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PART VI. References

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PART I.

INTRODUCTION

I.1. About Us - Optimum Nutrition

OPTIMUM NUTRITION was established in 1986 to satisfy consumer demand for consistent quality in sports nutrition. Our company is also known for anticipating ever-changing customer needs and meeting the demands of a dynamic market with innovative products. Vietnamese Distributors: -

Starlite International Group (SIG). TRUONG THINH TRADING DEVELOPMENT JOINT STOCK COMPANY

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Khong the Tin Noi LLC. BOCCI Vietnam.

I.2. About TH Milk JSC

Company name: TH Milk Joint Stock Company.

Address: No. 166 Nguyen Thai Hoc Street, Quang Trung District, Vinh. Hanoi City Branch: Floor 2, Dao Duy Anh Building, No. 9 Dao Duy Anh Street, Dong Da District, Hanoi. Ho Chi Minh City Branch: Floor 5, Central Plaza Building, No. 17 Le Duan Street, Ben Nghe District, Plant 1, HCMC. TH Milk is the first company in Vietnam to receive clean milk certification. In Vietnam, the company has Asia's leading-scale concentrated dairy farming system and is

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developing dairy farms in Northern border provinces (Ha Giang, Tuyen Quang, Lang Son, Thanh Hoa, …). 5 core principles of TH Milk JSC: 1. For true Happiness. 2. For community health. 3. 100% natural. 4. Environment-friendly. 5. Outstanding thinking and harmonious benefits. Successful projects by TH Milk JSC: 1. Clean TH Milk Road. 2. Herbal Road. 3. Healthy Beverage for Health Road. 4. Vegetables and Food for Health. 5. TH School Project. 6. TH Health Care Project.

I.3. About products to invest

Diet Cookies, High-protein Milk, Greek Yogurt for people who do workouts: Diet Cookies Dietary biscuits act as a fast food before and after workouts to restore muscle and provide nutrients to the body, burning fat. Protein and fiber-fortified bread thanks to its nutritious nuts. High-protein Milk

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High-Protein milk is an ideal food for the muscles of the exercise people who need a large amount of protein. Milk is easier to drink and use than supplement foods like whey powder or meats. Greek Yogurt Greek yogurt is rich in protein and vitamins, sugar-free but still has a delicious taste. It is especially recommended for exercise people rather than normal yogurts.

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PART II. II.1. 1.1.

MARKET ANALYSIS Overview of host country Economy growth and prospects

A mere 30 years ago, Vietnam remained one of the poorest countries in the world represented by the poverty rate of nearly 60% and a poorly – functioning centrally planned economy. Thanks to the shift toward a market economy steered by “Doi Moi”, a series of political and economic reforms, today Vietnam’s dynamic transformation become a phenomenal highlight among the emerging markets and continues to show exceptional growth rate in many years to come. Vietnam’s economy continues to show rocketing pickup in economic activity, backed by a cyclical rise in worldwide demand as well as a recovery in FDI and private sector investment and a continuous change from traditional agriculture to more productive and profitable manufacturing and service industries, demonstrating its attractiveness for future foreign investment. Vietnam’s growth is projected to grow to 6.8% in 2019 with GDP per capita is expected to rise by 5.8%. According to analysts from the World Bank and the think tank Brookings, Viet Nam’s economic rocket can be explained by three main factors: “First, it has embraced trade liberalization with gusto. Second, it has complemented external liberalization with domestic reforms through deregulation and lowering the cost of doing business. Finally, Viet Nam has invested heavily in human and physical capital, predominantly through public investments.”

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In the trend of globalization, Vietnam is in a strong position to benefit from economic integration and participation in international trade organizations accompanied by favorable trade agreements that are coming into force such as FTAs by ASEAN (1995), WTO (2007), CPTPP (2019) and various bilateral agreements with the U.S., Japan, South Korea, the EU (EVFTA), etc. These trade agreements dramatically reduced tariffs and opened much of the economy to foreign investment. Vietnam has been gradually progressing in enhancing its investment climate as shown by greater results in the World Economic Forum’s competitiveness index (up five places to 55 th in the world), and the 2018 World Bank’s ease of doing business ranking (69 th around the globe, up 31 points since 2014). More than 10,000 foreign companies – including major global players – operate in Vietnam these days, chiefly in export – oriented, labor – intensive manufacturing, indebted to government’s initiatives aiming to ease administrative bureaucracy, reduce corporate income tax and adopt a more pro – investor approach.

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Vietnam has adjusted its demographic and social change through effective investment in its citizens. Facing quickly growing population, Vietnam makes large public investments in primary education, health care service and spends every effort to ensure their quality. In terms of human capital index (HCI), Vietnam is ranked 48 out of 157 countries and territories, second in ASEAN and only behind Singapore. Infrastructure, especially power sector and connectivity, gains the most attention. With a rapidly expanding middle class and massive tariff reductions from free trade agreements, Vietnam is poised to experience significant growth in its health and wealthy industry. As a population that is increasingly health conscious, Vietnamese consumers rank health as their most important concern behind only their job and the economy. Therefore, consumption of low - fat dairy, for instance skim milk and lowfat varieties of yogurt and cottage cheese, is anticipated to increase as customers become more conscious of the need to remain healthy. In 2010, the average Vietnamese person consumed about 15 liters of milk/ year. It is forecast that by 2020, this figure will nearly double, to reach 28 liters of milk/ year/ person.

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Focusing on milk drinking behavior in Vietnam, in recent years, the demand for milk products has been increasing significantly. Vietnamese government initiatives designed to boost the average height of citizens by encouraging milk consumption have contributed significantly to the growth of the country's dairy products. Sales of dairy products, which includes white milk, flavored milk, powdered milk and non – dairy milk alternatives, increased from VND 8 trillion ($379 million) in 2008 to VND 55.6 trillion ($2.4 billion) in 2019. The market is expected to grow annually by 7.3% (CAGR 20192023), according to Statista.

Due to limited local production capacity, Vietnam’s industrial sector is still being built upon the import of raw material. However, in the latest years, local leaders in dairy industry including TH and Vinamilk have focused on creating raw materials with the establishment of a large dairy cow farm fitted with sophisticated technology implementation, steering clear of foreign dependence. According to the General Statistics Office's preliminary reports, in 2018, the total number of cows all over the country reached 294.4 thousand, increasing by approximately 160 thousand of cows compared to 2010 with an average growth rate of 10.9% per year. Characterized by its geography and tropical climate with an annual high level of temperature, Vietnam is capable of cow farming. Meadows in Ha Tay, Moc Chau, Ba Vi offer a variety of favorable conditions for

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growing, feeding and breeding herbs. As reported by the Department of Livestock Production, Ministry of Agriculture and Rural Development, there has been a sharp rise in the amount of dairy herds in the nation in recent years as big companies are increasing investment in manufacturing infrastructure to expand the scale of animal husbandry to guarantee the quality of raw milk sources aimed at providing customers with quality products and food safety and to make use of raw milk as the primary input of material to serve the National School Milk Program. Recognize the significance of raw milk fields, many companies have actively constructed on – site raw material regions with manufacturing connections with cow farmers to guarantee dairy manufacturing safety, generate employment, decrease reliance on imported milk and dairy goods. Many farms have received certificates from international organizations Farming scheme meets global requirements: G.A.P, VietGAHP ... Organic farms to guarantee that food meets clean, global quality standards for consumers. In addition, farm building has constructed businesses for dairy farmers connected with processing crops and milk collection. When the supply has met the domestic market, in order to increase the room for development, dairy enterprises have chosen to export abroad, despite different market approaches. According to statistics of the General Department of Customs, in the period of 2016 - 2018, Vietnam's export value of milk and dairy products continued to increase. Specifically, from USD 84.47 million in 2016 to USD 82.65 million in 2017 and USD 129.68 million in 2018. Accordingly, the average export value of the whole growth period is 27, 37%. In the first 3 months of 2019, the export value of milk reached US $ 48.6 million. In particular, the main markets are Iraq, Hong Kong (China), mainland China, Afghanistan, the Philippines and some other countries such as UAE, Laos, Myanmar, Japan ..., as recorded by the Financial Times. In addition to export, Vietnamese dairy enterprises also invest abroad, whereby Vinamilk invests in the dairy industry to the US, New Zealand, Cambodia, Poland, Laos and Myanmar continue to carry out trade promotion to to the EU. , Africa and South America; TH True Milk invested a project of 13

about 2.7 billion USD in Russia to produce and process milk ... Following the signing of the Vietnam-China Milk Export Protocol on 26 April 2019, eight companies have registered to export milk to China so far: Vinamilk, TH True Milk, Nestlé Vietnam, Nutifood, Ba For Milk, Enovi and Friesland Campina Vietnam… Although it is undeniable that Vietnam dairy enterprises are put under a lot of pressure due to heavy dependence on foreign markets, demanding requirements of investment capital and technique, they are working hard on innovations to meet the market’s demands with substantial initiatives. Enterprises in the industry have been constantly investing, constructing, enhancing, innovating techniques and technologies that have been implemented in factories over the previous few years. There have been and will be a number of big dairy producers and processors investing strongly in machinery, applying high-level automation technology at national and global level to enhance productivity, quality, food security, product diversification, maximize efficiency, competitiveness, and deepen the value chain of milk and dairy products on national and international markets. 1.2.

Population

The population of Vietnam is 92.7 million people and is estimated that 60% of it is under 35 years old (by Nielsen), which currently possesses young population structure. Table: Vietnam age structure

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Source: CIA World Factbook The combination of young population structure with the stable growth rate of GDP as mentioned above plays an important role in promoting the consumption of milk. To be more specific, the table shows that the proportion of young adults from 20 to 39 years old is the highest among age groups, which means that it is potential to invest into Vietnam as Vietnam is in developing period with cornucopia of young labor as well as we could see a potential market of milk industry. Furthermore, the fast growing of Vietnamese economy brings benefit to citizens. By 2020, Vietnam’s annual income per capita is projected to reach 180 million (US$8568). This leads to not only increase in consumer spending, but also in consumer behavior and preference – including a priority for branded goods and foreign products. Additionally, in the specific case of milk industry, the higher GDP per capita, the more Vietnamese care about their health, especially the young adults concern

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about their appearance, which implies the bright future of product for healthy and diet meal, which would be mentioned as our products. The consumption level of milk of Vietnamese citizens is dramatically increasing. It was 3.7kg/person in 1995, went up to 6kg/person in 2000 and in 2007, it was about 12.3kg/person. Until 2020, the average consumption level of milk is estimated to increase to 20kg/person. Vietnam is one of the countries having a high level of economic growth in the world since the purchasing ability rises gradually, consisting of milk and milk-related product. These days, the average consumption level of Vietnamese is still lower than that of Asian area (35kg/person). On the other hand, the production ability of the domestic factories is not in position to meet the demand. It is undeniable that the milk market in Vietnam is in growing period. Therefore, with the competitive advantage in technology of a foreign company, we could be confident with our project. 1.3.

Political Stability

Vietnam has a strategic location as it is located in the center of ASEAN and also close to the other big markets in Asian, especially China. It long coast directly accesses to South China Sea and close to the main shipping routes of the world, which provide perfect conditions for commerce. The political stability plays an indispensable role in economic development process in Vietnam, contributing to policies from the government. The stable political background assists Vietnam to be peaceful and prosperous. It is obvious that Vietnam is a developing country, which is encouraging the foreign direct investment (FDI) from the foreign countries. As a result, the Vietnamese government established many preferable policies to attract FDI capital and promote the investment in areas or domains where the government directs the investment activities. Since Vietnam is in the process of transforming into market economy, investment environment still remains disadvantages, namely less developed infrastructure,

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insufficiency of uniformity in legal framework, the rate of unskilled labor is high. Therefore, the establishment and application of preferable policies to attract capital is necessary to offset the existing limitations. This is a good new for our company when we decide to invest in Vietnam. In terms of specific policies, the investment law in 2014 stipulated 13 groups of domains and 3 types of area to encourage investment and assigned the government to specify the fields and eligible for tax incentives. Accordingly, the specific level of tax incentives is prescribed in tax law. The preferable regulations on attracting the FDI are specified in the following legal documents: Investment Law 2014 Law on Enterprise Income Tax amended 2013 Law on Export and Import Tax 2016 Decree No.118/2015/ND-CP of the government detailing and guiding the implementation of a articles of the Investment Law Decree No.123/2017/ND-CP amended a number of articles on collection of land use fees, collection of land rents and water surface rents Decree No.57/2018/ND-CP on mechanisms and policies to encourage enterprises to invest in agricultural and rural areas Law on Non-agricultural Land Use 2010 Taking the result of these encouraging policies into account, in recent years, the reduction of the tax burden and diversification of tax incentives have contributed to creating a favorable investment environment to attract FDI. Over the past three decades, the FDI sector has played an increasingly important role in Vietnam’s economy. In conclusion, the current purpose of preferable and attractive policies of Vietnam is to

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increase the FDI capital, contributing...