Analyzing import activities at sea product import export trading company (simextraco)

lIT' HCMC UNIVERSITY OF FOREIGN LANGUAGES AND INFORMATION TECHNOLOGY DEPARTMENT OF INTERNATIONAL BUSINESS ADMINISTRATION ' GRADUATION PAPER TOPIC: ANALYZING IMPORT ACTIVITIES AT SEA PRODUCT IMPORT EXPORT TRADING COMPANY (SIMEXTRACO) JULY 2006 ,I:h - I tJ ACKNOWLEDGEMENT I would like to express my many thanks to the lecturers and professors of Department of International Business Administration of HUFLIT for the knowledge that I have been taught during the past four years First of all, I am particularly gratefull to my advisor, Mr Nguyen Xu an Minh, for his helpful guidance and corrective action during the time of completing this paper His suggestion and sincere concern for this are very much appreciated In addition, I would like to express my deeply-hearted thanks and great gratitude to Department header of Import Export Trading Department of SIMEXTRACO, Mr Pham Xuan Tu, and Mr Le Huu Hien who are willing to share their knowledge and experience with me Thanks as well to the staff of the Department necessary materials who have assisted in providing me with and documents when I am an internee of the Department Finally, many thanks to my parents, my dear friends, who have helped me much with their valuable encouragement and contribution during my research Nguyen Kim Hong Ngoc July, 2006 I , Hochiminh City University of Foreign Languages and Information Technology Department of International Business Administration ASSESSMENT ON STUDENT'S GRADUATION PAPER Student's name: NGUYEN KIM HONG NGOC Class: KD0203 Topic: Analysing import activities at Sea Product Import -Export Trading Company (SIMEXTRACO) GENERAL ASSESSMENT: 1.1 Necessity o/the research and implications: The research is highly appreciated thanks to its valuable contribution to improve the business performance at Sea Product Import -Export Trading Company (SIMEXTRACO) by focusing on the key activity of the company: importing It is essential to analyse the situation so as to confirm the necessity of improving the procedures and efficiency of the company' activity The research also offers practical solution so that the company can be more active in the competition in the field of international business in the siuation of implimenting the Vietnam- US Bilateral Trade Agreement and the threshold of joining the World Trade Organization 1.2 Methodology: The author has utilized possible research methods by combining desk and field research Therefore, the paper is so practical and the solutions are feasible Diagrams have been used to make it easier to understand the whole paper Academic writing skills: The paper is of good format, coherence, grammar, word choice, which is the result of the author' effort during her studying at the University, especially her hard working during the preparation of this paper CONCLUSION: In conclusion, the paper is well completed and the advisor, by this assessment, highly appricates the paper's academic and practical value Ho Chi Minh City, 5th July, 2006 Advisor NGUYEN XUAN MINH I ABSTRACT Social development results in the evolvement of trading transactions beyond one's own country's border Countries continuously export their competitive goods and services to overseas markets to expand their business ranges and exploit benefits offered by these potential markets Accompanied by export activities, import is not less important Import will supply necessary equipment, machinery, and materials to facilitate export as well as implementation of the industrialization and modernization process of our country Participating in this field is SIMEXTRACO- a company involved in import and export In this research, an introduction about import export activity of SIMEXTRACO will be mentioned, and followed by an overview of import Further information about SIMEXTRACO's import and market structures is related to, and above all process of conducting an import contract will be introduced suggestions which are presented and be followed in the author's import activities at SIMEXTRACO by some effort to improve the as well as to foster the company's integration into the regional and international business environment 111 LIST OF TABLES AND FIGURES Table 1: Import-export turnover of SIMEXTRACO from 2002 to 2005 10 Table 2: VIET NAM'S import export value (1997-2005) 21 Table 3: Import export turnover of Viet Nam in 2004 and 2005 , 22 Table 4: Value of imports in 2005 and Quarter I in 2006 24 Table 5: Import market structure of SIMEXTRACO from 2003 to 2005 29 Table 6: Product structure of SIMEXTRACO from 2003 to 2005 33 Table 7: Insurance Clauses of London Insurance Association 60 1982 Figure 1: Organization chart of SIMEXTRACO Figure 2: Import-export Turnover from 2002 to 2005 10 Figure 3: Vietnam's import and export value (1997-2005) 21 Figure 4: Import market structure of SIMEXTRACO from 2003 to 2005 30 Figure 5: ASIAN import markets of SIMEXTRACO from 2003 to 2005 31 Figure 6:Import Markets 32 Figure 7: Transfer of risk and cost between seller and buyer 58 IV I I TABLE OF CONTENTS - I Pages Contents Acknowledgement Advisor's assessment 11 Abstract 1ll List of tables and figures IV INTRODUCTION 1 Research paper objectives 2 Scope of research Research methodology Contents of the research Chapter 1: SIMEXTRACO'S PROFILE 1.1 General overview 1.1.1 Foundation 1.1.2 Scope of operation 1.2 Organization structure 1.3 Business operation situation 10 1.4 Markets 11 1.4.1 Domestic markets 11 1.4.2 Overseas markets 12 1.5 Advantages and disadvantages in trading activities of SIMEXTRACO 13 Chapter 2: AN OVERVIEW OF IMPORTING 15 2.1 Definition 15 2.2 Benefits and drawbacks 16 2.3 Management 18 of risks in importing 2.4 VietNam's importation in recent years 21 2.5 Opportunities and challenges to import when Vietnam joins WTO 25 I Chapter 3: SIMEXTRACO'S IMPORT ACTIVITIES 29 3.1 Import markets 29 3.2 Import products 33 Chapter 4: PROCESS OF CONDUCTING AN IMPORT CONTRACT AT SIMEXTRACO 4.1 Negotiation for a foreign contract 35 35 4.1.1 Preparations before negotiation 36 4.1.2 Negotiation modes of an import contract at SIMEXTRACO 40 4.1.3 What needs to be negotiated 43 4.2 Conducting an import contract at SIMEXTRACO 69 4.2.1 Opening LlC 70 4.2.2 Naming vessel and booking space 72 4.2.3 Obtaining insurance 72 4.2.4 Getting document profile 73 4.2.5 Making customs clearance 74 4.2.6 Taking delivery of imported goods 78 4.2.7 Payment 79 4.2.8 Making claim 79 Comment 80 CONCLUSION AND SUGGESTIONS 81 REFEREN CES 86 1Prepared by Nguyen Kim Hong Ngoc INTRODUCTION On the road to developing and integrating into world economy, each country needs to go beyond its border, expand its trading activities to other countries Therefore, during the past decades, almost countries have ceaselessly to enhance trading in order to evolve trading is the objective requirement national economy strived Import-Export of the global economy To develop the economy, all nations rely not only on their own production forces but also on the commercial transaction relationships with other countries Obviously, trading has become a vital industry and gained a number of considerable benefits to strengthen each country's development Due to differences on natural resources, climate, labor forces , domestic production can not supply all products or services that meet the needs of manufacture Therefore, and consumption on the limited basis of this research, what the author is concerned about is import activities Like export activities, they also play an important role in international benefits that importing advantages creates It can not be denied some necessary A country can make use of comparative in producing goods at home by bringing in modern and advanced technology, domestic integration which market implementing helps become develop the economy healthier economic industrialization More Importing importantly, and modernization Practically, no countries can develop in an independent in addition, some countries others are insufficient, are abundant also makes it supports In process manner from others; in some kinds of sources while so each country has to exchange or import what they are in need In case of Viet Nam, a developing country, importing should be taken into considera tion so as to industrialize and modernize the country It is Page Prepared by Nguyen Kim Hong Ngoc necessary for a company to grasp importing procedures as well as overcome obstacles It is at Sea Product Import Export Trading Company intership on import activities I also have opportunities where I have an to know more about import regulations as well as practical process of its contract performance Research paper objectives The purpose of this study is to analyze import activities at SIMEXTRACO and to evaluate its import performance Basing on such evaluation, the author would like to point out its weak and strong points so as to give some recommendations on its import operation, fierce competition upon Vietnam's especially under the pressure of entry in the World Trade Organization Scope of research This study limitedly concentrates on analyzing information about import activities, process of conducting an import contract and gives some comments to improve the import situation at SIMEXTRACO Research methodology The collected data are mainly secondary sources available The author utilizes information on the Internet, newspapers, magazines, Vietnamese and English books, especially sources from SIMEXTRACO Contents of the research This study consists of 04 chapters The first Chapter shows an introduction about SIMEXTRACO'S profile which mainly states its foundation, scope of Page Prepared by Nguyen Kim Hong Ngoc - operation, structure of the organization and business operation situation Next, in Chapter the author presents an overview of importing It is followed by Chapter in which SIMEXTRACO'S import activities such as import markets and products The process of conducting an import contract at SIMEXTRACO will be dealt with in details in Chapter The study will come to an end with a conclusion and performance about import suggestions with the purpose of improving business growth on course This research provides necessary information and useful assistance to forward trading SIMEXTRACO in international economic integration period Page activities of [ Prepared by Nguyen Kim Hong Ngoc REFERENCES Pinnells, J R 1994 Exporting and the export contract Prodex ICC 2000 IncOlerms 2000 ICC Publishing S.A I Vu Huu IUu Foreign Trade techniques Education Publishing House 2002 Doan Thi Hong Van Foreign Trade techniques Statistics Publishing I House 2002 Ha Thi Ngoc Oanh, International Trade Techniques Statistics Publishing House, 2002 Va ThJnh Thu International Economic Relation Statistics Publishing I House Q003 Joining WTO, Vietnam's consistent choice, Vietnamese versIOn National Political Publishing House, 2004 ICC IJternational Practices for uc Society I Quarter I, 2006 DocumJnts from SIMEXTRACO Website: WWW.customs.gov.vn I www.ven.arg.vn Page 86 and Labor Publishing House, GiAY DE NGHI MUA NGOAI TE (KLEM L~NH THANH TOAN TIEN MUA NGOAiT~) Kinh gdi: BAN GIAM DOC NGAN HANG NGOi}.ITHUONG VIitT NAM CN TPHCM / Ten don vi: CTY KD XNK THUY SAN ( SIMEXTRACO) Bja chi: 21- 23 H6 Tung M~u, Q 1, TPHCM BT: 8293486 S6 tai khml.n VND: 007-100-0336552 T'.li NH: Vietcombank S6 tai khml.n ngo'.li tf: 007-037-0006501 T'.li NH: Vietcombank S6 ngoai te: 346 500 JPY Muc dich mua ngoai te: (G'.lch.c.heo x van thich hQp) OTra nQVietcombank HCM HBTD s6: OThanh toan LlC s6: OThanh toan ti~n hang da nh~n TTR theo HB: OKy quy md LlC s6: liB s6 230106 OThanh toan nhO thu s6: OM\lc dich khac: S6 ngoai tehien c6 tai khoan clla chUng toi: 007.137 (362) 007.137 02( 381) 007.037.000 (383940) 007.037 (383210) B~ nghi trich tai khoan VND c1ia chung toi: 007- 1000- 336552 T'.li VCB.HCM s6 ti~n VND tuong ling voi s6 ngoai t~ ban cho chUng t6i B~ nghi chuy@n s6 ngo'.li t~ d6 van t~i khoan clla SIMEXTRACO S6: 007-037-0006501 Cam ke't: - Khi mlia"~go'.li t~ d@d~t CQC hay toan truoc ti~n hang: chUng t6i cam ke't se xuit trlnh to khai hili quan nMp kh~u hang hoa sau nMn hang ( ban chinh va photo).- Chu~g Wi cam ke't sit dung s6 -ngo'.li t~ mua clla Quy Ngan Hang ban theo dung phap 1u~t va quy dinh clla Chinh phll v~ quan 1y ngo'.li h6i ~', ? KE TOAN TRUONG Ngay thang nam 2006 GIAMDOC Phan danh cho Ngan Hang Ngo:;ti Thuong TP HCM Ngay thang nam 2006 Phong Kinh doanh Ngo'.li T~ mAM BOC CQNG HOA xA HQI CHU NGHIA VI~T NAM Doc l~p - TV - H~nh phuc GL'\ YDE NGHl1\1- 'C L: '"~ "E ~ ~ •• JAPAN CFS ~•• VIETNAM '3 u t: ~EAPRODUCT IMP~RT EXPORT : TRIXDINq ,eOMPANY ( SIMEXTRACO ) :",,' 21-23,HO TUNG MAU ST., DIST I, ~.;;:-':: HOCHIMINH CITY, VIETNAM ' ,.' LlC NO : 001341 ig.o600542-DATED/FEB 10",2006 PACKING -:'EXPO,RT: STANDA,RDPACKING ' :it.,;'.".,.•",,':':i', ,,: ,•.• '.;-'(;',\'."".'" / • :.; : • :., ,(1 : a: Quantity • ;, 1,000 KGS :; ' ".: 10 certification" The' undersigned hereby~certifies,' other' sUPPorti'1g documents, that the above-mentioned goods ociginate inthe country shewn 'In.box to the best of its knowiedge and belief .' , ':., "".;h< Tokyo Chamber ~f commerc~ & 'Induslr)' [j:~~~i~jjii~~' tt~~:;(:,:~;.,•.• :• ., \ : Cr\I:II ~ ••••• lld h.ave txen P'1~b!c '""Jet the fire 01" oth=: ~ poUcy at poIk' u ll.-1 thU 11_ h":>llCc ItO( t"CCI "'*" p,lnl :! 'lor ""'" or t;j :lic;c to Ibis louwl'tVlCO':; t::s ~ Q.L~ •-~f the of 00 ~ ~ a:ld bUd lb=::ueIYt:I to tbn Auur- d }:.is 01" ~ Eaoeu' oa, Ad:rli:Wlnlon, or AJ.sip1, for :be ::\le l'afur;nacc:t:! of the ~ ca:.rn.sZccIbecccIYt:l ;UJ ~ ~ lll lI:Lltl :bc::l fer ~ W'!lsor damaF I=unnce CIOcL lm sbll ~ pbJ ••.•• bcc-n P-'- la] I:e t-!d for Ih: said '\Iaod i:sI Ibis '11.11'~ 10 pm;«: