(Tiểu luận FTU) lựa chọn thị trường xuất khẩu sữa TH truemilk

FOREIGN TRADE UNIVERSITY SCHOOL OFECONOMICS AND INTERNATIONAL BUSINESS oOo INTERNATIONAL MARKETING MARKET SELECTION FOR EXPORTING TH TRUE MILK’S PASTEURIZED FRESH MILK Lecturer: Dr Tran Thu Trang (PhD) Class: MKTE401.1 Hanoi March 2020 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com OUTLINE Introduction Section 1: Export potentiality of TH true MILK and its product category pasteurized fresh milk 1.1 TH true MILK introduction 1.1.1.  General introduction of TH true MILK 1.1.2.  Export potentiality of TH true MILK 1.2 Pasteurized fresh milk 1.2.1.  General information .5 1.2.2.  Export potentiality of the product Section 2: Criteria for selecting potential countries for TH true MILK’s pasteurized fresh milk Criterion 1: List of the world's largest dairy product importing countries (Selection criterion) Criterion 2: Countries that TH True Milk has successfully exported milk to (Rule-out criterion) Criterion 3: Import tax rate (Selection criterion) .6 Criterion 4: Import growth rate (Selection criterion) Section 3: Scoring and selecting the potential market for passteurized fresh milk of TH true MILK 1.1 Aggregate demand 1.2 Import turnover 1.3 Technical and quality standards 1.4 Import growth rate 11 1.5 The stability of the exchange rate 12 1.6 Scoring .15 Appendices 16 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com INTRODUCTION It is common knowledge that milk is a nutrient-rich food for well-rounded enhancement of human body Nowadays, people can easily buy a paper-packed milk in any grocery stores with a reasonable price.  In the context of globalization, milk is one of a potential products for Vietnam enterprises to enter other foreign markets thanks to geographical advantage, tropical weather and the preferences of the world market However, there are still hidden challenges for Vietnam to make a wise decision on which country to expand milk consumption Therefore, the objective of report is to analyze several foreign markets based on data collected from various sources and figure out some promising countries for TH true MILK to boost their business LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com   Section 1: Export potentiality of TH true MILK and its product category pasteurized fresh milk  1.1 TH true MILK introduction 1.1.1.  General introduction of TH true MILK TH true MILK is among the most famous milk producers in Vietnam It laid the very first foundation for developing the fresh milk industry in Vietnam Over the past 10 years, TH true MILK bought state-of-the art technology from Israel and has launched different products made from milk to meet the demand of local market and some outbound ones as well 1.1.2.  Export potentiality of TH true MILK -          Large production scale (farms, machinery, ) -          Famous and reliable brand name -          A variety of nutrient milk products 1.2 Pasteurized fresh milk 1.2.1.  General information Pasteurized milk offers a new selection for consumers This category is suitable for everyone, especially those who are suffering from canxi deficiency LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1.2.2.  Export potentiality of the product Milk has been exported a lot of countries However, no Vietnam milk producers can enter Chinese market for years except for TH true MILK It is the first Vietnamese brand that fulfils strict standards: certificate of quarantine, veterinary and public health requirements, Therefore, it can be concluded that TH true milk products, including pasteurized fresh category is a tasty and quality product Chances are that this kind of milk can be very successful in other markets with proper strategy LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Section 2: Criteria for selecting potential countries for TH true MILK’s pasteurized fresh milk Criterion 1: List of the world's largest dairy product importing countries (Selection criterion) Countries that import a lot of milk will show the level of attractiveness of that market On the other hand, choosing countries with low import turnover will make it difficult to find partners willing to import the company's products Furthermore, the welcome level and market demand is also lower Trade Map has listed the top 20 largest dairy importing countries and territories in the world in 2018, respectively: China, Germany, Hong Kong (China), Belgium, Netherlands, Italy, Algeria, France, Mexico, Indonesia, Malaysia, United Arab Emirates, Philippines, Russia, Singapore, United Kingdom, Ireland, Poland, Thailand, Bangladesh (Table 1) Accordingly, China leads with 12.3% of import turnover global dairy exports (equivalent to US $ 3.4 billion) and the 20th place country is Bangladesh with 1.3% of global dairy imports (equivalent to US $ 347 billion) Criterion 2: Countries that TH True Milk has successfully exported milk to (Rule-out criterion) We are looking for potential export markets for TH True Milk, which are countries that has never been exported to Therefore, we need to eliminate the markets where the enterprise has successfully exported is China In fact, the number of Vietnamese dairy companies are allowed to export pasteurized fresh milk products to foreign markets is very limited and Th True Milk is the first company to successfully officially export to the Chinese market Criterion 3: Import tax rate (Selection criterion) Import tax rates are also an important factor to be considered when selecting markets When the import tax rate is 0%, the price of the product will be lowered, making it easier to compete on price with competitors Based on the table of import tax rates for fresh milk products from Vietnam am provided by Market access map of Trademap, we obtained the results of countries with import tax of fresh milk products of 0% which are Malaysia, Laos, Thailand, Singapore, Indonesia, China, Hong Kong (China), Australia and New Zealand LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Criterion 4: Import growth rate (Selection criterion) Countries with high growth rates of imported fresh milk show the increasing demand of the market On the other hand, in the markets with low or negative import growth rates, competition between competitors will increase, and it shows a negative signal of the industry Based on criteria 1, and 3, we calculate the import growth rates of the countries out of the 20 largest dairy importing countries with a milk import tax rate of 0% Based on the data from the table, we have the results of calculating the market growth during the 5-year period from 2014-2018: Average growth in imported value 2014-2018 (%) Thailand Indonesia Malaysia 15,32 5,32 8,40 Conclusion: Based on these criterias, we have come to the decision of making further research with markets with highest positive fresh milk import growth rates: Indonesia, Malaysia and Thailand Thailand Indonesia  Malaysia 10.540 15.066 56.044 69th rank 63th rank 32th rank Tax (%) 0 Average growth in Imported value 2014-2018 15,32 5,32 8,40 Imported value 2018 (thousand USD) (%) LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Section 3: Scoring and selecting the potential market for passteurized fresh milk of TH true MILK 1.1 Aggregate demand: Selection purpose: Understanding the demand of the market will help the company predict the level of interest and the willingness to pay at different prices for the product of the people in that country By comparing the growth of demand of the same commodity in different markets, businesses can partially predict the possibility of the product's success in that market Market growth is reflected in the increase in quantity, quality of goods, services that indicates an increase in consumer demand and tastes And with deep understanding of that, the ability to export, develop and expand market share and earn higher profits for the company will be much higher This criteria accounts for 25% of the final score 1.2 Country Thailand Indonesia Malaysia Milk consumption in 2019 (tons) 900.650 2.400.000 382.710 Average predicted volume growth 2019-2023 (%) 2.79 4.30 1.14 Rate Import turnover: Selection purpose: Import turnover is the total import value of a country for a given item, showing how much the country spends on importing that product, from which gives us some details of the market’s potential This criteria accounts for 15% of the final score Country Thailand Indonesia Malaysia Imported value in 2018 (thousand tons) 10.540 15066 56.044 Imported value in 2019 (thousand tons) 12.235 NIF 63.705 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Rate 1.3 Technical and quality standards: Selection purpose: Technical and quality standards are always one of the most important criteria that decide whether can the products enter the market of a country or region or not The tighter the standards are, the more difficult it is to enter that market This criteria accounts for 30% of the final score  Thailand: Milk imported to Thailand has to abide by national food laws The laws and regulations governing the Thai food industry are confined to the scope of the Food Act B.E 2522 (1979) The Food Act authorizes the Ministry of Public Health’s Food and Drug Administration (FDA) to implement and administer the Food Act.  Besides, imported milk also has to follow other regulations:  Food Additives Regulations  Packaging and Container Regulations:  The Thai FDA requires that all packaging and containers of food must comply with Ministerial Notification No 92, B.E 2528 (1985) and No 295, B.E 2548 (2005) The guidelines on packaging and containers are as follows:  (A) A container must:  - Be clean  - Not emit any heavy metal or other substances that would contaminate food in a volume to be harmful to health  - Free of germ contamination  - Emit no food contaminating color.  (B) Containers which are made from ceramic or enameled metal must conform to subsection (A) and meet lead and cadmium standards as described in Schedule of the Ministerial Notification No 92 (B.E 2528) Re: Prescription of Quality or Standard for Food Containers, Use of Food Containers, and Prohibition of Use of Things as Food Containers.  LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com (C) Containers which are made of plastic must conform to not only the quality or standard in subsection (A), but also the quality or standard in Schedule of the Ministerial Notification No 92 (B.E 2528) Re: Prescription of Quality or Standard for Food Containers, Use of Food Containers, and Prohibition of Use of Things as Food Containers.  (D) Plastics in the form of sheets or bags which are used as food containers must not be made from used plastic and must not have coloring except for: a) laminate plastic, only the layer that’s not in direct contact with the food; and b) plastic which is used for packing shelled fruits.  (E) Plastic containers of milk, milk products, and other products similar to milk products (such as soybean milk and coconut milk) must be made from Polyethylene, Ethylene, 1-Alkene Copolymerized resin, Polypropylene, Polystyrene or Polyethyleneterephthalate.  (F) Use of containers that have previously been used to pack or wrap fertilizers, hazardous substances or any substance likely to be harmful to humans is prohibited.  (G) Use of containers that have been made to pack other products, which are not food, that bear a design or statement that may mislead to the actual contents of a particular food is prohibited.   Labeling requirements for Cow’s Milk: Exporters must follow new labeling requirements stated under the Ministry of Public Health Notification No 350 Re: Cow’s Milk that governs the display and declaration statements of certain types of cow’s milk on food labels However, for other general labeling requirements, the exporter can refer to the Ministry of Public Health Notification No 194 Re: Food Labels  Indonesia: The standard of exporting milk to Indonesia is described in Export Control (milk & milk products) orders 2005 In accordance, the additive ingredients contained in milk must not exceed the limit in food standard code, which is: - Somatic cell count: 200,000 cells/ml for bovines 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - Total plate count at 30’C for 72 hours: 25,000 cfu/ml - E coli: less than 100 cfu/ml - S aureus: less than 100 cfu/ml  Malaysia: In Malaysia, milk products shall be allowed to import by the Director General of Veterinary Services, Malaysia or the State Director Each consignment of milk or milk products shall be accompanied by an official veterinary health certificate in English dated within seven (7) days of export and endorsed by a competent veterinary officer of the Government Veterinary Authority of the exporting country.  Milk products were processed, packed and stored under sanitary condition and not contain any preservative, colouring matter, residue or any foreign substance or harmful material injurious to health including melamine and that every precaution has been taken to prevent contamination of the milk or milk products during the processing, packing, storing and handling prior to being exported to Malaysia.  In addition, milk products shall undergo following process :  In case of milk or cream for human consumption, the milk used has been treated by ultra high temperature (UHT) at a minimum of 132oC for at least second or by simple high temperature short time pasteurisation (HTST) at 72 oC for at least 15 seconds for milk with pH less than 7.0 or double HTST for milk with pH or over Milk for animal consumption has been subjected to either double HTST or in case of simple HTST or UHT, this was combined with either physical treatment to maintain pH for at least hour or additional heating to at least 72 oC combined with desiccation Country Thailand Indonesia Malaysia Rate 1.4 Import growth rate: 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Selection purpose: Average import growth rate and annual import growth rate reflects the country's future import trend for fresh milk which will help determine the development potential of that market in the future This criteria accounts for 20% of the final score: Country Thailand Indonesia Malaysia Annual import growth rate 2014-2015 (%) -37,09 4,16 -19,64 Annual import growth rate 2015-2016 (%) 28,67 -35,34 0,87 Annual import growth rate 2016-2017 (%) 37,01 38,00 36,92 Annual import growth rate 2017-2018 (%) 32,68 14,45 15,44 Average import growth rate 2014-2018 (%) 15,32 5,32 8,40 Rate 1.5 The stability of the exchange rate Selection purpose: The exchange rate shows the value relationship between two currencies of the two countries The erratic exchange rate will increase the risk of profit This criteria accounts for 10% of the final score 12 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Thailand: Indonesia: 13 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Malaysia: Country Thailand Indonesia Malaysia 14 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Rate 1.6 Scoring: Criteria Percentage Thailand Indonesia Malaysia Aggregate demand 25% Import turnover 15% Technical and quality standards 30% Import growth rate 20% The stability of the exchange rate 10% 4 Total 100% 2.73 3.45 3.0 In conclusion, Indonesia is the potential market for TH TRUE MILK 15 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 16 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com APPENDICES The list of permitted food additives in Thailand is available at: http://www.fda.moph.go.th/sites/food/FoodAdditives/ MOPH(No.389)B.E.2561(2018)Re_AdditiveNo.5.pdf The Thai FDA requirements about packing and containers of food: Ministerial Notification No 92, B.E 2528 (1985) and No 295, B.E 2548 (2005) The standard of exporting milk to Indonesia is described in Export Control (milk & milk products) orders 2005 https://www.legislation.gov.au/Details/F2005L02871 Top countries which import milk in 2018 http://www.worldstopexports.com/international-markets-for-imported-milk-by-country/? fbclid=IwAR0UGJsrTGEq27ST62VKjdX-bTvKxwCX91cYkKTrMSJ4wVc_FQItKXisp84 List of the biggest milk import countries 2018 Rank Country Imported milk (US$) % World total China 3.4 billions 12.3 Germany 1.8 billions 6.4 Hong Kong 1.6 billions 6.0 Belgium 1.4 billions 5.1 Netherlands 1.3 billions 4.6 Italy 1.1 billions 4.1 Algeria 1.1 billions 4.0 France 907.8M 3.3 Mexico 754.4M 2.7 10 Indonesia 525.4M 1.9 11 Malaysia 522.2M 1.9 12 United Arab Emirates 520.6M 1.9 13 Phillippines 507.6M 1.8 17 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 14 Russia 488.1M 1.8 15 Singapore 467.0M 1.7 16 United Kingdom 464.4M 1.7 17 Ireland 408.7M 1.5 18 Vietnam 392.3M 1.4 19 Poland 370.3M 1.3 20 Thailand 351.0M 1.3 Milk import tax rate No Country Import tax rate Malaysia Laos Thailand Singapore Indonesia China Hong Kong, China Australia New Zealand 10 Myanmar 0.4 11 Russia 3.4 12 Cambodia 13 the USA 7.3 14 Uruguay 12.9 15 Denmark 24.3 16 Slovakia 24.3 18 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 17 Austria 24.3 18 Belgium 24.3 19 Slovenia 24.3 20 Ireland 24.3 21 Czech Republic 24.3 22 Italy 24.3 23 Poland 24.3 24 the UK 24.3 25 Netherlands 24.3 26 Germany 24.3 27 France 24.3 28 India 30 29 Japan 106.3 Average growth in imported value 2014-2018 (%) Thailand Indonesia Malaysia 15,32 5,32 8,40 Annual growth in imported value (%) Thailand Growth 2014- Growth 2015- Growth 2016- Growth 2017- 2015 2016 2017 2018 -37,09% 28,67% 37,01% 32,68% 19 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Indonesi a Malaysia 4,16% -35,34% 38,00% 14,45% -19,64% 0,87% 36,92% 15,44% Imported value in countries yearly ( thousand USD) 2014 2015 2016 2017 2018 Thailand 7.163 4.506 5.798 7.944 10.540 Indonesia 14.164 14.753 9.539 13.164 15.066 Malaysia 43.742 35.153 35.459 48.550 56.044 20 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... of the most important criteria that decide whether can the products enter the market of a country or region or not The tighter the standards are, the more difficult it is to enter that market This... Understanding the demand of the market will help the company predict the level of interest and the willingness to pay at different prices for the product of the people in that country By comparing the... 4: Import growth rate (Selection criterion) Countries with high growth rates of imported fresh milk show the increasing demand of the market On the other hand, in the markets with low or negative