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INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION THESIS SOLUTIONS FOR UPGRADING EFFECTIVENESS OF WHEAT IMPORT OF VINAFOOD1 FLOUR MILL COMPANY GIẢI PHÁP NÂNG CAO HIỆU QUẢ NHẬP KHẨU LÚA MÌ CỦA CƠNG TY BỘT MÌ VINAFOOD1 FOREWORD In the trend of globalization and Vietnam’s increasingly intensive integration into the world economy today, the import is an important activity bringing about economic effectiveness to the enterprise Vinafood Flour Mill Company is an enterprise engaged in the field of import of wheat flour for purpose of flour production and local sale Effectiveness of wheat import greatly affects the business performance of the enterprise Therefore, I choose the subject: “Solutions for Upgrading Effectiveness of Wheat Import of Vinafood1 Flour Mill Company” for my master's thesis During researching and completing the thesis, I have received hearted help and guidance of instructing teacher, AP Dr Ngo Thi Tuyet Mai I would like to express my profound gratitude for her invaluable help I sincerely thank the program, the teachers for helping me complete the course and the thesis I would like to thank the Management of Vinafood Flour Mill Company, officers and employees of the Company for assisting and creating favorable conditions during the research and implementation of the project Finally, I would like to express my deep gratitude for my family, friends and colleagues for motivating and encouraging me throughout the process of learning and research During the study, although I myself was trying to combine both theory and practice at the unit to complete this thesis, for many objective and subjective reasons, the thesis still has certain shortcomings; I look forward to feedback from teachers, colleagues and friends Yours sincerely! TABLE OF CONTENTS Page Cover subpage Statement i i Preamble ii Table of contents iii List of abbreviations ………………….……………………………………… vi List of Tables .vii List of Figures viii INTRODUCTION Chapter 1: Rationale for the effectiveness of goods import of the business …4 1.1 Definition and classification of effectiveness of goods import .…4 1.1.1 Definition .…4 1.1.2 Classification of effectiveness …6 1.2 The indicator for assessment of import effectiveness …8 1.2.1 Effectiveness of use of import capital .…8 1.2.2 Import profit …9 1.2.3 Rate of Returns from import …9 1.3 Factors affecting the effectiveness of goods import 10 1.3.1 External factors (PEST+ Model) 10 1.3.2 Internal factors 14 1.4 Experience in solutions to improve the effectiveness of wheat flour import of Binh Dong Flour Mill Company and the lessons learned for Vinafood1 Flour Mill Company 16 1.4.1 Experience and solutions to improve the effectiveness of wheat flour import of Binh Dong Flour Mill Company .16 1.4.2 Lessons learned for Vinafood Flour Mill Company .18 1.5 The solutions to improve the effectiveness of the import 19 1.5.1 Promotion of market research and forecast 19 1.5.2 Improvement of the quality of human resources 20 1.5.3 Mobilization and efficient use of capital 20 1.5.4 Research and selection of appropriate import method 21 1.5.5 Completion of logistics 21 1.5.6 Application of measures to reduce the cost of imports .21 ii Chapter 2: Analysis of Current Situation of Improving Effectiveness of Wheat Import of Vinafood1 Flour Mill Company 23 2.1 Overview of Vinafood1 Flour Mill Company 23 2.1.1 The process of formation and development of the Company 23 2.1.2 The functions, duties and powers of the Company 24 2.1.3 Organizational structure of the Company 27 2.1.4 Results of business activities of the Company 30 2.2 Analysis of factors affecting the improvement of the effectiveness of the import……………………………………………………………………31 2.2.1 External factors 32 2.2.2 Internal factors…………………………………………………… 36 2.3 An overview of the current status of the wheat import of Company 40 2.3.1 Production and import turnover 41 2.3.2 The import market 43 2.3.3 The structure of imports 44 2.3.4 Import form 46 2.3.5 Distribution system 46 2.4 Analysis and evaluation of the effectiveness of wheat import 48 2.4.1 Analysis of effectiveness of wheat import 48 2.4.2 Assessment of effectiveness of wheat import……………………… 56 Chapter 3: Directions, solutions and proposals to improve effectiveness of wheat import of Vinafood1 Flour Mill Company…………………………….61 3.1 Direction and targets to improve effectiveness of wheat import of the Company………………………………………………………………….61 3.1.1 Direction of wheat import of the Company………………………….61 3.1.2 Import targets of the Company………………………………………62 3.2 Solutions to improve the effectiveness of wheat import of the Company…62 3.2.1 Promotion of market research and forecast………………………… 62 3.2.2 Improving management level of human resources………………… 63 3.2.3 Mobilization and effective use of capital…………………………….64 3.2.4 Research and selection of appropriate import methods…………… 65 3.2.5 Completion of transport delivery…………………………………….66 3.2.6 Application of methods to reduce import costs…………………… 67 iii 3.3 Recommendations for improving import effectiveness of the Company…68 3.3.1 Recommendations for the State…………………………………… 68 3.3.2 Recommendations for Vietnam Northern Food Corporation……… 70 CONCLUSION……………………………………………………………………73 LIST OF REFERENCES………………………………………………………….74 LIST OF ABBREVIATIONS Acronyms Full form SE Staff officers and employees Ltd Limited liability USD U.S Dollars USDA United States Department of Agriculture VND VND iv LIST OF TABLES Table 2.1 - Results of business operations from 2008 to 2012 30 Table 2.2 - Qualification structure of Vinafood1 Flour Mill Company 36 Table 2.3 - Criteria of capital of the Company from 2008 to 2012 37 Table 2.4 - Production and wheat import turnover of the Company for the period 2008 – 2012 41 Table 2.5 - Wheat import market in the period 2008 - 2012 43 Table 2.6 - Structure of imported wheat in the period 2008 - 2012 .45 Table 2.7 - Target for efficiency of use of working capital in the period 2008 – 2012……………………………………………………………………48 Table 2.8 - Profit target and rate of return of wheat import in the period 2008 – 2012…………………………………………………………………….51 Table 3.1 - Import targets of the Company in period 2011 – 2020 62 v LIST OF FIGURES Figure 2.1 – Organizational structure of management apparatus 28 Figure 2.2 - Distribution System 47 Figure 2.3 – The number of turns of working capital in the period 2008 - 2012 49 Figure 2.4 - One - turn duration of working capital in the period 2008 - 2012 50 Figure 2.5 - Working capital efficiency ratio for the period 2008 - 2012 .51 Figure 2.6 - Wheat import profit for the period 2008 – 2012 .52 Figure 2.7 - Return on sales in the period 2008 - 2012 53 Figure 2.8 - Return on costs in the period 2008 - 2012 54 Figure 2.9 - Rate of return on total capital in the period 2008 - 2012 55 vi INTRODUCTION The necessity and significance of research International economic integration is an inevitable trend attracting interest of all the nations in the world because it has a tremendous impact on the development of each country In this trend, international trade is a activity playing a key role in promoting integration of local economy in the world economy Among countries, the exchange of international trade is represented by export and import business Vietnam has been increasingly intensive involved in the world economy, creating many opportunities and challenges for Vietnamese enterprises, especially manufacturing and processing industry in general and wheat flour manufacturing and processing industry in particular For wheat flour manufacturing and processing industry, the main raw material is wheat Weather conditions in our country create unfavorable conditions for wheat, or at very high care costs, while consumer’s demand for wheat in the country has increased, leading to the request for full import Business performance of enterprises producing and processing wheat flour depends heavily on effectiveness of wheat imports from abroad Since 2008, the world economy’s recession has heavily affected the domestic economy, led to high inflation, made people tighten their expenditure, increased USD exchange sharply, strongly influencing and causing difficult for wheat production, particularly the effectiveness of wheat import Vinafood1 is a Company operating in the field of wheat flour production and processing is not an exception In such situation, I myself am working for Vinafood1, under the dedicated guidance of A.P, Dr Ngo Thi Tuyet Mai, I chose the topic “Solutions for Upgrading Effectiveness of Wheat Import of Vinafood1 Flour Mill Company” for my master thesis in order to work out solutions to overcome the difficulties that Company is facing The research objective of the thesis - Clarifying the theoretical and practical issues of efficiency of import - Evaluating the effectiveness of wheat flour import of Vinafood Flour Mill Company in recent years, and pointing out the advantages, limitations and reasons for such limitations - Suggesting orientation, solutions and recommendations to improve the effectiveness of wheat import of Vinafood Flour Mill Company in the future Object and scope of the research - Object: The research of effectiveness of import of wheat flour of Vinafood Flour Mill Company - Scope of the research: + Content: Thesis approaches from the part of the Company, researching effectiveness of import (mainly on the financial aspect) and the content related to the effectiveness of wheat flour import by Vinafood Flour Mill Company + Space: Thesis focuses on research of effectiveness of wheat flour import by Vinafood Flour Mill Company + Time: Thesis focuses on research of the effectiveness of wheat flour import by Vinafood Flour Mill Company from 2008 to 2013 and suggestion of some meaningful directions and solutions until the year of 2020 Research methodology of the thesis Research methodology: During the thesis, the author uses the traditional method of research in economics such as statistics, analysis, comparison and synthesis to resolve the tasks set out in thesis The authors also uses the results of previous studies and adds new data based on practical research, in order to increase the scientific and logic nature of the thesis Method of data collection: Thesis mainly uses method of secondary data collection Such data is taken from the published report and the statistics of the state agency, the internal documents and communication of Vinafood Flour Mill Company in recent years Structure of the thesis Besides the introduction, the tables, the illustration, conclusions and references, the thesis is divided into three chapters as follows: Chapter 1: Rationale for the effectiveness of goods import of the business Chapter 2: Status of effectiveness of import of wheat flour of Vinafood Flour Mill Company Chapter 3: Orientation and solutions as well as recommendations to improve the effectiveness of wheat flour import of Vinafood Flour Mill Company increase, the interest rate in USD increased and then the Company had to incur additional interest expense in USD to make payment for the contracts of wheat import with foreign suppliers The price of gasoline also increased, specifically on 21/7/2008 the price of petrol A92 was 19.000 VND/liter, diezen price was 15.900 VND/liter, to 22/8/2013 the price of petrol A92 was 24.270 VND/liter, diezen price was 22.260 VND/liter, increased 27,7% and 40% respectively to make increase of transportation costs and brought about all other costs such as: warehouse renting, loading and unloading freight, salaries and wages of labor also increased As a result, the total costs of import of the Company increased Reasons from the business itself: The Company has not set up a market research division yet, so the information on the market and the market price has not been updated and not yet found out the potential partner for wheat export, thus the Company often has to purchase goods through the brokers The market research is primarily assigned to the officers of other division, who held different positions and not professionally trained, poor language, greatly affected the decision of wheat importing time of the Company Vinafood1 Flour Mill Company is a State business newly participating in the import market for 10 years, thus the management mechanism is still greatly affected by the State management mechanism, paying much attention to the controllability, principles and a part of bureaucracy, less focusing on the efficiency and flexibility The Company has not been proactive in field of capital, depending much on the capital granted by the Corporation and loan from bank In the context of USD interest rate and USD exchange rate increase incessantly, the payment of interest and loss of foreign exchange shall make the Company restrict its profits The exchange rate is not stable, always tends to increase, however, the Company has not yet had preventive measures for the exchange rate risk The Company has not been proactive in field of transportation vehicles, there only have specialized tank trucks carrying bulk flour but it has no tractor and has not yet had facilities for the transportation of wheat and flour the it had to 55 outsource, incurring the transporation costs makes increase the import costs, reduce effectiveness of wheat import of the Company Because there is not any large seaport in the Northern area, the breakbulk vessels cannot access and must arrive to the port in the South, then transship to the small vessel to transport to Hai Phong and Cua Lo leading to incurring costs for the transshipment, costs of loading and unloading cargoes in ports, freight charges fro wheat from Vung Tau to Hai Phong and Cua Lo, travelling expenses, business cost of the goods receiver to increase the cost of imported wheat Conclusion to Chapter The Chapter reflects the import results and current situation of the wheat import of Vinafood1 Flour Mill Company for recent years Basing on the indicators as stated in Chapter 1, the Chapter made assessment for the obtained aspects and limitations in improving efficiency of wheat import of the Company as well as analyzing reasons leading to those limitations CHAPTER 3: DIRECTION, SOLUTIONS AND PROPOSAL TO IMPROVE EFFECTIVENESS OF WHEAT IMPORT OF VINAFOOD FLOUR MILL COMPANY 3.1 Direction and targets to improve effectiveness of wheat import of the Company 3.1.1 Direction of wheat import of the Company In the tendency of economic globalization presently, the international business operation is increasingly expanded and plays an important role; the expansion of trade with foreign partners is objectively indispensable As a manufacturing business with 100% raw materials imported from abroad, the import plays an important role in the development strategy of the Company Basing on current situation of the wheat import of the Company in the near future, the Company should pay attention to the wheat import to 2020 as follows: In terms of imported goods: The Company should import the wheat such as APW, APH from Australia as the mainstay goods because the protein in Australian 56 wheat is moderate, the toughness of gluten is suitable to make many types of bread and noodles, flour produced from APW wheat is ivory, suitable with Vietnamese taste and the quality of Australia wheat is good and in reasonable price In terms of import markets: The Company should import different types of wheat, high - quality wheat of United State, Canada, low - quality wheat of India, Pakistan to mix with the Australia wheat to create the different flour In terms of import method: The Company should use the direct import method for the cost savings due to cheaper price In terms of distribution system: trying to reach 60% of goods sold to the retail market, 40% of goods sold to the factories because the price of goods to the retail market is higher than to the factories 3.1.2 Import targets of the Company Basing on production plan of the Company in period 2011 – 2015 and period 2015 – 2020, Vinafood1 Flour Mill Company set out targets from now to 2020 as follow: Table 3.1 – Import targets of the Company in period 2011 - 2020 Item Import production Import turnover Import profits Unit Tons Mil USD Bil VND 2011 56.000 20 5,8 2013 67.000 24 7,5 Year 2015 2018 2020 80.000 104.000 120.000 29 38 46 10 14,5 19 The basis should be in 2011, the Company makes great effort to 2020 to reach the production of 120.000 tons, the import turnover of USD 46 million and the import profits of VND 19 billion 3.2 Solutions to improve the effectiveness of wheat import of the Company 3.2.1 Promotion of market research and forecast The Company has not had market research division, thus all information on market, market price and export partner for wheat, etc In order to have exact and timely information and assure of dealing capacity with changes during the business process, the Company should set up a Marketing division under the market business 57 department with professionally - trained employees The employees in the marketing division shall be selected from the part of excellent staff and employees of business department or external economic department or it is possible to employ employees from outside of the Company, however, those should be assure of profession, occupation, good at foreign language(s), knowledgeable on domestic and foreign markets, understanding of international practices, having skills of market research and forecast In order that the marketing division operates effectively, the Company should focus on improving employee’s skills by training, on - site training, possibly assigning to the professional training courses and having regimes to encourage the worthy employees as salary, bonus, etc The effective operations of the Marketing division shall help the Company Leadership make rapid and appropriate decisions, minimize the incurred costs and create favourable conditions for the import activities smoothly, bring effectiveness to the Company 3.2.2 Improving management level of human resources Human resources is a primary and decisive factor to all business operations of the enterprise Vinafood1 Flour Mill Company with the specific characteristics of importing wheat for flour production, the import is an important activity to improve business effectiveness, thus the role of the advisory officer in field of import becomes extremely important Therefore, the Company should increase its staff’s living standard, increase business’s competitiveness in attracting human resources To that, the HR program of the Company should be renewed in fields such as: organizational sitemap, job description, recruitment, training, improvement of labor productivity, staff evaluation, new remuneration and salary policies, as follows: Firstly: Carrying out arrangement and assignment for the workforce into appropriate position, creating favorable conditions for them to maximize their abilities and overcome their weaknesses in the work Building up reasonable treatment regimes (salary and bonus) for positions requiring qualification on wheat production such Chief of Shift, technological technician, customer - care technician, etc Along with the salary policies, it should implement the appropriate recruitment and training Positively applying on - site training, boldly making 58 appointment as well as assignment for experienced and qualified officers to coach the new and to - be - appointed employees In the long term, the qualified HR on food chemistry with degree in English could be recruited and possibly covered up to 80% of school fees with commitment on long - term working to the Company Secondly: Periodically organizing testing, inspection of officers and employees qualifications Basing on the testing results, the Company could select and assign officers and employees to participate in the courses of training, knowledgement fostering, improving level and profession or retraining Thirdly: Improving and step by step standardizing the qualification of management officers The management officer, in addition to the professional skills, he is also required the skills in communication, negotiation, strategic planning, etc So the Company Leadership needs to research and learn advanced management standards in the world to apply into the Company Well-implementing the above basic things, the Company shall have compact structure and fast communication The departments and divisions are divided according to functions thus the tasks shall be easily allocated according to the specific functions of the department Improving the efficiency and increasing business productivity 3.2.3 Mobilization and effective use of capital Capital is one of the antecedent factors of business and production activities of the enterprise In the limited context of production resources, how to effectively use capital is of primary concern by the business, especially in the import businesses Vinafood1 Flour Mill Company is granted VND 30 billion of working capital by the Corporation Compared to the annual import turnover, approximate USD 20 million (equivalent to VND 400 billion), that capital is little and occupied of 7,5%, impossibly satisfying the import demand Therefor, the Company mainly has to borrow loan from the bank In order to improve the efficiency of wheat import, the Company should renovate and expand form of mobilization as well as use capital effectively, minimizing the incurred costs such as loan interest, loss from difference of exchange rate, etc Specifically: 59 Firstly: The Company should enhance to borrow preferential loan from the Corporation This shall help the Company save the costs of loan interest, proactively have capital resources to implement import contracts and improve the effectiveness of wheat import Secondly: It is required to build prestige and maintain good relationships with the bank to possibly receive preferences such as: credit support for the import activities, reduction of loan interest costs, reduction of costs for open L/C, payment rate, exchange rate, etc Thirdly: Well-organizing the debt collection, avoiding the prolonged debt to cause stagnation of capital and reduce capital efficiency Currently, the Company allows the distributors to make late payment within 30 days, but many distributors extends the payment from 45 to 60 days as a result to the average receivable debt of the customers by VND 70 billion, the overdue debt about VND 10 billion makes it difficult for the Company The aforementioned solutions shall help Vinafood1 Flour Mill Company enhance the effectiveness of capital use to improve the efficiency of business and production, reduce capital costs and increase the autonomy level in business operation 3.2.4 Research and selection of appropriate import methods Selecting an appropriate import method is a solution so that the Company could improve its efficiency of imports and this will help partners become easily in the process of contract performance as well as reduce the costs incurred To make good for it, the Company should: Firstly: The Company should select the structure of appropriate import goods In addition to the mainstay wheat such as APW, APH, AH, the technology department of the Company needs to research changes in the mixing rate in order to possibly import additional low-quality and cheap-price wheat feed from Indian, Pakistan,… reducing product costs but still assure of the flour quality Secondly: The Company needs to purchase wheat from the direct manufacturers, restricting to purchase wheat from the brokers to reduce the price costs 60 3.2.5 Completion of transport delivery For Vinafood1 Flour Mill Company, the transportation freight always always accounts for a large proportion of total import costs Currently, the Company is only equipped with two new tank trucks carrying bulk flour, but tractor must be hired and all vehicles such as vessels transshipping wheat from the ports in Phu My to Cua Lo port and Hai Phong port, wheat trucks from ports to the two factories and flour trucks from the factory to the customer will have to hire Thus, in order to reduce transportation costs, thereby improving the effectiveness of wheat import, the Company should measures for the completion of transport delivery Firstly: During the process of making import plan, the Company Leadership needs to correctly determine the goods volume and the time when the goods delivered to the port to make plan for chartering and transportation vehicles timely to avoid incurring costs of storage The time when the Company mainly receives goods is from January to April, which is also the time of inland vessels transporting temporary-storage rice, so it is difficult to hire vessel and the freight is high Therefore, if making plan to hire vessel in advance, it will reduce costs of transporation Secondly: Calculation combined with transportation appropriately to minimize the costs of circulation When delivering wheat from Bao Phuoc Factory to Hung Quang Factory, the Company can combine using that vehicle to transport flour from Hung Quang to the customers in the North, savings of 20% the costs of transporation Thirdly: Grasping the schedule of transportation vehicles, arranging the deliverer and receiver timely, avoiding the incurred costs of storage, warehousing, and fine for the vehicle shift keeping Presently, the cargo transport vehicles develope rapidly and diversely, possibly well-satisfy requirements for transporting bulk shipments, fast shipping speed Selection of appropriate modes of transport and prestigious shipping firms shall help the Company reduce costs incurred during the transportation of import goods 61 3.2.6 Application of methods to reduce import costs The cost of wheat import is a factor making up the wheat price, decisive to the selling price of the flour, gained revenues and profits, thus affecting the efficiency of wheat import Reducing the cost of wheat import is a key factor to increase the effectiveness of wheat import of the Company The cost items of wheat import activity of Vinafood1 Flour Mill Company included: wheat price, import tax, costs of transport, storage, maintenance, warehousing, delivery costs, sales costs and management costs In order to reduce the wheat price, the Company could purchase wheat directly from the manufacturers, then it will not take the costs of mediation purchase, reducing the wheat price This work should be assigned by the Company to the market research division to get to know and trade For the costs of transport, storage, maintenance, warehousing, the Company should make appropriate import plan, correctly determine the goods volume and the time when the goods delivered to the port to make plan for chartering and transportation vehicles timely to avoid incurring costs of storage Calculation combined with transportation appropriately to minimize the costs of circulation, possibly combine to transport wheat from Bao Phuoc to Hung Quang and then transport flour from Hung Quang to the customers in the North, savings of 20% the costs of transporation For the costs of sales: The Company should build up the technical and economic norms, such as product sales, commission costs for the dealers and distributors of the Company, the consumption rate of electricity, water, equipments and supplies for production, etc., thereby saving the costs and improving the business effectiveness for the Company For the management costs: The Company should streamline the management apparatus compactly, officers and employees in departments can hold different positions with their proper profession as well as building the consumption rate of electricity, water, stationeries, etc., thereby reducing the management costs and improving business effectiveness 3.3 Recommendations for improving import effectiveness of the Company 3.3.1 Recommendations for the State 62 3.3.1.1 Completion of legal system Up to now, Vietnam legal system related to the trade has changed toward more consistent with the international practices But there still has some irrational points to hinder businesses from participating in import business Therefore, in the future, the State should continue to take further complete measures on legal system in order to create a legal corridor which is full, fair and open while assuring of the coherence in management, facilitating the enterprise in business operations In terms of import regulation policies, the State should early change and improve administrative procedures, simplify import procedures, create favorable conditions for business operations of the enterprises The Ministry of Industry and Trade and the General Department of Vietnam Customs should be consistent with each other in the management of import The State should have concern to the amendment and supplement of customs procedures towards standardization In terms of foreign exchange management policies, the current policy of the State is to promote the export, thus the exchange rate is usually operated in favor of the export activities Meanwhile, the import activities also importantly contribute to supplement and balance the domestic insufficient goods, maintain production capacity Therefore, the State should take measures to operate the exchange rate reasonably, create favorable and fair business environment to all businesses in the economy In terms of plant quarantine, the State should issue documents specifically guiding the countries that allowed exporting wheat into Vietnam Where the wheat products from countries without commitment between the two Governments to the port, it is recommended that the Department of Plant Quarantine should carry out the quarantine, in case of no insects or exotic flora in the goods, it is possible for customs clearance, avoiding the re-export to cause remarkable damage for the business 3.3.1.2 HR training In Vietnamese enterprise at present, there happens the shortage of qualified and specialized human resources, meeting the business and production demand in the condition of international economic integration Therefore, the State should 63 enact policies to invest in education, build up a training system methodically and closed to the actual requirements For the businesses operating in import business, especially for the businesses of wheat import, in addition to the professional knowledge and skills, the human resources is required to have qualification of foreign languages and knowledge of international practices, understanding the wheat product In Vietnam, there have not had any university specialized in wheat and flour Officers working in field of wheat import often get information from the internet by themselves, thus the Ministry of Education and Training should consider and put the wheat and flour profession into the teaching program in the universities 3.3.1.3 Infrastructure upgrade Production and business operation in general and import business in particular depends a lot on infrastructure conditions such as: transportation systems, communication systems, seaports, loading and unloading capacity, etc Wishing to upgrade the infrastructure to better serve the business operations, it requires a great investment capital and this is beyond the business’s capability Therefore, the State should have the appropriate investment policies in planning, new construction or upgrading infrastructure to serve the economic development demand of the country 3.3.1.4 Market information support The participation in WTO provides the businesses with many market opportunities, however, it also poses many challenges for them The protective policies have gradually been removed to create a fair competition environment for domestic and foreign enterprises operating business in Vietnam Therefore, the State support is only the support in terms of information The State may provide information on the mass media, publishing statistical documents and alerting fluctuations and risks in international markets that could adversely affect business operations of the enterprises In Vietnam, there has not had any agency collecting and analyzing information on wheat, the wheat import businesses mainly get information from foreign websites, information from these websites is usually inaccurate Therefore, the State can support by establishing the agencies specializing in research and 64 analysis of information on wheat the same as research and analysis of information on the rice 3.3.2 Recommendations for Vietnam Northern Food Corporation 3.3.2.1 Capital support for business operations of the Company Vinafood1 Flour Mill Company is granted VND 30 billion of working capital by the Corporation since 2009 Currently, due to the increasing prices, revenues and import turnover increases, the Company proposed that Vietnam Northern Food Corporation should grant additional working capital and have loans with preferential interest rate to the Company 3.3.2.2 Support to increase credit limit at the bank In 2012 The Corporation signed guarantee for VND 350 billion for the Flour Mill Company at Vietnam Bank for Industry and Trade – Ba Dinh Branch This limit includes LC balance and loan balance Since 2013, the Flour Mill Company put the and silo lines into operation, at a time, the Company opens LC to import wheat with the large quantities then this limit was not enough It is recommended that the Corporation should consider the guarantee and increase credit limit with the bank for the Company so that the Company could be active in its business and production 3.3.2.3 Support for foreign currencies Currently, the Company has a loan in foreign currency to import wheat at Vietnam Bank for Industry and Trade – Ba Dinh Branc In recent year, the foreign currencies are always in shortage situation, the exchange rate is always high It is recommended that the Corporation having foreign currencies for the rice export should support the Company for purpose of reducing financial costs and shortage of foreign currencies, help the Company increase the effectiveness of business operation 3.3.2.4 Rebuilding of salary payment regime Currently, the salary fund of the Flour Mill Company is decided by the Corporation, calculated on basis of the basic salary coefficient by the Ministry of Labour, Invalids and Social Affairs and the annually implemented revenue The salary distribution of the Company is affected by basic salary coefficient issued by 65 the Ministry of Labour, Invalids and Social Affairs, thus it is not equal in the reproduction of labor, especially some positions require hi-tech qualification, the salary in the salary scale is not appropriate to attract the HR It is recommended that the organization board of the Corporation should make plan for the salary distribution by the contribution of the employee in order to attract and get closed to the Company 3.3.2.5 Payment of trip expenditure The imported goods mainly from the Southern ports, the cargo losts when transshipping vessels is very difficult to control; thus the Company assigned officer to directly deliver and escort goods when receiving the goods from foreign vessels until the goods delivered to the factory Currently, the officer who had business trip has not been paid for the ticket costs, this is no longer consistent with the reality, because traveling by plane is not too expensive The officer goes business by plane with the ticker lower than the train fare can possibly shorten the work time, reduce expenditure of business trip Where the officer has a business trip from Haiphong to Saigon, if travelling by train, it must travel from a previous day, to Hanoi and then purchase train fare to Saigon Railway Station, while if travelling by plane, after two days to buy tickets and has a direct flight from Haiphong to Saigon, the expenditure for business trip of two days shall reduce, the ticket is equal, even cheaper if have plan to buy ticket in advance Therefore, Vinafood1 Flour Mill Company recommended that the Corporation should allow its officers and employees to have payment for the plane ticket if the ticket cost is less than the cost of the train Conclusion to Chapter The Chapter has reviewed directions and targets to improve the effectiveness of wheat import of the Company, propose solutions and make some recommendations for the State as well as Vietnam Northern Food Corporation 66 CONCLUSION Our economy is increasingly integrated with the world economy widely and deeply and has created opportunities as well as challenges for the businesses in general and import businesses in particular For the businesses importing wheat, capturing the advantages and identifying risks before the relentless volatility of the world economy are decisive to the survival and development of the business The reality shows that although having accumulated experience as well as establishing relationships with traditional customers and created conditions by the Corporation Leadership, Vinafood1 Flour Mill Company has faced many difficulties due to competition with many large flour mills, they have many advantages and constantly cause pressure to cut down price So, the Company needs to have strong changes to fit the new business situation The thesis has recommended some solutions to promote import activities of the Company such as improving management level of human resources, Promotion of market research and forecast, Mobilization and effective use of capital, building up dynamic import plans, completion of transport delivery These changes should be soon implemented, however, during the process of implementation, it is required to pay attention to inspect and control to be suitable for the development direction of the Corporation 67 LIST OF REFERENCES Ministry of Agriculture (2013), http://www.agroviet.gov.vn Plant Protection Department (2013), http://www.ppd.gov.vn Quality management Department of Agricultural, forestry and aquatic product (2013), http://www.nafiqad.gov.vn Vinafood1 Flour Mill Company (2008, 2009, 2010, 2011, 2012), Audited Financial Statement, Hanoi Binh Dong Wheat Flour Company Limited (2010, 2011, 2012), Audited Financial Statement, Hồ Chí Minh A.P Dr Dang Dinh Dao, A.P Dr Hoang Duc Than (2001), Giáo trình kinh tế thương mại, Statistical Publishing House, Hanoi A.P Dr Nguyen Duy Bot (1997), Giáo trình thương mại quốc tế, Statistical Publishing House, Hanoi Prof Dr Ngo Dinh Giao (1997), Giáo trình quản trị kinh doanh tổng hợp doanh nghiệp, Publishing House for Science and Technology, Hanoi A.P Dr Pham Thi Gai (2004), Giáo trình phân tích hoạt động kinh doanh, Statistical Publishing House, Hanoi 10 Deputy Dr Tran Chi Thanh (1995), Kinh doanh thương mại quốc tế 11 12 13 14 chế thị trường, Statistical Publishing House, Hanoi Vietnam Northern Food Corporation (2013), http://www.vinafood1.com.vn General Department of Vietnam Customs (2013), http://www.customs.gov.vn General Statistics Office Of Vietnam (2013), http://www.gso.gov.vn Vietinbank, Table of Exchange Rate over 2008, 2009, 2010, 2011, 2012, http://www.vietinbank.vn 15 AgroMonitor, Report on Wheat Import of Vietnam in period 2005 - 2010, Hanoi 16 AgroMonitor, http://www.agromonitor.vn 17 David W.Pearce (1999), Modern Economics Dictionary, National Political 18 Publishing House, P.471 Daniels, Radebaugh and Sullivan (2009), International Business – Environments and Operations, 12th Edition, Pearson International Edition ISBN No: -0-13-500112-9 19 Larry R.Williams, Lecture Slide, International Business Management, PGSM 68 69 ... high humidity for development stage and low humidity for the stage of grain formation If so, the quality of wheat will be ensured Such quality will be lower in rainy and wet condition during... consumer’s demand in the country to develop a import plan for a variety of wheat with different quality for production of many different types of flour Not good cooperation with international carriers,... vendors with good quality, low price and volume stability Market research and forecasts aims at helping businesses get a accurate, timely system information, ensuring the ability to respond to changes