(Luận văn FTU) exporting SVR 3l rubber of vietnam to india

FOREIGN TRADE UNIVERSITY HO CHI MINH CITY CAMPUS GRADUATION THESIS Major: International Business Management EXPORTING SVR 3L RUBBER OF VIETNAM TO INDIA Author: Duong Tan Vu Student ID: 0952015093 Class: K48CLC Supervisor: Dr Nguyen Xuan Minh Ho Chi Minh City, May 2013 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT LIST OF ABBREVIATIONS LIST OF TABLES, CHARTS AND DIAGRAM INTRODUCTION CHAPTER 1: OVERVIEW OF RUBBER EXPORT OF VIETNAM TO INDIA 1.1 Overview of rubber export of Vietnam 1.1.1 General introduction 1.1.2 Features and Competitive advantages of Vietnam’s natural rubber 1.1.3 Grades and Specifications 10 1.1.4 Factors affecting Exporting activities of Vietnam’s rubber 12 1.2 Overview of India’s rubber market 14 1.2.1 Key indicators 14 1.2.2 Production 15 1.2.3 Consumption 16 1.3 The necessity of improving the export of SVR 3L Rubber of Vietnam to India 19 1.3.1 Contribution of SVR 3L rubber to general rubber export of Vietnam 19 1.3.2 Contribution of Vietnam’s SVR 3L rubber to Indian Market 20 1.3.3 Contribution of Indian Market to Vietnam’s SVR 3L rubber exporting 20 1.3.4 Social – economics benefits of exporting SVR 3L rubber 21 Summary of chapter 23 CHAPTER 2: CURRENT SITUATION SVR 3L RUBBER EXPORT OF VIETNAM TO INDIA PERIOD 2007-2012 24 2.1 Current situation of rubber export of Vietnam to India and the contribution of SVR 3L grade period 2007-2012 24 2.1.1 Rubber export turnover 24 2.1.2 Structure of natural rubber export 29 2.1.3 Rubber export price 33 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2.1.4 Distribution channels 35 2.1.5 Shipment method 37 2.1.6 Trade promoting activities 38 2.2 Assessments of the current situation of SVR 3L rubber export of Vietnam to India 51 2.2.1 Achievements and reasons 51 2.2.2 Limitations and reasons 53 Summary of chapter 54 CHAPTER 3: THE OUTLOOK, ORIENTED DEVELOPMENT AND RECOMMENDATIONS FOR PROMOTION OF SVR 3L RUBBER EXPORT OF VIETNAM TO INDIA 55 3.1 The outlook of SVR 3L rubber export of Vietnam to India period 2013 – 2018 55 3.1.1 Opportunities 55 3.1.2 Threats 56 3.2 Oriented development and objectives of solutions 57 3.2.1 Oriented development 57 3.2.2 Objectives of solutions 57 3.3 Solutions for promotion of SVR 3L rubber export of Vietnam to India period 2013 – 2018 58 3.3.1 Solutions for improving competitive advantages of SVR 3L rubber 58 3.3.2 Solutions for guaranteeing stable and sustainable sources of supply 69 3.3.3 Solutions for improving human resources 73 3.3.4 Solutions for development and innovation of production technology 75 Summary of chapter 77 CONCLUSION 78 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF ABBREVIATIONS Abbreviation Full word ADS Air-Dried Sheets AIRIA ASEAN All India Rubber Industries Association The Association of Natural Rubber Producing Countries The Association of Southeast Asian Nations DRC Dry Rubber Content NR Natural rubber PLC Pale Latex Crepe RSS Ribbed Smoked Sheets SR Synthetic rubber TCVN Vietnamese Standards TSR Technically Specified Rubber VRA Vietnam Rubber Association VRG Vietnam Rubber Group DEPB Duty Entitlement Passbook Scheme DEEC Duty Exemption Entitlement Certificate SION Standard Input Output Norms DFIAS Duty Free Import Authorization Scheme DFRC Duty Free Replenishment Certificate EOU Export Oriented Units EPZ Export Processing Zones ANRPC LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES, CHARTS AND DIAGRAM No Type Name World’s rubber production Page Chart 1.1 Table 1.1 Chart 1.2 Chart 1.3 Table 1.2 Table 1.3 Table 1.4 Table 1.5 Table 1.6 10 Table 1.7 11 Table 1.8 India’s rubber production 15 12 Table 1.9 India’s rubber small holdings and estates 16 13 Table 1.10 India’s rubber consumption 16 14 Table 1.11 Import as percentage to consumption of NR of India 17 15 Table 1.12 16 Table 1.13 India’s rubber consumption - sector wise 18 17 Table 1.14 India’s rubber consumption according to end products 19 18 Table 1.15 Major Export market of Vietnam’s SVR 3L in 2012 20 19 Chart 1.4 Bilateral trade between Vietnam – India 22 Natural rubber production of major rubber producing countries World natural rubber consumption Consumption of NR in main consuming countries in 2012 Area, output and productivity of Vietnam’s natural rubber period 2008 - 2012 Region-wise output and productivity of Vietnam’s natural rubber in 2011 Production type – wise output and productivity in 2011 Vietnam’s natural rubber output, import and consumption in 2011 End uses of NR Key Indicators of Indian natural rubber industry (2010-2011) NR consumption per capita of major NR consuming countries in 2012 6 7 11 14 17 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 20 Chart 2.1 Rubber Export volume and value of Vietnam 24 21 Table 2.1 Origin-wise Vietnam’s natural export volume in 2012 25 22 Table 2.2 Top export market of Vietnam’s NR in 2012 26 23 Table 2.3 NR export turnover of Vietnam to India 28 24 Table 2.4 25 Table 2.5 Export Rubber grades produced in Vietnam in 2012 29 26 Table 2.6 Export Turnover of SVR 3L Rubber 30 27 Table 2.7 28 Table 2.8 Export structure of Vietnam’s NR to India 32 29 Chart 2.2 Export value and export price of Vietnam’s NR 33 30 Table 2.9 31 Table 2.10 32 Diagram 2.1 Supply chain of rubber from field to producers/exporters 33 Table 2.11 Shipping term - wise export volume to different markets in 2012 37 34 Table 2.12 Import Duty Structure for the year 2012-2013 44 35 Table 2.13 Import Duty Calculation 45 Import Value of major NR import market of India in 2011 Main Rubber Grades of Vietnam exported to major market in 2012 Average export price of major grades in Vietnam’s NR export to India Export Price of Vietnam’s SVR 3L to major export markets 28 31 34 35 35 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com INTRODUCTION I The necessity of the topic In the industrialization and modernization of the country, rubber industry has played an increasingly important part Rubber is an economic crop with social, economy and political benefits Over years, Rubber is considered to be a major export product of Vietnam with export value of over billion USD a year Vietnam is now the 4th largest rubber exporter with presence in over 78 countries However, a majority of Vietnam rubber is exported to China market, which contains many risks, especially in payment and price fluctuation This places a need to diversify the export market of Vietnam in recent years Since 2010, India appears to be a very important strategic partner of Vietnam Rubber export to India market has improved amazingly, especially SVR 3L grade Aware of the importance and necessity of the diversification of Vietnam’s natural rubber and competitive advantage of SVR 3L grade, the writer has chosen the graduation thesis with topic: “Exporting SVR 3L Rubber of Vietnam to India” II Research subject Research subject of this thesis is the export Vietnam’s SVR 3L rubber to Indian market III Research scope For content: The current situation about exporting activities of Vietnam’s SVR 3L rubber in India market in the period of 2008 – 2012 For time: research about export of Vietnam’s SVR 3L rubber to India market in the period from 2008 to 2012 IV Research objective The objective of this thesis is to evaluate export competitiveness of Vietnam’s natural rubber to India market in the period from 2008 to 2012, and give some suggestion about solution to improve export competitiveness of Vietnam’s natural rubber in the period of 2012-2020 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com V Research method The research methods are collecting, analyzing, comparing between theory and reality based on information sources of experts, researchers, associations, government agencies, enterprises and newspapers Structure of the thesis includes chapters: CHAPTER 1: OVERVIEW OF RUBBER EXPORT OF VIETNAM TO INDIA CHAPTER 2: CURRENT SITUATION SVR 3L RUBBER EXPORT OF VIETNAM TO INDIA PERIOD 2007-2012 CHAPTER 3: THE OUTLOOK, ORIENTED DEVELOPMENT AND RECOMMENDATIONS FOR PROMOTION OF SVR 3L RUBBER EXPORT OF VIETNAM TO INDIA Although a lot of effort has been invested in research and evaluating process, there are limitations in time and research resources therefore, the thesis might contain mistakes As a writer, I welcome all comments from professors and my colleague for further development on my findings The writer would like to express my deep gratefulness to Vietnam Rubber Association, Dr Tran Thi Thuy Hoa, Chief Secretary of Vietnam Rubber Association for sincere support The writer would also like to say thank to lecturers of Foreign Trade University for knowledge and experiences, which is the key factor helping the writer complete this thesis, especially Associate Professor, PhD Nguyen Xuan Minh for his devoted instructions Ho Chi Minh City, April, 2013 Writer Duong Tan Vu LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1: OVERVIEW OF RUBBER EXPORT OF VIETNAM TO INDIA 1.1 Overview of rubber export of Vietnam 1.1.1 General introduction The term "rubber" encompasses not only the natural product that yields from the tree Hevea Brasiliensis and other vegetative sources but also the variety of synthetic polymers or lesser degree to natural rubber Generally, "rubber" is used in its wider meaning to encompass both the natural product and synthetic materials commonly known as "synthetic rubber" However, in the scope of this thesis, “rubber” without any further explanation is referred as natural rubber 1.1.1.1 Natural rubber and synthetic rubber Physically, the properties of natural rubber (NR) are plasticity, resistance to electricity, adhesiveness and elasticity Chemically, NR is a high-molecular weight terpene hydrocarbon polymer NR is found in the lattices of over 2000 species of plants belonging to 311 genera of 79 families However, Hevea Brasiliensis now accounts for over 99% of NR produced and used because of high yield and low impurities Contrary to NR, synthetic rubber (SR) has no specific chemical or technical connotation; it usually refers to a group of high-molecular weight polymers, having physical properties similar to NR 1.1.1.2 Collection of natural rubber Natural rubber is collected in form of latex, which is a neutral milky fluid flowing out of a cut on the bark of the tree This fluid flows down to a collection container, which can be half shells of coconut or plastic cups… Latex should be collected as soon as possible after the flow has ceased, which may be to hours after tapping Latex is then transferred into galvanized iron buckets Some trees will continue to drip after the collection and this leads to a small amount of "cup lump" which is collected at the next tapping In some countries, farmers may intentionally collect rubber in form of cup lump instead of latex because it takes less labor In terms of latex, tappers have to wait on field to collect latex from containers before coagulating For cup lump, they can come back after several days to collect cup lump in containers without having to wait on field The LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com latex that coagulates on the cut is also collected as "tree lace" Tree lace and cup lump together account for 10–20% of the dry rubber produced Latex that drips onto the ground is called "earth scrap", which is also collected for processing of low grade product 1.1.1.3 Production trend Chart 1.1: World’s rubber production Unit: 1000 metric tons 60,000 50,000 40,000 Total Rubber 30,000 Synthetic Rubber 20,000 Natural Rubber 10,000 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 (Source: Natural rubber statistics 2012, Malaysian Rubber Board) The world rubber production increases very fast over years in general In 2012, total rubber production reached over 26.4 million metric tons, increased by 1.31% over the previous year The period 2008-2009 marked the crisis of global economy, so the world’s total production of rubber declined in this period and recover faster in 2010 with an increase of 11.03% The synthetic rubber production is more sensitive to the global economy than natural rubber production This is because natural rubber production is strongly affected by climate and rubber’s tree yield LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 78 CONCLUSION Over years, China is the main export market of Vietnam’s natural rubber However, it turns out to be very volatile and strict in recent years This pressure has pushed Vietnam’s exporters to look for another potential market and India appears to be a really good substitute SVR 3L is the main rubber grade, which takes the largest proportion in natural rubber export structure of Vietnam Therefore, increasing the value of SVR 3L rubber export of Vietnam to India is very necessary to help lessen the risks of focusing too much on one single market The thesis with topic: “Exporting SVR 3L Rubber of Vietnam to India” has focused on the problems and draws some results as follow: Build a base of insights including natural rubber’s plantation and collection, the increasing importance of natural rubber over synthetic rubber, the description and applications of each rubber types and grades, the production and consumption trends The thesis also clarifies major factors affecting exporting activities of Vietnam’s natural rubber Study about Vietnam’s rubber industry with its consumption, production, different grades with its national scheme code Besides, the thesis also emphasize the difference of Vietnam compared to other major producing countries in terms of the ratio between small holdings and estates After analyzing the trends as well as comparison with other countries, the writer has drawn some assessment as followed: + The plantation area, production, export volume of SVR 3L of Vietnam to India has been improved over year This shows the increasingly dominant trend of Vietnam’s natural rubber over Indian market Vietnam now is the 3rd largest natural rubber export market of India with 7% market share + The policies of the governments with effective operation of Vietnam Rubber Association and Rubber Research Institute of Vietnam have brought about a powerful strength of natural rubber production domestically + However, the thesis also found out weaknesses in exporting activities of SVR 3L, which leads to lower price of SVR 3L in India market This is due to ineffective quality control of raw natural rubber and inconsistent quality between LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 79 exporters The difference in quality is widened between private exporters and staterun exporters After detailed analysis and evidences, the thesis has given comprehensive solutions with participation of the Government, enterprises, growers and supporting organization such as Vietnam Rubber Association and Rubber Research Institute of Vietnam, Rubber Industry College to improve the price of SVR 3L rubber export and create a trust-worthy brand of Vietnam’s natural rubber The writer hopes that with analysis, assessment and solutions presented, the thesis can contribute partly to the improvement of price of Vietnam’s SVR 3L rubber in particular and Vietnam’s natural rubber in general LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com REFERENCE I VIETNAMESE DOCUMENTS An Binh Securities, 2012 Báo cáo phân tích ngành cao su [pdf] Ho Chi Minh City Available at: [Accessed 11 April 2013] BÁO ĐIỆN TỬ CỦA CHÍNH PHỦ NƯỚC CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM, 2012 Bảo đảm phân bón cho sản xuất nơng nghiệp năm 2013 [Online] Available at: < http://baodientu.chinhphu.vn/Home/Bao-dam-phan-boncho-san-xuat-nong-nghiep-nam-2013/201211/155653.vgp> [Accessed April 2013] Consulate General of Vietnam in Mumbai, 2010 Giới thiệu thị trường Ấn Độ Ho Chi Minh City, Vietnam, pp.79-85 Department of Industry and Trade of Hai Duong Province, 2012 Xuất sang Ấn Độ tăng mạnh [Online] Available at: < 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Vietnam Rubber Group, 2012 Quy trình kỹ thuật cao su Ho Chi Minh City, PP33-56 II ENGLISH DOCUMENTS 23 AIRIA, 2012 Member Directory 2012-2013 [Online] Available at: