Internship report - Import-export practices at europlast jsc

Since the issuance of new policies on diplomacy and economy of Vietnamese government in 1986, namely Doi Moi era, Vietnam has set up its business relationship with most countries in the world, even with former millitary opponents such as the United States or Japan. Every year, exportation contributes billions of dollars to the GDP of Vietnam. In general, our main exports consist of most agricultural products such as rice, coffee, pepper, etc. and raw natural resources such as crude oil and ores, as well as shoes, clothing and handicraft products, all of which are very low value-added. Meanwhile, we import manufactured goods and luxuries like car, branded clothing, alcohol, which has made Vietnam suffer a trade deficit for a long time. In order to improve the balance of trade, the government has encourage Vietnamese enterprises to shift from processing goods to order of foreign companies to producing high value-added products for exportation.

1 General information and history of development of EuroPlast 4

1.1 General information of Europlast 4

1.2 Developing history of EuroplastHistry 5

1.3 Managerial Structure 6

1.4 Strategic products 6

1.4.1 Filler Master Batch 6

1.4.2 Filler Master Batch 7

1.4.3 White Master Batch 7

1.4.4 Color Master Batch 8

1.5 Markets 9

1.5.1 Domestic market 9

1.5.2 Exporting market 9

2 Import – export practices at Europlast Jsc 9

2.1 Terminology & Definition 9

2.2 Importing practices at Europlast 10

2.2.1 Steps in importing process 10

2.2.2 Supplier evaluation 12

2.2.3 Steps in clearing importing procedure 13

2.3 Exporting practices at Europlast 14

2.4 Evaluation on import-export practices of Europlast 16

2.4.1 Strength 17

2.4.2 Weakness 18

2.5 Comparison with theory 18

3 Suggestion offered to improve the efficiency of Europlast in international trade 18

3.1 Future goals and Development orientation 18

3.2 Suggestions 19

3.2.1 Improve quality of human resource 19

3.2.2 Selecting and negotiating suitable import/export contract conditions 20

Conclusion 21

Reference 22

Since the issuance of new policies on diplomacy and economy of Vietnamesegovernment in 1986, namely Doi Moi era, Vietnam has set up its business relationshipwith most countries in the world, even with former millitary opponents such as theUnited States or Japan Every year, exportation contributes billions of dollars to theGDP of Vietnam In general, our main exports consist of most agricultural productssuch as rice, coffee, pepper, etc and raw natural resources such as crude oil and ores,

as well as shoes, clothing and handicraft products, all of which are very low added Meanwhile, we import manufactured goods and luxuries like car, brandedclothing, alcohol, which has made Vietnam suffer a trade deficit for a long time Inorder to improve the balance of trade, the government has encourage Vietnameseenterprises to shift from processing goods to order of foreign companies to producinghigh value-added products for exportation

value-According to the schedule of Foreign Trade University, I spent a five-weekinternship at Europlast Joint Stock Company, which majors in importing raw materialand manufacturing polymer and plastic products for domestic consumption as well asexportation Under the training of my direct instructor, Ms Pham Thi Ngoc Mai, aswell as the condescention of the company’s staff, I have been given a great opportunity

to apply my academic knowledge to practical problems and compare with the theories Ihave learned at the university Based on my background knowledge and the experience

I gained during my intership, I decide to choose the topic for this report as: export practices at Europlast Jsc”.

“Import-The report consits of three separate parts:

Chapter 1: General information about business practices of Europlast Jsc.,

Chapter 2: Import – export practices at Europlast Jsc.,

Chapter 3: Suggestions offered to enhance the efficiency of Europlast Jsc., in international trade

Due to my limitation of knowledge, skills and experience, mistakes and faults areinevitable I welcome all comments, advices and suggestions that help me improve thequality of the report

Finally, I would like to express my gratitude to my instructors and Europlast stafffor helping me complete my mid-course internship

Ha Noi, July 18th, 2013Lương Kim Anh

1 General information and history of development of EuroPlast

Company: EuroPlast Jsc

Type: Joint stock companyYears active: 2007- presentTrading Office: N11, Block 1A.1.2 - N02, My Dinh 1 UrbanArea, Tu Liem District, Hanoi, Vietnam

Industry: Plastic & PolymerProducts: Master batch and additivesWebsite: http://www.europlast.com.vn

1.1 General information of Europlast

Founded in 2007 in Hanoi, EuroPlast Joint Stock Company is an expertise inpolymer industry and mineral resources (Talc production) Its primary products areFiller Master Batch, Color Master Batch and Additive Master Batch As one of themain producers in Vietnam polymer market, Europlast has expanded equally itsactivity to exportation The company exports over 60% of its turnovers to more than 20countries in the world

Its strategic goal is to develop tailor-made solutions and technically advancedmaster batches and compounds for the polymer industry by using an exclusive advanceplastic solution We offer a comprehensive sampling service with excellent laboratoryand technical service back-up.

Focus in modern technology, high quality product and in respect of the bestservice for customers, Europlast will continue to provide innovative solutions, enableresponding to every demand of global market

1.2 Developing history of Europlast Histry

The relative young history of EuroPlast is a story of success The long-termexperience of its expertise in polymer's production have been, together with multipleinternational relations, the relevant starting capical

o Establishment of new branch in Ho CHi Minh city, in the south of Vietnam

o Establishment of Trading Office in the center of Hanoi

o Establishment of new branch in Nghe An Province

o Construction of the second factory in Nghe An, 3 hectare square total area.

o Year of exportation - The company export its product to more than 20 countries

in the world

2012

o Expansion of the factory in Ha Nam, new building of 3000 m2 with modern andquality equipment

o Total capacity of EuroPlast reaches 6000 MT/month for 14 production lines

o Purchase Talc mine in Tafu, north part of Vietnam: 99 hectare square total area

o Purchase Talc mine in Phu Tho: 44 hectare square total area

o The company has actually 260 employees for 40.000 MT product sales/ year

1.3 Managerial Structure

Chart 1: Managerial structure of Europlast

(Source: Europlast human resource department)

1.4 Strategic products

Board of directors

General Director

Board of controllers

- Quality consultant

- Local market

- onal market

Internati Trading support

- Purchasing

1.4.1 Filler Master Batch

Filler Master Batch is compounded of high quality filler, polymer resin andother additive agents by twin-screw machine It is widely used in the plastic industry(blow film, blow molding, injection molding, wire drawing, bag molding, slip casting,dyeing, extrusion molding) to reduce the production cost and improve the character offinal products

EuroPlast’s Filler Master Batch is produced in a highly respective environment,with high quality process and selective raw materials

Application: (PE)

-Transparent film

- Injection/ extrusion

- Opaque film

- Extrusion coating film

1.4.2 Filler Master Batches

Filler Master Batches is compounded of high quality filler, polymer resin andother additive agents by twin-screw machine It is widely used in the plastic industry(blow film, blow molding, injection molding, wire drawing, bag molding, slip casting,dyeing, extrusion molding) to reduce the production cost and improve the character offinal products Europlast's Filler Master Batch is a combination of calcium carbonate,plastic flexibilizer and other special additives It has good dispersion andenvironmental protection, which can improve the surface antifriction, heat stability,toughness, hardness, rigidity and increase specific gravity of plastic products

White Master Batch is a type of polymer materials, it gives whiteness,brightness and opacity in the final product To provide these properties in platics, manychemicals such as Zinc Oxide, Zinc sulphide, Antimony oxide, Titanium dioxide areused Titanium dioxide is mostly used in plastic application because of its uniqueproperties such as high refractive index, average particle size (0.19-0.22 micron).

EuroPlast’s White Master Batches are based on international quality Titaniumdioxidewith excellent optical properties such as opacifying/tinting strength, undertone,and color This Titanium dioxide has a unique surface treatment which gives gooddispersion in plastics and also has no effect on rheological properties of the polymer.White Master Batch contain speciality additives which makes the resin compatible withtitanium pigment and give an ideal color for final product Europlast has a lot ofvarieties of White master batches, depending on the percentage of Titaniumdioxide (up to 70%)

Application:

- Film for complex printing

- Film for the application of packaging

- Film for the application in Se Food and Agriculture Industry

- Injection and blowing mold

1.4.4 Color Master Batch tch

Color Master Batch is a type of polymer materials dedicated colorants,pigments, also know as preparation of materials (Pigment Preparation) It consists ofpigments or dyes, and additives vector composed of three basic elements, is theextraordinary amont of pigment or dye evenly attached to the resin contained in theaggregate have been, can be said to concentrate pigment (Pigment Concentration), soshading power than his own pigments

Main Color: black, blue, brown, green, grey, orange, red, violet, yellow

Application:

- Injection molding

- Blowing film

1.5 Markets

1.5.1 Domestic market

40% turnover of EuroPlast comes from local market Its products present

in every part of the country throughout the present of representative offices and

distributor link:

- North: Head Office in Ha Nam, factory in Ha Nam, talc mine in Ta Phu, Bac Giang, talc mine in Phu Tho, office Representative in Hanoi

- Centre: Branch in Nghe An, factory in Nghe An

- South: Branch in Ho Chi Minh City

At this moment, the company has more than 80 loyalty customers working inpackaging and plastic manufacturing industry that produce water pipes, wires,sheath conditioning, appliances…

Europlast’s main markets include:

Hanoi Hai Duong Ha Nam Hung Yen Hai Phong

Phu Tho Bac Giang Nghe An Da Nang Quang Ngai

TP HCM Binh Duong Dong Nai Can Tho Long An

1.5.2 Exporting market

At the moment, EuroPlast have more than 40 loyal export customers ininternational market including:

- Asia: China, Pakistan, India, Japan, Sri Lanka, Indonesia

- Europe: Russian, France, Poland, Italy

- Africa: Camaroon, Algeria, Tunisia, Egypt

- America: Brezil, Chile, Argentina, Ecuador

- Australia

2 Import – export practices at Europlast Jsc.

2.1 Terminology & Definition

- Purchase Order(P/O)

- Commercial Invoice: the request from the Seller to the Buyer asking for the

amount of money as stated in the invoice Commercial Invoice should specify theproperties of the Good, unit price, total amount, delivery terms and condition, mode

of delivery and mode of payment

- Packing list: the list of all the goods packed in a consignment

- Bill of lading: a certificate issued by the Carrier for the Consignor to verify that the

Good has been shipped

- Certificate of Origin (C/O)

- Delivery order (D/O)

2.2 Importing practices at Europlast

2.2.1 Steps in importing process

Responsible

Contact, send enquiry Find supplier

List of suppliers

Table 1: Importing process at Europlast

(Source: Europlast’s trading department)

Europlast has establish business relationship with both foreign and localpartners The company purchases raw material and sells manufactured products tocustomers Raw material is bought from a variety of suppliers which provide the bestproducts at reasonable price regardless their geographic situation Therefore, Europlasthas two different purchasing processes for domestic and imported goods, of which thelatter is much more complicated as it requires a number of procedures and bears morerisks and cost In this chapter, I mainly discuss the importing process at Europlast

The importing process generally consists of 6 steps:

Step 1: After receiving purchasing demand from some department, choosing a supplierand getting the approval of the general director for the supplier, the purchasingdepartment will send an enquiry to the supplier

Purchase

Make payment/ Terminate

the contract

Save files

Approve & Sign

Contract/ Order

Step 2: After some negotiation on price, quantity, quality & specification, terms andconditions of delivery and payment etc., the two parties will make a contract In case

of long-term suppliers, the general director will sign a ruling contract and send separateorders with signature of head of department for each consignment Other suppliers willsign contract for each separate business

Step 3: When the contract has been sign or the order has been sent, personnel in chargewill carry out the purchase and prepare all necessary documents Europlast usuallychoose FOB term imports Therefore, it will send someone to arrange insurance andcontact the vessel office for shipment

Step 4: When the good has been delivered, representatives of related departments andthe suppliers will check, install and test (if needed) together If the good is up toEuroplast’s standard, they will accept it Otherwise, they will ask the supplier toreplace it

Step 5: Related files and documents will be transferred to Accounting Department orthe department in charge of making payment and terminating the contract

Step 6: Related department must save files

2.2.2 Supplier evaluation

- Evaluation for choosing potential evaluation: This type of evaluation is only

applied for new suppliers that have not been approved When a department needs topurchase something, it will make an application form approved by the general director

or head of department and submit to the responsible department Then the responsibledepartment will send someone to collect the price quotes of at least 3 suppliers andevaluate them using Form BM.08.01 Head of department is responsible for checkingthe evaluation and submit to the General director for approval After the generaldirector has approved, personnel in charge will update the information of the newsupplier in the list of approved suppliers (BM.08.01)

In case of demand arising at the turn of event, the personnel in charge candirectly consult the general director to appoint a specific supplier to ensure promptpreparation of material for production.

- Tracking evaluation: Each department in Europlast will open a “ Supplier tracking

book” according to form BM.08.02 During the purchasing process, if any problem intechnical standard, quality, price, time of delivery, terms and conditions arise, it will berecorded by the personnel in charge The evaluation of the supplier will be based onthis tracking book Head of related departments can remove suppliers from theapproved list depending on the evaluation standards Head of departments will carry outthe tracking evaluation annually or when required to build a list of liable suppliers for theirdepartments Revaluating standards include number of times of nonconforming, seriousness ofnonconforming, frequency of reoccurence, etc

Initiate supplier evaluation form BM.08.01

Table 2: List of related forms

(Source: Europlast’s trading department)

2.2.3 Steps in clearing importing procedure

Step 1: Europlast personne prepares a set of import clearance documents including:contract, commercial Invoice, Packing List, Bill of Lading, Certificate of origin,Importing Permission Europlast personnel has to check the correctness and legality ofthe documents before submitting them to custom Any problem arising should bepromptly informed to the Seller to fix it at least cost and risk

Step 2: Upon receipt of B/L or arrival notice, Europlast personnel will contact theshipping office to get delivery order (D/O) in 4 copies