International Marketing plan of exporting casumina tire to Peru

International Marketing Plan of exporting Tire of Caosumina Co., LTD to Peru giới thiệu chung về nền công nghiệp săm lốp của Peru, Việt Nam. Ngoài ra, tài liệu này minh họa các bước cách lập một dự án Marketing Quốc tế cũng như cách nghiên cứu đánh giá thị trường thông qua SWOT, Porter 5 forces. CHAPTER I: CASUMINA’S BRIEFT INTRODUCTION CHAPTER II: PERVIAN BUSINESS ENVIRONMENT ANALYSIS

CHAPTER I: CASUMINA’S BRIEFT INTRODUCTION

I.1 THE INTRODUCTION TO CASUMINA JOINT STOCK COMPANY

I.1.1 THE OVERVIEW

- Name: The Southern Rubber Industry Joint Stock

- Abbreviate: CASUMINA

- Headquarters: 180 Nguyen Thi Minh Khai, Distreet 3, Ho Chi Minh city

- Charter capital: 422.498.370.000

- Mission Casumina: Dedication to social security, happiness, efficient and friendly

- Vision Casumina: Leading tire manufacturers in Southeast Asia

I.1.2 BRIEFT HISTORY OF FOUDATION AND DEVELOPMENT PROGRESS

- 1976 - Company Southern Rubber Industry was established on 19.04.1976 by the State of

Vietnam

- 1997 - Establishment of Joint Venture Yokohama Tire Vietnam with partners: Yokohama

and Mitsuibishi Japan to manufacture automobile tires and motorcycle

- 1999 - Investing in a factory specializing in the production truck tires with modern

technology - The company received ISO 9002-1994

- 2000 - The company received product certification motorcycle tires standard JIS K6366

Japan / JIS K6367

- 2001 - The company received ISO 9001 - 2000

- 2002 - Company received product certification standard car tire Japan JIS K4230 2003 -

Manufacture of radial car tire V13, V14 Certificate ISO 14001-2000 2005 - Manufacture of radial car tire V15, V16 - CASUMINA contracting co-produced light truck tires with the company CONTINENTAL Germany (4th corporate world to produce the kind of car tires) - On 10/10/2005 Change of Corporation Southern Rubber Industry under Decision No 3240 / QD-BCN of the Ministry of Industry

- 2006 - Casumina officially put into operation with the initial charter capital of 90 billion

11/2006 increase its charter capital to VND 120 billion

- 2007 - 59/75 CASUMINA was ranked the largest tire manufacturers in the world 03/2007

increase its charter capital to VND 150 billion - Certifies Business prestigious 2007

- 2008 - Signed contract with Philips Carbon Black.LTD joint venture to produce carbon

black - Increased capital to VND 200 billion

- 2009 - Increased capital to VND 250 billion - May 08/2009, the company officially listed

25,000,000 shares on the HCM City Stock Exchange, stock code CSM

- 2009 to present: Signed contracts for technology transfer company Gaoce Qingdao - China;

signed a business cooperation contract with JSC strategic investment advice and build Ba Dinh; increased capital to 422,498,370 thousand dollars

I.2 BUSINESS FIELD AND ORGANIZATION STRUCTURE

- Production and sales of industrial rubber products, rubber consumption

- Trading, import and export of raw materials, chemicals, equipment and rubber industry

- Services Commercial Business

- Trading in real estate

- Other business sectors in accordance with the provisions of law

I.3 PRODUCTS

- Car Tires:

Over 120 kinds, including gong tires sold Radial full steel and steel tires, these are two types of products helps companies drift into a leading manufacturer of automotive tires and tubes light trucks in Vietnam

Casumina is the first enterprise in Vietnam to develop this product

- Motorcycle tires

Tires motorcycle, scooter: 200 different products specifications, size,

early 1009 the company has added product lines far scooter tires

E-Mart

- Industrial tires

- Agricultural tires

- Bicycle tires: 80 types, the traditional products of the company

Casumina The company has a policy to reduce the bicycle tire to focus on

products with higher value

- Other products: in addition, the company also manufactures a number of

of water, oil, gas in the car), gloves, However, the

proportion of these products contribute very little in

revenue

I.4 BUSINESS RESULTS

- 4/2011 received the "Medal 3rd Independence" by the Party and State awarded

- Rating 59/75 tires manufacturer in the world

- The "Export prestigious" 2008-2011

- As one of the 11 major product of Ho Chi Minh City

- 6 years hold the GOLD STAR VIETNAM 2002-2007

- The title "Hero of Labour in the reform era" in 2005

- As one of the 200 largest enterprises in Vietnam

CHAPTER II: PERVIAN BUSINESS ENVIRONMENT ANALYSIS

II.1 MARCO-ENVIRONMENT ANALYSIS

II.1.3 DEMOGRAPHIC ENVIRONMENT

- Population: 30,147,935 (July 2014 est.)

- Median age: total: 27 years

male: 26.3 years

female: 27.7 years (2014 est.)

- Population growth rate: 0.99% (2014 est.)

- Birth rate: 18.57 births/1,000 population (2014 est.)

- Death rate: 5.99 deaths/1,000 population (2014 est.)

- Net migration rate: -2.69 migrant(s)/1,000 population (2014 est.)

- Urbanization: urban population: 77.3% of total population (2011)

Infant mortality rate: total: 20.21 deaths/1,000 live births

- Life expectancy at birth: total population: 73.23 years

- Major cities - population: LIMA (capital) 9.13 million; Arequipa 804,000 (2011)

- Languages: Spanish (official) 84.1%, Quechua (official) 13%, Aymara (official) 1.7%,

Ashaninka 0.3%, other native languages (includes a large number of minor Amazonian languages) 0.7%, other (includes foreign languages and sign language) 0.2% (2007 est.)

- Ethnic groups: Amerindian 45%, mestizo (mixed Amerindian and white) 37%, white 15%,

black, Japanese, Chinese, and other 3%

- Religions: Roman Catholic 81.3%, Evangelical 12.5%, other 3.3%, none 2.9% (2007 est.)

of GDP However, the country still has a long way to go toward the modernization and competitiveness of its service sectors Industry, which represents around 35% of GDP, has undergone

a process of modernization, which has translated into increased employment in the country’s primary industrial areas

The combination of economic modernization, natural resource abundance and continued improvements in economic governance and political stability that have been taking place, are helping Peru to emerge as one of the most stable economies in Latin America

II.1.4.2 Peru Economic Data

2009 2010 2011 2012 2013

Economic Growth (GDP, annual variation in %) 1.0 8.5 6.5 6.0 5.8

Inflation Rate (CPI, annual variation in %, eop) 0.3 2.1 4.7 2.7 2.9

Inflation Rate (CPI, annual variation in %) 2.9 1.5 3.4 3.7 2.8

Exports (annual variation in %) -12.6 32.1 29.6 0.1 -9.1

- Exchange rates: nuevo sol (PEN) per US dollar - 2.699 (2013 est.)

- Exports from Peru

In Peru, ores and minerals exports make up over 50% of total exports, food accounts for 21% and mineral fuels account for 12% As in many resource-rich countries with a traditional export-led growth model, international trade and financial conditions have largely affected the performance of the external sector In fact, the economy as a whole has been affected by these conditions, even considering that domestic demand has been the main driver of growth in recent years

Due to favorable conditions in international trade, the country has experienced growth in real goods and services exports of 6.3% annually since 2000 That said, in the same period, imports have expanded at an average 8.5% annually, thus outpacing the strong performance in exports In nominal terms, merchandise imports have reached the size of exports, which caused 2013 to close with a zero trade balance surplus

According to FocusEconomics Consensus Forecast panelists’ projections from June 2014, Peruvian exports are expected to expand in the coming years following a contraction in 2013

Panelists see exports increasing to USD 43.7 billion in 2014 and tallying an annual growth rate of 3.5% For 2015, panelists expect exports to increase to USD 47 billion In 2018, panelists expect exports to reach USD 63.6 billion and to record an annual growth rate of 12.1%

- Imports to Peru

Peru’s imports are mainly composed of final and intermediate goods, as opposed to exports,

in which minerals and ores account for the majority of overseas sales Imports of machinery account for roughly a quarter of the total value Whereas these figures suggest the modernization of the national industry through private investment, they have not yet weighed on the trade balance

Since 2002, imports have not offset exports, although they have been expanding at a faster level since then In fact, given the weaker performance of exports in the first half of 2014, imports are likely to outweigh exports and drive Peru’s trade balance to the first deficit since 2001

II.1.5 INFRASTRUCTURE

Peruvian government has prioritized the development of transport infrastructure (road, rail, ports and airports) to increase competitiveness and set up a logistics hub that integrates Latin America, with the Asia – Pacific economic region

During the period of 2005-2010, Peru had a slight improvement in some sectors such as water, sanitation and electricity, but there is a big gap in vial projects, railways, health, among others

As an example, nowadays there are only four railroads in the country, mostly used to transport minerals or for tourism Peru requires more investment in roads and railway infrastructure to serve the transport of persons, facilitate trade and the connection between remote places and main cities During the period of 2003-2012, the Transport Sector began to improve its investment rates with the following results: Railways 3%, Airport 10%, Ports 11%, ;Roads 76%

One of the current requirements of infrastructure is to pave the roads of the national network and connect the country These projects were improving the infrastructure sector and the possibilities for international companies

II.1.6 POLITICAL – LEGAL ENVIRONMENT

- Government type: constitutional republic

- Capital: name: Lima

- Administrative divisions: 25 regions (regiones, singular - region) and 1 province*

(provincia); Amazonas, Ancash, Apurimac, Arequipa, Ayacucho, Cajamarca, Callao, Cusco, Huancavelica, Huanuco, Ica, Junin, La Libertad, Lambayeque, Lima, Lima*, Loreto, Madre de Dios, Moquegua, Pasco, Piura, Puno, San Martin, Tacna, Tumbes, Ucayali

- Independence: 28 July 1821 (from Spain)

- Legal system: civil law system

- International organization participation: APEC, BIS, CAN, CD, CELAC, EITI (compliant

country), FAO, G-24, G-77, IADB, IAEA, IBRD, ICAO, ICC (NGOs), ICRM, IDA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC (NGOs), LAES, LAIA, Mercosur (associate), MIGA, MINURSO, MINUSTAH, MONUSCO, NAM, OAS, OPANAL, OPCW, Pacific Alliance, PCA, SICA (observer), UN, UNASUR, UNCTAD, UNESCO, UNIDO, Union Latina, UNISFA, UNMIL, UNMISS, UNOCI, UNWTO, UPU, WCO, WFTU (NGOs), WHO, WIPO, WMO, WTO

- Flag description

-

II.1.7 NATURAL ENVIRONMENT

- Location: Western South America, bordering the South Pacific Ocean, between Chile and

Ecuador

- Climate: varies from tropical in east to dry desert in west; temperate to frigid in Andes

- Deforestation (some the result of illegal logging); overgrazing of the slopes of the costa and

sierra leading to soil erosion; desertification; air pollution in Lima; pollution of rivers and coastal waters from municipal and mining wastes

- Natural resources: copper, silver, gold, petroleum, timber, fish, iron ore, coal, phosphate,

potash, hydropower, natural gas

- Natural hazards: earthquakes, tsunamis, flooding, landslides, mild volcanic activity

II.2 MIRCO-ENVIRONMENT ANALYSIS

II.2.3 COMPETITORS:

II.2.3.1 Group Neuma Peru:

Function: Neuma Peru imports, distributes and sells tires for mining, construction and

Giants in fixed, mobile and in-situ mining workshops

Target: The aim of Neuma Peru is to eliminate, minimize, and control losses caused by any

process, condition or action, thus increasing the quality of services rendered, the productivity of the company and the development of new projects through continuous improvement

Mission: "Contributing to the progress of our customers by providing the highest quality and

excellence in selling tires and the use of advanced technology in the delivery of our services."

View: "Consolidate as the best company sales and tire repair and a strategic partner for the

development of maximum cost / benefit our customers."

Corporate Values:

- No activity takes precedence over the health and safety of people

- Treat people with respect, dignity and integrity

- Include all staff in troubleshooting Health, Safety and Environment, motivating their contribution and participation by exposing their ideals and vision

- Providing our customers with effective support to keep the long-term performance Loss Prevention

- Demonstrate leadership and innovation, developing opportunities and creating a work environment with prospects for continuous improvement

Policies (Safety, Health and Environment)

Neuma Peru is committed to a strong security program that protects its employees, Contractors, Subcontractors, customers, the public and property of accidents and / or incidents

Neuma Peru is convinced that all accidents are preventable We strive for a goal of ZERO ACCIDENT Active participation of our organization at all levels ensure that our goals and those of our customers are met

Peru Neuma provide cooperation, consulting, continuous and relevant training to employees, safe working methods and maintenance procedures and safety guidelines that focus on awareness Management, Employees and Contractors reducing the risk of accidents and / or incidents in all activities

Neuma Peru, Contractors, Subcontractors are responsible for compliance with all standards outlined in this program, and cooperate with management on continuous improvement of the program

Neuma Peru Management, Employees and Contractors are collectively responsible for ensuring compliance with all regulations and laws

II.2.3.2 THE PIRELLI

Introduction

Pirelli Starts Production in Peru The Italian tire company Pirelli announced the start of operations in Peru, in Italy is a pioneer company in the production of tires for cars, SUVs and commercial vehicles, with a wide range of solutions designed to Achieve the highest performance and comfort on all roads and in all weather conditions

The long experience in the tire's field, the unflagging commitment by the company During research and development stage and the EXTENSIVE sales network enable to reach the top in every single product If you need to buy car, motorcycle, truck & bus tires motorsport

Company With sole shareholder - subject to direction and coordination by Pirelli & CSpA The domain is registered pirellityre.com by Pirelli & CSPA

The Pirelli company specializing in the manufacture of tires for vehicles, announced the start

of its operations in the Peruvian market due to the growth experienced by the automotive market

Business result

In 2013 reported 1.5 million of products for cars and 700,000 for buses and trucks

In the remainder of 2014, Pirelli plans to add five new outlets in addition to the 40 that the tire manufacturer already has in Peru until 2016, the plan is to double that number

Pirelli's new office in Lima will be totally dedicated to managing brand presence in the Peruvian market and will serve all customers supplying tires for passenger cars, motorcycles, trucks and buses

II.2.4 TIRE MARKET SIZE

Over 85,000 new cars were purchased in 2013 in Peru and this year 12% growth in sales is

estimated It is projected that by 2020 300 thousand new units are purchased

The automotive sector began accelerating year According to the Automotive Association of Peru (AAP), a total of 19,964 new vehicles were sold and registered in January at the Land Registry Vehicular, representing an increase of 39% compared to the same period of 2012 when 14,314 units were registered

According to the type of vehicle, 8,567 cars and 4,496 SUVs SUV, Pick Up and 2,451 vans, 2,037 trucks, 140 station wagon, 1,893 trucks and tractors, and 380 minibuses and buses were recorded

The registration of the top 10 brands was: Toyota 3,314 units (16.60%), Hyundai 3,060 pcs (15.33%), Kia 1,954 pcs (9.79%), Chevrolet 1,880 pcs (9.42%), Nissan 1,527 pcs (7.65%), Suzuki

862 pcs (4.32%), Volkswagen 742 pcs (3.72%), Renault 398 pcs (1.99%), Mitsubishi 340 pcs (1.70%) and JAC 322 pcs (1.61%)

For registration area, Lima enrolled 14,129 units; Arequipa, 1,721; La Libertad, 827; Lambayeque, Cajamarca, Amazonas, about 738; Cusco Apurimac-Mother of God, 621; Moquegua-Tacna-Puno, 571; and Junin-Huánuco-Pasco, 442

II.3 PEST ANALYSIS

II.3.1 POLITIC AND LEGAL

II.3.1.1 POLITIC

II.3.1.1.1 POLITICAL STABILITY

Following economic chaos during the first presidency of Alan Garcia (1985-90), Peru started recovering thanks to a combination of pro-business reforms and economic stability Inflation reached

a whopping 7,481 percent in 1990 and an average of 2342 percent during Garcia’s five-year term Meanwhile, GDP fell on average by 1.6 percent in that period (and fell 13.4 percent in 1989)

Thanks to reforms during the first presidency of Alberto Fujimori and continued friendly policies during his successors, Peru was able to recover and become a macro economic star Ironically enough, Garcia himself in his second term (2006-2011) followed those more business friendly policies rather than the radical ones he had implemented in his first period Garcia’s second term became a positive surprise for many local and foreign investors However, they grew nervous when Ollanta Humala won the 2011 elections on a radical platform Once in office, though, he moderated his policies and assured investors by keeping the well-respected central bank president Julio Velarde while appointing Miguel Castilla as economy minister He had served as the vice minister of economy under Garcia

business-The macro economic success has largely continued during Humala, with GDP growth of 6.3 percent last year – more than twice the Latin American average However, inflation did grow slightly

in 2011 and 2012 This year it is expected to reach 2.1 percent, the second-lowest rate in Latin America

II.3.1.1.2 Peru’s Fiscal Policy

Since 1998 when the country barely avoided bankruptcy by signing an agreement with the IMF, Peru has followed a steady path of fiscal consolidation The fiscal balance has registered only four years of deficit in the last decade and those deficits have never been larger than 1.3% of GDP Furthermore, public debt was cut more than in half, from the 44.3% of GDP tallied in 2004 to just 19.2% of GDP in 2013 The economy’s overall stable and strong performance has allowed the government to increase its revenues and, therefore, to balance the budget Despite the fact that government consumption has expanded faster than GDP in the last decade, the Humala administration is committed to fiscal responsibility while simultaneously aiming at promoting social development and productive public investment

As of the June 2014 FocusEconomics Consensus Forecast report, panelists surveyed expected Peru’s public accounts to be balanced by 2014 For 2015, the same result is expected; and in 2018, the panel projects a surplus of 0.2% of GDP

II.3.1.1.3 Peru’s Monetary Policy

The Peruvian financial system became highly dollarized after the 1998 IMF intervention Since the 2000s, and given the increased stability in the financial and monetary sectors, the financial system has been de-dollarizing progressively In fact, credit denominated in soles is increasingly gaining ground, a sign of both confidence as well as good management of the country’s finances and monetary affairs

In June 2014, Focus Economics Consensus Forecast panelists projected that the Peruvian sol would be broadly stable versus the U.S dollar for the foreseeable future Panelists projected that the sol would trade at 2.85 Peruvian sol (PEN) per USD by end of 2014 By the end of 2015, panelists forecast the sol to be broadly stable and to trade at 2.86 PEN per USD In 2017 and 2018, the sol is expected to strengthen, trading at 2.79 PEN per USD and at 2.77 PEN per USD, respectively

II.3.1.1.4 Peru’s Exchange Rate Policy

Despite that the Peruvian financial system has been progressively reducing its degree of dollarization, the BCP is highly vigilant about the fluctuations of the sol

The external sector’s strong performance in the last decade has allowed Peru to build a large cushion of international reserves, which currently cover the cost of over five years of imports The increase in reserves has allowed the BCP to guarantee a stable sol in the exchange market and has even allowed for a sizeable appreciation (from 3.41 PEN per USD in 2004 to 2.70 PEN per USD in 2013) This appreciation also has been prompted by the increase in the world supply of USD following the Fed’s quantitative easing programs Thus, the PEN has followed somewhat of an appreciation path, although during 2013 and the first half of 2014 it remained broadly stable at around 2.8 PEN per USD

II.3.1.2 LEGAL

II.3.1.2.1 GUARANTEES FOR FOREIGN INVESTMENT

Investors are guaranteed the right to freely transfer abroad, in freely converted currency and without any authorization whatsoever, the whole of their capital, dividends, profits, royalties and consideration for the use and transfer of technologies and elements of industrial property Where appropriate to convert national currency to foreign currency, they shall be entitled to the most favorable exchange rate Investor rights can be stabilized by legal stability agreements meeting the requirements established in the law The automatic authorization of investments is established, subject only to registration after their completion The only restriction allowed by the constitution in respect of foreigners is that they cannot acquire or possess, within 50 miles of the border, mines,

lands, forests, water, fuels and energy sources, unless an exception is declared by Supreme Decree based on a public necessity cause or because of national interest Investors and corporations receiving investment can enter into an agreement with the state, to guarantee that the basic rules (including certain tax rules) in force at the moment of the subscription will freeze Agreements cannot be unilaterally modified by the state, allowing the investors certainty as to the rules governing their investment during a reasonable term

II.3.1.2.2 COMPANY STRUCTURES FOR ECONOMIC ACTIVITIES

The Framework Law for Private Investment Growth, adopted by Legislative Decree 757 in November 1991, recognizes the freedom of investors to adopt for their economic activities the business structure they may prefer

To exercise on a regular basis acts within their social purpose they must conform to the requirements established in Peruvian law This means that, at least, they must register with the Public Registry, indicating an address and a legal representative, who must be Peruvian or a foreigner residing in Peruvian territory who should have an immigration card

The General Law of Companies regulates the different types of companies that investors can use to make their investments in Peru The three types which are most commonly used are the corporation, the commercial company with limited liability and the branch (which does not qualify as a legal entity separate from the parent company) This law regulates three special forms of corporation: the ordinary corporation, the closed corporation and the open corporation

The shareholders or partners of any type of company may enter into agreements among themselves or with third parties in order to regulate their rights and obligations in the company, agree on investment obligations, minimum periods of permanence in the company, and voting syndicates, among others

II.3.1.2.3 Corporations

The corporation is the type of legal structure most often used for doing business in Peru It is a limited liability company, eminently capitalist, whose structure enables distinguishing the administration from the property administered For its constitution, it requires a minimum of two shareholders, which may be natural as well as legal persons The capital will be split into transferable securities referred to as shares The transfer of shares in an ordinary corporation is free, unless otherwise agreed With regard to social capital, the law does not set a minimum capital, although in certain industries, sector regulation, for example in the financial sector, does set some minimum

capital requirements The initial contribution for its constitution must be deposited in a local bank The governing bodies of the corporation will be the general meeting of shareholders, the board and the general manager The statutes are formalized by public deed and entered in the public registry In addition, two specialized types of corporations can be found under Peruvian law, which in addition shall be subject to the rules of the ordinary corporation: closed corporations and open corporations

II.3.1.2.4 Closed Corporations

The closed corporation is quite similar to the commercial company with limited liability It is required to have a minimum of two and a maximum of 20 shareholders

It carries certain limitations on the transfer of shares, such as those posed by stockholders’ preemptive rights (in this case, agreements to the contrary are allowed), and in some cases, the consent of the company (this should be agreed in the statute) Shares may not be listed in the Public Registry of the Securities Market It is optional for this type of society to have a board, which is a matter defined in its statute Similarly, this type of corporation allows non-contact shareholders’ meetings It is ideal for small capital companies or for those with few partners

II.3.1.2.5 Open Corporations

A corporation is open when it meets one or more of the following conditions:

- It has made a primary public offering of shares or convertible bonds

- It has more than 750 shareholders

- Over 35 percent of its capital belongs to 175 or more shareholders, excluding from this number those shareholders whose individual holdings do not reach two per thousand of the capital or exceed 5 percent of the capital

- It is constituted as such

- All shareholders with voting rights unanimously approve the adoption of that regimen

The open corporation must register all its shares in the Public Registry of the Securities Market They are companies subject to supervision by the National Supervisory Commission of Companies and Securities (Conasev)

II.3.1.2.4 Limited Liability Companies

The limited liability company is constituted with a minimum of two and a maximum of 20 partners It does not issue shares (but participations) and has no board Its form of organization is