report import export management thai huy medical equipment joint stock company

6 CHAPTER II: IMPORTING ACTIVITIES OF THAI HUY MEDICAL EQUIPTMENT JOIN STOCK COMPANY .... General information of company Thai Huy Medical Equipment Joint Stock Company was founded in 201

INTERNATIONAL UNIVERSITY VNU HCMC

School of Industrial Engineering and Management

Tran Thi Khanh Huyen IELSIU20317

4 The main products 6

CHAPTER II: IMPORTING ACTIVITIES OF THAI HUY MEDICAL EQUIPTMENT JOIN STOCK COMPANY 6

1 The main import market 6

2 The import consumer market 7

3 The steps of importing products 8

3.1 Negotiation and sign contract 8

3.9 Sale contracts of product, retail invoice 17

3.10 Custom declaration (Import) form 17

CHAPTER III: METHODOLOGY 19

1 Importing situation 20

1.1 Opportunities 20

1.2 Challenges 21

2 Method 21

2.1 Strength and weakness analysis 22

2.2 Pros and Cons analysis 22

CHAPTER IV: SOLUTION AND RECOMMENDATION 23

1 Solution 23 2 Recommendation 25

CHAPTER I: INTRODUCTION

1 General information of company

Thai Huy Medical Equipment Joint Stock Company was founded in 2015 and had its headquarters located in Ho Chi Minh City Thai Huy Medical Equipment JSC is an enterprise that specializes in importing medical equipment from foreign countries and trading domestically

- Headquarter: 50 Nguyen Huu Canh, Binh Thanh District, Ho Chi Minh City

Figure 1 : FRAMEWORK OF ORGANIZATION

3 Resources of company

3.1 Human Resources

The total number of staff is 31, including:

3 staff from the Accounting and Finance Department, 6 staff from the Logistics Department, 8 staff from the Sale and Marketing Department, 5 staff from the Technical Department, and 3 staff from the Human Resources Department All of them have a prominent level of professional knowledge, moreover, those technical engineers are also well trained in specialty of medical engineering by the co-ordinate producing agencies such as Ultrasonic - Canada, Fanem - Brazil, ERBA - Germany, BMI - Italy, Elektronika - Hungary

3.2 Finance Resources

At the beginning of its establishment, Thai Huy Medical Equipment JSC was formed with a total starting capital is 9.050.000.000 VND, with:

Total fixed assets: 1.030.000.000 VND

The floating capital: 8.753.700.000 VND

The supplementary budget: 2.350.432.000 VND

It is reported that the general finance resources have been added annually by revenue from business activities, especially by the floating capital of the company

4 The main products

As a company specializing in medical instruments, Thai Huy Medical Equipment JSC concentrate in importing activities of products with a vast number and diversified models They are separated into three main groups of imported products:

a Machines and equipment

Some machines that support patient9s health such as Resuscitator, Life support, Blood pressure monitor, etc Additionally, there are several devices for diagnostic imaging as well as other equipment like gurneys, ambulances, operating tables, etc

b Tools

The tools are with a view to surgery such as: Scalpel, forceps, lancet, probe, speculum, stethoscope, syringe and more or some single-use products like cotton balls or compression bandage

CHAPTER II: IMPORTING ACTIVITIES OF THAI HUY MEDICAL EQUIPTMENT JOIN STOCK COMPANY

1 The main import market

Import markets approach companies specializing in medical equipment and international aid organizations such as UNICEF, JICA Besides, with a view to getting a source of goods to meet more needs for products ofdomestic medical equipment, the company has constantly researched to expand the provider market At the same time, the company also maintains business relationships along with the long-term cooperation among famous brands around the world for medical equipment such as: AGFA firm (a supplier of X-ray film and X-ray machine), Toyota company (providing all kinds of ambulance cars) …

2 The import consumer market

Because of the country's economic development and expanding need for proper medical treatment and equipment, Vietnam's medical device industry is one of the most attractive industries for international investment As most medical equipment in Vietnam is imported from overseas multinational corporations, the medical device business is one of the most potential subsectors for foreign investment in the healthcare sector

More precisely, Vietnam's shortage of low-cost generic pharmaceuticals, along with the country's inability to fulfill local needs for medical device manufacture and innovation, has created favorable conditions for foreign businesses to dominate the Vietnamese medical device sector

Due to the great complexity and rapid growth of the industry, THC Medical Equipment should consider the following factors in order to successfully enter the market First, we need to enter indirectly through an agent or distributor, the private clinic or private hospital is the place that we must concentrate on After a few years in the market, we can build a strong relationship and partnership with domestic companies to gain a comprehensive understanding Finally, we will aim to build a relationship with the government ministries, regulatory agencies, and national healthcare institutions to become a leader of the medical equipment market

3 The steps of importing products

3.1 Negotiation and sign contract

First, we need to negotiate the price and terms of shipping with the sellers to find the most suitable price and method for the product to be shipped to Ho Chi Minh City As we buy the X-ray machine from AGFA Medical, we need to understand the difficulty in booking the slot on the vessel or the delay that could happen with our shipment from Belgium to Ho Chi Minh City Therefore, we must negotiate to reduce the purchase price due to the increase in shipping price

3.2 Commercial invoice

A commercial invoice is a part of an import and export documentation that serves as the legal evidence of sale transaction It is issued by the exporter and contains information such as the description of goods, the value of goods, and shipper information

Here is THC Medical Equipment JSC9s sample Commercial Invoice We have the information of buyer, information of vessel, port of loading and discharge as well as the total value of the shipment Moreover, it contains the payment term with specific note, and the incoterm of the shipment

Figure 2 : COMMERCIAL INVOICE SAMPLE

3.3 Packing list

Packing list is a document used in international trade and it gives the exporter, international freight forwarder, and the consignee with information about the shipment including its

dimension, and weight of each package, and the marks and code that are noted outside the boxes

Figure 3 : PACKING LIST SAMPLE

The reason that the packing list is significantly important is it serves as proof of the Bill of Lading (B/L) and indicates the information required for the Certificate of Origin (C/O) Packing List is important for our company because it serves as the supporting document for reimbursement under the letter of credit which is the payment term of our order

3.4 Bill of lading

Bill of Lading is the document issued by the carrier to a shipper that declares specifically the types, quantity, and destination of the goods being carried It is also considered a

shipment receipt when the shipper delivers the goods at a predetermined destination This document must accompany the shipped products and must be signed by an authorized representative of a carrier, shipper and receiver

Figure 4 : BILL OF LADING SAMPLE

The importance of the Bill of Lading is the legally binding document that provides Maersk Line with all the necessary information surrounding the product in order to accurately process a shipment Essentially, a Bill of Lading works as undisputed proof of shipment

3.5 Booking confirmation

The booking confirmation is the document that is issued by the carrier or freight forwarder to the shipper, confirming all details of the booking you have made, except for the actual cost of the transportation The booking confirmation is acted as documentation for the booking as well as sharing between shipper, consignee and other relevant parties as easy reference of the booking details includes details of the freight forwarder, the shipper, the consignee, transportation service, any additional service, timing, and cargo details

For our company9s importing process, at the beginning, the person responsible for import will contact the shipper, which is AGFA Corporate, we all typically agree on a sailing date and the carrier choice before a booking confirmation is issued by the carrier which is Maersk Line

Here is a sample of Booking Confirmation between AGFA Corporate and our company which is made by Maersk Line

Figure 5 : BOOKING CONFIRMATION SAMPLE

3.6 Container tracking

A container Tracking System allows you to know where your sea cargo is in the world and gives you the port details You can track the current location of the container anytime To track a container location, you need to specify the container number/Bill of lading/Booking number and the shipping line

In this case, our company still utilizes the container tracking system of Maersk because tracking container with the biggest international shipping company like Maersk Line, which is the global containerized division of the consortium A.P Moller – Maersk Group, is devoted to providing the highest level of customer-focused and secure ocean transportation services for containers

Figure 6 : CONTAINER TRACKING RESULT SAMPLE

3.8 Certificate of origin

A Certificate of Origin (CO) is an important international trade document that certifies that goods in a particular export shipment are obtained, produced, manufactured, or processed in a particular country They declare the 8nationality9 of the product and serve as a declaration by the exporter to satisfy customs or trade requirements

Customs, banks, private parties, and importers all request COs (Certificate of Origin) for several reasons Almost every country in the globe requires CO for customs clearance operations, such as calculating the tariff that will be assessed on the products or, in certain situations, determining whether the commodities may be legally imported at all

There are two types of COs that chambers can issue:

• Non-Preferred COs certify that the commodities have not received preferred treatment These are the most common COs issued by chambers and are also known as "Normal COs."

• Preferential COs certify that goods will be subject to lower taxes or exemptions when exported to countries that offer these benefits These COs are frequently linked to Regional Trade Agreements

For our company, the procedure of importing medical instruments adopted C/O form EUR followed by the European Union–Vietnam Free Trade Agreement (EVFTA):

Figure 7 : CO FORM EUR SAMPLE

3.9 Sale contracts of product, retail invoice

Following the conclusion of the negotiations, our board approved a sales contract with the AGFA Healthcare representative Our contract is written in both Vietnamese and English, and it contains 12 articles about product conditions, payment methods, warranty, and damage conditions, dispute resolution, and so on

Attached below is the Appendix of the Sales Contract signed by the representative of AGFA Healthcare and the Head of Logistics Department of THC Medical Equipment JSC

Figure 8 : SALE CONTRACT SAMPLE

3.10 Custom declaration (Import) form

The final step of the importing activities is to issue the Customs declaration form The Import Customs Declaration Form is indeed one of the components of the detailed customs

valuation for imported products subject to duties and taxes that must be attached to the detailed Customs Declaration Form each time the declaration is made

The customs declaration form must be completed in accordance with the General Department of Customs' instructions Customs declarations are classified into two types: manual declarations and electronic declarations

Having to fill out the customs declaration form and submitting documents: The company receives a customs declaration and declares the import goods in detail, including quality, volume, worth, home country, type of products, code to calculate import and export tax

While filling out the customs declaration form, there are several notes that need to be reminded of:

• State the type of products, its quality in an accurate and precise way, and use the appropriate code to calculate import and export taxes

• Assemble all the relevant documents in advance and in accordance with the requirements for customs

• Pay all the taxes on time

• Immediately after the end of the customs declaration, the company will submit a proclamation to the customs office along with the relevant paperwork to exemplify the validity of the shipment

Attached below is our custom declaration form:

CHAPTER III: METHODOLOGY

Moreover, in 2019 The European Union and Vietnam signed a Trade Agreement and an Investment Protection Agreement, leading to the elimination of 99 percent of all tariffs and a variety of important superiorities for the import segment This agreement has reduced the cost of equipment as it is imported to the internal market, resulting in an increase in the company9s net revenue In addition, the procedure of transit and exchange of relevant documents like Certificate of Origin is much more simplified, broadening the opportunities of trading products with other European countries and territories especially as the origin of the major importing medical equipment of our company is in Europe

As far as the research of the healthcare institutes, the outbreak of Covid 19 has exclusively caused the increasing demand for high-quality healthcare and the urgency of these facilities such as patient monitors and pulse oximeters, medical protective clothing, and other medical headwear This situation offers tremendous opportunities for our company, resulting in the company9s financial report for the period from 2020 to 2021 It is denoted that the net revenue has increased by 25% compared to itself in the previous year Additionally, the long-term cooperation relationship with foreign medical device suppliers and domestic clients is increasingly close-knit, also the source of potential customers is supplemental with a vast number of domestic clients like local private hospitals and research and educational institutions

1.2 Challenges

Most imports come from Japan, Germany, the USA, China, and Singapore, totaling over US$500 million in 2019 The medical device market was valued at US$1.4 billion in 2019, making Vietnam the ninth largest medical device market in the Asia-Pacific region Thus, there are a lot of businesses specializing in healthcare devices as the turnover in this industry is enormous The competition among these companies is extremely cutthroat, especially compared with large-scale enterprises having seniority in the import segment, leading to difficulty in trading in the national market with an appropriate price without the loss of earnings but the guaranteed quality

Furthermore, Thai Huy Medical Equipment JSC is a quite young company with more than 7-year experience approaching and penetrating healthcare devices market, however, the company9s target market is local private hospitals and research and educational institutions meanwhile 84 percent of the market is local government hospitals which are the largest purchaser of medical devices Thus, our target market, although it shows the strongest demand, its scale is still extremely limited compared to the enormous general market

Covid-19 pandemic causes activities of import and export in front of huge difficulties.This problem could lead to the delay and interruptions in the shipment and importation of TH company The import process is hampered not only by the pandemic, but also by domestic transportation and the preservation of product quality during transport and import The main products of TH Company are clinical facilities, which are fragile and sensitive to outside effects like collision or meteorological conditions For example, if these modern oversize and overweight equipment like patient monitors and pulse oximeters devices are stuck in the ocean or the seaport too long, be exposed to the salty and humidity condition, they are likely to be broken down, causing the loss of a lot of money

2 Method