04 pacific foods company export luc ngan lychees to new zealand market

FACULTY OF INTERNATIONAL BUSINESS MAY 2022 PACIFIC FOODS COMPANY EXPORT LUC NGAN LYCHEES TO NEW ZEALAND MARKET LECTURER PRESENTED BY Nguyễn Thu Hương Team MEMBERS NGUYỄN THỊ HÀ TRANG 22A4050300 ĐÀO MINH NGUYỆT 22A4050491 TRẦN NGỌC BÁCH 22A4050021 BÙI THỊ THU HƯỜNG 22A4050429 NGUYỄN THỊ VI ANH 22A4050373 NGUYỄN THỊ HỒNG 22A4050146 NGUYỄN PHƯƠNG THANH 22A4050136 PREFACE I INTRODUCTION OF PACIFIC FOOD COMPANY History Philosophy, mission, vision Export activities Products II INTERNATIONAL BUSINESS CONTENTS STRATEGY OF THE ENTERPRISE PESTEL model analysis Advantages and disadvantages of direct exporting Proposing solutions for company Pacific Foods The expected result of the 11 13 14 company CONCLUSION References 15 16 PREFACE Internationalization of the world economy is an inevitable and objective trend The international integration of Vietnam's economy through the market mechanism is an example of this trend Vietnam is known to the world as a country possessing a diverse cuisine and rich products throughout the country Especially, in recent years, the import and export fruit market in our country has grown more and more, conquering many of the most difficult and demanding foreign markets An equally famous fruit of Vietnam that has been exported to foreign countries and gained much favor is lychees Specifically, this fruit went to Japan, China, Australia, Thailand… and recently, the first batch of lychees was officially exported to Europe under the EVFTA in 2021 Aware of the bright prospects for fresh Vietnamese lychee, Pacific Food company, one of the leading enterprises in the field of fruit export, always tries to find new potential markets and targets New Zealand, a promising export market This is also the aim of our group study: Pacific foods company export Luc Ngan lychees to the New Zealand market The research paper will specify the factors that the company will have to consider before making an export decision The content consists of main parts: Part I looks at the Introduction about Pacific foods company and lychees fruit Part II focuses on PESTEL analysis of New Zealand market, market penetration methods of the company, proposing solutions for the company and showing possible results of this research problem I INTRODUCTION OF PACIFIC FOOD COMPANY History Pacific Foods Joint Stock Company (Pacific Foods) was formerly a Vietnamese traditional fish sauce producer and exporter After nearly a decade of establishment and development, now Pacific Foods has become a multiindustry enterprise with the following fields: producing and trading spices, agricultural products and clean food; consulting import and export standards, food safety and hygiene; construction consultancy, projects suitable for the domestic market and standards of international import and export regulations Pacific Foods has its head office at 170 Bui Thi Xuan, Pham Ngu Lao ward, district 1, HCMC; office at 156 Nam Ky Khoi Nghia, Ben Nghe Ward, District 1, Ho Chi Minh City and owns a factory belonging to Phan Thiet Mui Ne Fish Sauce Processing and Export Joint Stock Company at Lot 47-48 Area processing fish sauce, Phu Hai ward, Phan Thiet city, Binh Thuan province and a system of factories to brew traditional fish sauce, with a standard laboratory in Phan Thiet, Binh Thuan province - the capital of traditional fish sauce Vietnam Philosophy, mission, vision Through the process of formation Pacific Foods has a team of experts, and development, Pacific Foods has engineers, highly qualified and skilled, affirmed enthusiastic its position in the and knowledgeable in production and trading of spices and the field Pacific Foods also owns the clean agricultural products in the traditional fish sauce brands Mami domestic, and and Hao Hang, which are currently American markets The high-quality selling TOP on Amazon e-commerce products produced by the company platform; Youmi chili sauce; Phuc Lai are always trusted by customers, Bles Rice ST25; and is an exporter of used by customers for their good tropical fruits such as lychee, dragon quality, reasonable prices, controlled fruit, by quality production processes that operating meet sustainably and being responsible to ISO, Asian, European HACCP, FDA The company also owns perfect pre-sale and after-sales service, which jackfruit to the effectively, EU, always developing the community is With the vision to become the highly appreciated by customers leading brand in the production and sales of spices and agricultural products in Vietnam and reach the international level, Pacific Foods is constantly innovating, improving and innovating to improve the quality of products and services Pacific Foods is committed to bringing customers the best values, towards sustainable development so that Pacific Foods will always be a brand of quality and trust! Export Activities Recently, the enterprise has exported many products in large quantities to many countries, such as the United States, EU, Canada Specifically: In June 2021, Pacific Foods exported the first batches of Vietnamese lychee to the EU to enjoy incentives from the Free Trade Agreement between Vietnam and the European Union (EVFTA) Previously, Pacific Foods also exported the first batch of Thanh Ha (Hai Duong) lychees to this market Recently, on December 31, 2021, Pacific Foods also exported more than 20 tons of Soc Trang 25 fragrant rice to the Canadian market and is also the "closed" shipment in 2021 On March 17, 2022, Pacific Foods Joint Stock Company brought 16 tons of agricultural products and foodstuffs, including fish sauce, instant coffee, premium beverages, etc to the US market Products After conquering the Japanese and Australian markets, Pacific Foods has continued to officially export to the EU a batch of Luc Ngan lychee (Bac Giang) to 27 countries with more than 430 million people, to enjoy incentives from the Association Free Trade Agreement between Vietnam and the European Union (EVFTA) Previously, Pacific Foods also exported the first batch of Thanh Ha (Hai Duong) lychees to this market Witnessing that the first batch of lychee originating from Luc Ngan (Bac Giang) was cleared at Noi Bai International Airport, Mr Nguyen Quoc Toan, Director of the Department of Agricultural Product Processing and Market Development, Ministry of Agriculture and Rural Development said: “Vietnamese agriculture has joined the free trade agreements that have been signed with relevant partners such as CPTPP, EVFTA and these agreements have had positive signals Vietnamese products have been enjoying tax incentives Bac Giang and Hai Duong lychees are key lychee regions with national brands, so reaching out to the world market has affirmed the value of Vietnamese agricultural products, bringing the country's products to the global map The processing of lychee for export to fastidious markets such as Japan, the US, the EU is also seriously guaranteed by the facilities from purchasing, packaging to shipping In addition to the requirements of partners like every year, disinfection work is indispensable All shipments of lychee from Bac Giang, whether for domestic consumption or export, have a certificate of disease safety Pacific Foods continues to export the famous batch of Luc Ngan litchi in Bac Giang to the EU according to GlobalGAP standards, VietGAP Pacific Foods has a process of preliminary processing and preservation, ensuring quality from harvest to consumers, so lychee is always favored and appreciated by consumers in Europe due to its outstanding quality and delicious taste and safe.” It is known that in 2021 Bac Giang province will plant 28,100 hectares of lychee, the output is estimated at 180,000 tons, an increase of 15,000 tons compared to the previous year, of which 318 hectares are according to GlobalGAP process, qualified for export to many countries, difficult markets II INTERNATIONAL BUSINESS STRATEGY OF THE ENTERPRISE PESTEL model analysis Political factors New Zealand is one of the ‘middle power’ countries in the New Zealand follows the world This country is a member constitutional monarchy and the of parliamentary democratic system organizations, among which are of prominent: government administration The Minister head is the and Prime of most major international United Nations, British Commonwealth, US Non- the NATO Allies, ANZUS, OECD, government, and the Monarch Islands Forum Pacific and APEC remains the state’s head The In addition, New Zealand has Monarch appoints the Governor actively Generals of the country as its Trade Agreements (FTAs) such as representatives with the prime RCEP, CPTPP, AANZFTA,… which minister’s consultation Vietnam has also attended New Zealand has a stable political country environment, with the participated Free Those are huge advantages for the Pacific foods company to export lowest Luc corruption level Ngan lychees Zealand CPI score changes of New Zealand 2012-2021 (source: transparency.org) in to New Economic factors New Zealand has a mixed economy, and the country has moved from a protection economy toward free trade and the open market However, this New Zealand is an economically country has an unemployment rate of well-off and prosperous country, and 6.25 in 2021, and the government plans agriculture is its prominent industry to reduce it down to 5.4% Mining, fishing, tourism, forestry, retail, food & beverage, horticulture are construction, other New Zealand has come up with a and relatively significant system Top earning over $70,000 (New Zealand Zealand’s machinery, meat, tax personal tax rate is 33% for anyone industries New simple top fish, dairy, exports drinks, and many fruit, are Dollar), while 10.5% for an income up to wood, $14,000 Companies and corporations others The are taxed at a flat rate of 28% (NZ, 2022) country exports its goods with four GDP in New Zealand is expected to major countries like China, Japan, USA, reach 205.00 USD Billion by the end of and Australia Some of its main imports 2021, according to Trading Economics are wine, cheese, frozen beef, butter, global macro models New Zealand’s sheep meat, sweetened milk, and many GDP is expected to be around $212.00 more Billion Although being a major exporter of in 2022 (Trading Economics, 2022) agricultural products, New Zealand has New Zealand is the world’s leading a relatively high import demand for developed tropical agricultural products Vietnam economic freedom, transparency, and is also an import market for tropical protection of civil liberties Therefore, agricultural products to the country's Pacific market, exporting agricultural products conveniently bring Luc Ngan lychees include products to this potential market mango, dragon fruit and country Foods in terms company of will rambutan New Zealand Imports from Vietnam of Edible fruits, nuts, peel of citrus fruit, melons was US$23.31 Million during 2021, posting a year-on-year growth of 11 percent, according to the United database Nations on COMTRADE international trade Import and export turnover of agricultural products between Vietnam and New Zealand Best country & Demands Social factors New Zealand falls under the world’s best country in terms of satisfaction from life, air quality, social support system, and employment opportunities New Zealand has high per capita demand for fresh fruit and consumers want a wide range of products and fruits year-round According to the New Zealand Ministry of Health, 48 percent of males and 60 percent of females surveyed were shown to consume two or more pieces of fruit per day New Zealand consumers were Demography New Zealand has a total population of once quite price sensitive in the fresh around 4.9 million people(United Nation, fruit space, and small price increases 2022) and it’s the 126th world’s most could populous country Maori and English are However, with income growth and trends official languages of the country There is towards healthier foods, New Zealand no official religion of the state, while consumers are now willing to pay higher Christianity remains the majority religion prices for their fresh fruit than they were However, the average life of male and a decade ago impact purchasing decisions NZ is a country with a large demand female are 80 and 88 years for fresh fruit but there is not enough Diversity New Zealand is the world’s most domestic supply Therefore, most of this diverse country According to a research fresh fruit is imported by NZ, including conducted by CACR (Center for Applied Vietnam New Zealanders are fond of Cross-Cultural Research) in 2012, 89% of succulent fruit, with a large amount of New Zealanders said that it’s good to consumption, the export of lychees fruit have a society with different ethnicities, to the NZ creates favorable conditions for backgrounds, cultures, and religions Pacific Foods company New Zealanders are very much into the world of the Internet Almost half a million people visit food websites each month, and youngsters watch many hours of videos online every day This demonstrates that online businesses have huge potential so Pacific Food Company will Techlonogical factors take advantage of the opportunity to promote lychees closer to New Zealand consumers New Zealand has a diverse and advanced tech sector The sector is rapidly growing and requires more people to come into the industry Many of companies international New have Zealand’s ICT earned an standing for Active internet users as percentage of the total population in New Zealand from 2015 to 2021 innovation and creativity Environmental factors New Zealand is one of the most attractive destinations in the world Jagged glacial mountains, lakes, sandy beaches, bungee jumping, skydiving, biking, hiking, kayaking, rich marine life are some of the attractions and activities that captivate tourists No wonder why Peter Jackson filmed his epic trilogies, Lord of the Rings and The Hobbit in his home country, New Zealand New Zealand’s climate is very good for agriculture It has consistent annual rainfall and does not suffer from long periods of drought However, many New Zealanders are concerned about some environmental challenges such as habitat loss, species decline, air pollution primarily from cars, deforestation, soil health, and soil erosion With oceanic climate, demand for tropical fruit, such as lychees will increase This is a chance for exporting Luc Ngan lychees 10 Legal factors New Zealand is one of the least corrupt governments in the world It totally welcomes foreign direct investment New Zealand ranked No (out of 190 nations) in the World Bank’s ‘Ease of doing business’ in 2018 It has a strong and independent justice system that is highly respected worldwide Employers must not pay any adult employees less than the minimum wage set by the government Because of the effective and friendly legal system, the export products will be treated fairly Luc Ngan lychees is having a big opportunity to be exported to New Zealand Advantages and disadvantages of direct exporting Direct export is a form of export in which manufacturers, companies directly enter into sales contracts to provide services to individual foreign companies With this form, companies directly interact with customers and partners, selling goods abroad without any intermediary organization Pacific foods company is a big enterprise and has export experience, so this is the best method for the company entering New Zealand market On the other hand, direct export allows exporters to grasp quite accurately the market's demand, quantity and price to take measures to change with high international competitiveness, while profits are not shared through many people 11 ADVANTAGES DISADVANTAGES The advantage of having complete control over the product is the price in the foreign market Due to the reduction of intermediary costs, focus on improving product quality, the price is relatively low, which will improve competitiveness The exporter can also proactively determine the terms of sale according to the prevailing competitive trends in the foreign market Enterprise gain direct knowledge of needs of buyers or people end-user and customizable for suitable Businesses maintain relationships with customers Firm can identify new opportunities they may have Customers may prefer to deliver directly with the manufacturer Direct export requires enterprises to have large financial resources to support enough costs of selling, marketing, developing export organizations, and wages of employees At the same time, it needs to have a high-quality staff to research foreign markets, consumption trends, and international marketing strategies, but the cost of paying them is very high Direct exporting is riskier as all the risks involved in export trade such as credits, financing, collection, are borne by the enterprise itself Other expenses for instance: market investigation and research, promotional expenses are also borne by the exporter The import market has many requirements for import procedures, so businesses need to understand all the laws and politics of the importing country That is convenient for making documents, customs clearance, transporting goods, transferring capital, and requiring exporters to manage more 12 3.Proposing solutions for company Pacific Foods After researching about Pacific Foods company and the lychees export industry, we proposed some solutions which will help to improve exporting lychees of Pacific Foods company: In order to overcome the disadvantages of the direct export method: create large financial resources and reduce the risk, Pacific Foods company needs to cooperate with other businesses Currently, the number of enterprises exporting fruit freely is low One of the reasons why businesses are not interested is because of the high risk, the types of costs are also large, typical shapes such as transportation costs Therefore, enterprises should propose that the State should have policies to attract and create favorable conditions for prioritizing benefits so that enterprises can participate more deeply in the manufacturing sector The company needs to edit and publish a Many importing countries are required to ensure manual that summarizes the knowledge base, training courses on growing lychees according to VietGAP and GlobalGAP that Vietnamese fruits are free from diseases and without plant protection according to regulations Regarding protected foods, in order to good inspection, Pacific Foods standards for farmers to be able to penetrate the difficult businesses need to coordinate with the Food Protection Department to market like New Zealand in particular and the international market in general improve the organization of inspection and close supervision of the entire safe fruit growing area, and deploy the level of protection Encrypted identification area to meet official export standards for the purpose of proactively planning business, limiting risks and damages 13 To increase export output, it is necessary to reduce costs, such as transportation costs by asking the State to support the price of transportation by air or sea Lychee is a perishable fruit, it is necessary to facilitate quick commodity information Enterprises of this distribute maintenance forces to ensure security order to separate thread for textile vehicles order to transport lychees exports are guaranteed to be cleared within the day Enterprises should develop and mark traceability on packaging for users, especially users in developed countries, who can easily trace the origin Inside the original published source code, there is full information from the manufacturer, management, harvesting, preliminary processing, translation processing, product quality control when delivered to users The user is assured of the origin and protection of plants The expected result of the company After being licensed to export to the New Zealand market, the company is expected to export 40 tons of litchi, including 17 tons of early litchi and 23 tons of main crop Expected revenue is 10 billion dong, of which production and transportation costs are about billion dong As such, this is a very stable and nice expected outcome, very feasible Therefore, New Zealand is a potential export market for Pacific Foods company 14 CONCLUSION The potential that Luc Ngan lychees bring to the Vietnamese economy in general and the country’s agricultural sector in particular is undeniable Using PESTEL analysis of the New Zealand market showed different advantages but there were still risks that influence exportation of the fruit to this country Pacific foods company must be careful when exporting to New Zealand, a tough market with strict standards At the same time, the study also suggested the best method of market penetration for company is direct export and certain solutions to promote the core value and traditional values of Luc Ngan lychees If the company can meet the standards of New Zealand, Pacific food and Vietnamese lychees will build their reputation and brand when exporting to other markets 15 15 REFERENCES n.d Pacific Foods Accessed May 20, 2022 https://www.pacificfoods.asia/ 2022 Vietnam, New Zealand foster agriculture economies following COVID-19 pandemic https://ncov.vnanet.vn/en/news/vietnam-new-zealand-foster-agricultureeconomies-following-covid-19-pandemic/07757185-623c-4d45-82b8-cd848dd0dcdf Khánh Hoàng 2020 “Xu m ất vải tươi qua cửa giảm ạnh.” CafeF https://cafef.vn/xuat-khau-qua-vai-tuoi-qua-cua- khau-giam-manh-2020060219475648.chn Nguyen, Lan T 2010 “Fresh Thieu lychees quality improvement for the upper segment of the markets based on chain analysis approaches.” Nguy ễn, Thanh 2016 “Thúc đẩy xuất ngoại, trái cần vượt rào cản.” CafeF https://cafef.vn/thuc-day-xuat-ngoai-trai-cay-can-vuot-rao-can20160723101654666.chn Rahman, M., and Joe David n.d “How And What.” How And What Accessed May 20, 2022 https://howandwhat.net/pestel-analysisnew-zealand/ 16 ... group study: Pacific foods company export Luc Ngan lychees to the New Zealand market The research paper will specify the factors that the company will have to consider before making an export decision... export products will be treated fairly Luc Ngan lychees is having a big opportunity to be exported to New Zealand Advantages and disadvantages of direct exporting Direct export is a form of export. .. New Zealand has a stable political country environment, with the participated Free Those are huge advantages for the Pacific foods company to export lowest Luc corruption level Ngan lychees Zealand