The risk precautions of cashew products in binh phuoc province under the wto entry process in the period from 2011 to 2015

MEIHO UNIVERSITY Graduate Institute of Business and Management MASTERS THESIS The Risk Precautions of Cashew Products in Binh Phuoc Province under the WTO Entry Process in the Period from 2011 to 2015 In partial fulfillment of the requirements for the degree of Masters of Business Administration Advisor: Dr Shao-Hsi Chung Co-advisor: Dr Nguyen Minh Tuan Graduate Student: Tran Van Hue December, 2010 ACKNOWLEDGMENTS First, I would like to express my gratitude to the Board of management of Ho Chi Minh City University of industry and Meiho University, Taiwan who has been enabling me to participate in training programs of Master of Business Administration in the past two years Sincerely thank Associate Professor-Dr Le Van Tan, Deputy Principal of Ho Chi Minh City University of Industry, Dr Nguyen Minh Tuan, Dean of Business Administration department, Associate Professor Dr Vo-Phuoc Tan, Dean of post graduate department of Ho Chi Minh City University of Industry, for giving me precious encouragement so that I am motivated to attend all courses and the feedbacks help me complete this research Sincerely thank Professor Shao-Hsi Chung, University of Meiho, Taiwan (MIT Taiwan), though he is very busy with his work, he spend time instructing and helping me during my research, from choosing topics, doing research to completing it Thank lecturers of department of postgraduate, professors of management and business at the University of Meiho, Taiwan (MIT Taiwan); my classmates of class EMBA of Ho Chi Minh City University of industry, for the assistance, support and encouragement for me during the past two years I learned a lot of valuable knowledge and new skills from this course I would also like to thank the President, members of the Board of management of the University of Meiho, Dr Ron-Chuen Yeh, dean of postgraduate department at the University of Meiho (MIT Taiwan); the Professors, officers and administrative staff, the University of Meiho, Taiwan for devotion on helping me to research, for warmly welcome, warm caring, enthusiastic caring which make me and my friends impressed during our staying at school Please thank postgraduate students of EMBA class, university of Meiho, Taiwan for supporting me a lot in the process of taking this course Last but not least, I would like to thank people’s committee of Binh Phuoc province, the Department of Trade and Industry, Department of Statistics in Binh Phuoc province, Vietnam Cashew Association, Department of Crop Production, Processing Department, Southern Agricultural and Technical Institute , the top experts, the farmers, Cashew I processing and export - import enterprises of Binh Phuoc province that have helped me to collect information, documents, answer the survey questions and interviews Moreover, they help me examine and access contents of this research properly, at the same time give new points for the research and limit risks in the business of cashew import and export of the province Sincerely thank you II The Risk Precautions of Cashew Products in Binh Phuoc Province under the WTO Entry Process in the Period from 2011 to 2015 ABSTRACT Binh Phuoc, a mountainous province located in the West of the South East, is a rich basalt soil region, which is suitable for the cultivation of industrial crops such as rubber, cashew, pepper, beans, sesame In recently decades Binh Phuoc has strongly developed cultivation, processing and export Binh Phuoc now has 177 cashew processing enterprises and 298 small processing units, with a total capacity of 47,700 tons per year In 2009, Binh Phuoc exported 18 636 / 177, compared with the country, Binh Phuoc is now known as the capital of the cashew However, in the production of import-export business, cashew enterprises in Binh Phuoc provnce have a lot of risky shortcomings which limit import and export business of the enterprises Therefore, finding a risk factors in the import-export business in Binh Phuoc province, Vietnam is very necessary, and then we should offer solutions that help businesses minimize the risk of losses in import-export business in the WTO entry process during the period from 2010 to 2015 In recent years, the cashew processing and export industry of Binh Phuoc province hass faced many difficulties, such as constant price fluctuation, quality, volatile production, and food safety which does not meet the requirements of importing countries, the level of management and application of scientific and technical advances in this industry are limited and unbalanced The enterprises must always compete fiercely, foreign language skills and management experiences of staff in the process of negotiation, contract drafting, contract signing, transport, method of payment, in commitment contract are still restricted, which leave many risks in the import-export business activities To have a base to research, the study must identify research objectives such as: risk factors relating to nature, to the processing, to export and import activities and even including domestic business Limitations of the research: This research only focuses on the risk factors in the business of import and export of the enterprises in Binh Phuoc province, and then propose some solutions to prevent them III To make orientation for developing this business, the Prime Minister signed Decision No 120/1999/QD-TTg approving the cashew development project in 2010 with the following norms: cashew planting area is 340,000 of, raw cashew production is 230,000 tons, cashew processing output is 45,000 tons, and export output is $220 million The Ministry of Agriculture and Rural Development issued a decision approving the planning of 39/2007/QDBNN cashew sector till 2010 and made orientation to 2020 with key indicators such as: The area is 450,000 ha, raw cashew production is 500,000 tons (imported 150,000 tons), the output of processing is 140,000 tons, export turnover is $ 670 million; people’s committee of Binh Phuoc province issued Decision No 31/2008 / QD-UBND dated 07/08/2008 on approval of the planning sector of Binh Phuoc during the period from 2010 to 2015 and vision of 2020, Decision No 46/2009 on the production, processing under ISO, HACCP, GAP process to meet the requirements of the importing country; decision No 50/2009 on promotion of innovative machinery and equipment in the processing and export and Festival of Gold cashew in Vietnam, Binh Phuoc province was held in the beginning of March in 2010, to introduce and confirm with global enterprises in this industry that Vietnam as well as Binh Phuoc province develop and will develop strongly in cashew business Research methodology: The study was conducted by two methods, which are quantitative and qualitative methods, (1) quantitative methods applied to the objects that are the managers of import and export of processing enterprises, (2) qualitative methods applied to the subjects that are experts, departments, industry associations and the scientists Designing survey questions: From the data collected in Chapter 2, research steps in Chapter and proposed research methods, the study conducted 16 questions for the two groups, group one is business managers, with questions, group is specialists of the departments, associations and scientists, with questions, then sent to five professional experts who are working in the institutes (Southern Institute of Agricultural Science and Technology, HCM institute of mechanics), the professors, doctors are teaching at universities, to assess the structure, content of the questions from the questionnaire, in accordance with the objectives of the research questions of group was printed out with the number of 123 sheets, questions of group was printed 17 sheets and sent to each group (attached list), after 45 days, they were collected (on 15th October, 2010) Following was to classify the answers and decide they were passed or failed on the request of instructions, to conduct and run the program SPSS matrix method for analyzing and processing Basing on the analysis and results of treatment, the study pointed out the risk factors to the processing, import and export business, then proposed solutions and recommendations for the IV processing and import-export business so that they can limit the risks in import-export business in the WTO entry process during the period from 2010 to 2015 Keywords: Cashew Product, Binh Phuoc Province, Risk Precaution, WTO V The Risk Precautions of Cashew Products in Binh Phuoc Province under the WTO Entry Process in the Period from 2011 to 2015 Contents ACKNOWLEDGMENTS I ABSTRACT III Contents VI Tables IX Figures IX Chapter1 Introduction 1.1 Overview of Binh Phuoc 1.2 Research Objectives 1.2.1 Research on risk factors relating to nature 1.2.2 Research on risk factors relating to cashew processing 1.2.3 Research on risk factors relating to export activities 1.2.4 Research on risk factors relating to cashew import 1.2.5 Research on risk factors relating to the processing of domestic business 1.3 The Research Scope and Limitations 1.3.1 Scope of research 1.3.2 Limitations 1.4 Definitions 1.4.1 Definition of risk 1.4.2 Other concepts 1.5 Terminology Chapter Literature Review 2.1 Orientation and Development Results of Vietnam’s Cashew Sector 2.2.1 Development goals 12 2.3 Data Prves That Cashew Business Is a Key Economic Sector 13 Chapter Research Methodology 16 3.1 Research Process 16 3.2 Research Methodology 18 3.2.1 Survey method 18 VI 3.3 Deliver Survey Questionnaire 20 3.4 Validity and Reliability 21 3.5 Questionnaire Design 24 3.6 Collecting the Data 25 3.7 Analytical Methods 25 Chapter Research Results and Analysis 27 4.1 Elements within the Enterprises to Ensure the Sustainable Export 27 4.2 The Level of Interest in Fluctuations of the Domestic and the World Market 28 4.3 The Competitive Advantage of Enterprises in the Cashew Processing Industry in the Province Compared to Other Enterprises in the Country 30 4.3.1 Competitive factors of the brand 30 4.3.2 Competitive factors of advanced technology 31 4.3.3 Competitive factors in management level 32 4.3.4 Competitive factors on capital for export activities 32 4.4 The Risk Level of External Factors Impact on the Business Activities of Enterprises 34 4.5 The Level of Risk in the Process of Buying Raw Cashew in the Country 35 4.6 Assessment of Capability Limiting Business Risks in the Procurement of Raw Cashew in the Country 36 4.6.1 Synthesis of limitation level of risks in buying the raw cashew 36 4.7 The Level of Risks in the Import Process of Raw Products 38 4.8 Ability to Limit the Risks of Importing Raw Cashew 39 4.8.1 The ability to limit risks in foreign trade contract negotiations 39 4.8.2 Limiting the risks of contract performance 40 4.8.3 Synthesis of risk limitation ability in the process of raw cashew import 41 4.10 Ability to Limit the Risks of Cashew Exporting 44 4.10.1 The ability to limit the risks in transporting cashew exports (8b1) 44 4.10.2 The ability to limit the risks in the implementation of the export contract (8b2) 44 4.10.3 The ability to limit the risks caused by lack of foreign language knowledge and communication skills of negotiating staff (8b3) 45 4.11 The Risks of Cashew Manufacture Process for Export 49 4.12 Assessment of the Ability to Eliminate the Risks in the Export Processing 49 4.13 Analyzing and Assessing the Survey Results from the Experts of Departments and the Science Association 53 VII Question 3: Please let me know how your company finds customers? (Choice could be more than one) … By organizing customer events … By marketing research … By participating in fairs or exhibitions … By advertizing … By other way ………………… Question 4: Please evaluate competitive advantages of cashew business enterprises in Binh Phuoc province to the other ones in Vietnam by circling the corresponding numbers in which number denotes very strong, number denotes strong, number denotes neutral, number denotes weak, number denotes very weak Competitive factors Level of competitive advantage Prestige brand name Advanced technology Good management Skilled labor force High capacity and large working places Capital for import-export operations Question 5: Please evaluate risks of external factors influencing business operation by ranking from to (number denotes the most interested in, number denotes the least interested in) Factors Level of Interest Technological barrier Fierce competition Engineering and technology under the required quality standards Anti-dumping cases Acquisition by foreign corporation Question 6a: Please evaluate risks concerning domestic purchasing process of raw cashew by marking X in the corresponding columns in which number denotes the highest level of risk and number denotes the lowest level of risk Level of risk Content Poor quality of raw cashew Competition in purchasing by enterprises outside the province Competition in purchasing by agencies inside the province Increase of purchasing price Variation in foreign exchange Goods delivery and distribution Market changes Payment Question 6b: Please evaluate your enterprise’s capability to limit risks concerning domestic purchasing process of raw cashew by marking X in the corresponding columns in which number denotes the extremely capable, number denotes very capable, number denotes moderately capable, number denotes slightly capable, and number denotes not at all capable Content Capability to limit risk Poor quality of raw cashew Competition in purchasing by enterprises outside the province Competition in purchasing by agencies inside the province Increase of purchasing price Variation in foreign exchange Goods delivery and distribution Market changes Payment Question 7a: Please evaluate risks concerning importing process of raw cashew by marking X in the corresponding columns in which number denotes the highest level of risk and number denotes the lowest level of risk Content Level of risk Negotiating foreign trade contract Implementing import contract Transportation of import goods Giving and receiving import goods Import documentation Lack of knowledge of import goods Communication and foreign language capability used in negotiating Payment of import goods Question 7b: Please evaluate your enterprise’s capability to limit risks concerning importing process of raw cashew by marking X in the corresponding columns in which number denotes the extremely capable, number denotes very capable, number denotes moderately capable, number denotes slightly capable, and number denotes not at all capable Content Capability to limit risk Negotiating foreign trade contract Implementing import contract Transportation of import goods Giving and receiving import goods Import documentation Lack of knowledge of import goods Communication and foreign language capability used in negotiating Payment of import goods Question 8a: Please evaluate risks concerning exporting process of cashew by marking X in the corresponding columns in which number denotes the highest level of risk and number denotes the lowest level of risk Level of risk Content Transportation of export goods Implementing export contract Communication and foreign language capability used in negotiating Delivering, distributing, giving and receiving import goods Social environment concerning export Economic environment concerning export Variation in foreign exchange Payment of export goods Economic crisis Question 8b : Please evaluate your enterprise’s capability to limit risks concerning exporting process of cashew by marking X in the corresponding columns in which number denotes the extremely capable, number denotes very capable, number denotes moderately capable, number denotes slightly capable, and number denotes not at all capable Content Transportation of export goods Implementing export contract Communication and foreign language capability used in negotiating Delivering, distributing, giving and receiving import goods Social environment concerning export Economic environment concerning export Variation in foreign exchange Payment of export goods Economic crisis Capability to limit risk Question 9a: Please evaluate risks concerning processing process of cashew for export by marking X in the corresponding columns in which number denotes the highest level of risk and number denotes the lowest level of risk Content Level of risk Low quality of imported cashew Poor quality of export cashew Export cashew are incompatible with HACCP guidelines adopted by importer’s country Backward machinery, engineering and technology Lack of skilled workers Difficulty in approaching loans for inventory Inconstancy of input materials Lack of space for expanding manufacturing area to enhance capacity Low percentage of automation in processing cashew nut Question 9b: Please evaluate your enterprise’s capability to limit risks concerning processing process of cashew for export by marking X in the corresponding columns in which number denotes the extremely capable, number denotes very capable, number denotes moderately capable, number denotes slightly capable, and number denotes not at all capable Content Low quality of imported cashew Poor quality of export cashew Export cashew are incompatible with HACCP guidelines adopted by importer’s country Backward machinery, engineering and technology Lack of skilled workers Difficulty in approaching loans for inventory Inconstancy of input materials Capability to limit risk Lack of space for expanding manufacturing area to enhance capacity Low percentage of automation in processing cashew nut =END= Thank you for your cooperation! QUESTIONNAIRE FOR EXPERTS A Study on Cashew Business Enterprises in Binh Phuoc Province, Vietnam Dear Sir/Madam As a master student of Graduate Institute of Business and Management, Meiho University, Taiwan, I am conducting a research: “Proactive solutions of risks in importing-exporting cashew operation, Binh Phuoc province, a period of 2011-2015 I appreciate your time and energy spent on answering the questions below concerning cashew business enterprises in Binh Phuoc province As an expert in cashew business, research and management, your answers and ideas certainly are critical data for my analysis aims to seek proactive solutions of risks in importing-exporting cashew operation, Binh Phuoc province, a period of 2011-2015 Such information would be kept in confidential and only used for the research purpose Hopefully receive your response before Oct 15, 2010 Yours sincerely, Tran Van Hue EXPERT GENERAL INFORMATION Organization name:…………………………………………………………… Address: Commune……………………………District ……:…………… Telephone:………………………………… Fax:………………………… Email:………………………………………………………………………… Website:……………………………………………………………………… Interviewee’s name:………………………………………………………… Interviewee’s working position:……………………………………………… … Male Gender: Age: … 30-34 … 35-39 … 40-45 … Female … 46-49 … 50-55 … 56-60 Date of interview …………………………………………………………… BẢNG CÂU HỎI KHẢO SÁT Please answer the questions below by choosing checkboxes corresponding with each alternative that correctly express your idea Question 1: How long have you been working in Binh Phuoc province? … Less than years …15 years - 20 years … years - 10 years … 10 years - 15 years … Over 20 years Question 2: What you think about the investment of cashew development in Binh Phuoc in the last three years? … No investment for expansion … Less investment for expansion … Moderate investment for expansion … Slight investment for expansion … Extreme investment for expansion Question 3: What you think about the development of import-export operations in Binh Phuoc province in the period of 2011-2015 toward 2020? (Please select only one alternative) … Very good development … Good development … Fair development … Poor development … Very poor development Question 4: Please weight opportunities and threats of import-export operations in Binh Phuoc province in the duration of integration WTO and in the period of 2011-2015 by (1) marking X either in Opportunities column or Threat column; and (2) circling the corresponding number which number denotes the highest level of weight and number denotes the lowest level of weight Factor Opportunities Threats Level of weight Investment capital Skilled workers Advanced machine utilities Advanced technology application Promotion policy ISO, HACCP, GMP 5 Marketing research Good quality and quantity cashew Association of cashew Merging and combining enterprises Question 5: Please rank each of the following items in order of competitive advantage of cashew business in Binh Phuoc province in which number denotes the most competitive and number 10 denotes the least competitive … Change on time and application of advanced technology in processing and exporting … Large area, high quantity and good quality of cashew … Soil rich in minerals … Good business investment environment … Variety of promoting and supporting policy … Convenient geographic location … Investment attraction with big hedge funds … Products meet the requirement of ISO … Product quality meets HACC standards … Linkage set up between processing enterprises and import-export enterprises Question 6: To enhance the competitive capability of processing enterprises and importexport enterprises in Binh Phuoc province against other ones in other provinces, what solutions Binh Phuoc province should focus on? (Choice could be more than one) … Issuing open policy of investment … Supporting information for enterprise … Renewing and developing plantations … Enhancing working competency for workers … Promoting capital … Making innovation in administration … Conducting research, equipping new machines, technology and engineering … Populating knowledge of economic global integration … Changing economic structure towards an industry and commerce sector dominated Question 7: What agricultural businesses are key businesses of Binh Phuoc province? Please rank the four businesses below according to their importance in which number denotes the least important, … and number denotes the most important Name of agro-processing industries for export Order of priority Wheat starch Cashew nut Pepper Bean – Sesame =END= Thank you for your cooperation! MEIHO UNIVERSITY (TAIWAN) Evaluation form of experts on structure, language and content from questionnaire survey to managers of cashew import-export manufacturers of binh phuoc province and experts of departments, scientists and associations Dear Sir or Madam: I am a postgraduate student of business and management of Meiho University (Taiwan), I am now working on a thesis: "Measures to give precautions against risks in cashew import and export business of Binh Phuoc province in the process of WTO accession during the period from 2011 to 2015.” I would appreciate if you could Hope help me evaluate in terms of structure, language and content of the questionnaire designed to investigate two groups of subjects in the research Your evaluation results will be an important base for me to adjust the structure, language and content of survey questionnaires to appropriate with the content of the research All personal information will remain a secret; we hope to receive your comments We sincerely appreciate your help Conductor, Tran Van Hue ASSESSOR’S PERSONAL INFORMATION Office: ……………………………………………………… ……………… Address: …………………………… District:……………………………… Telephone:…………………………… FAX:………………………………… Email:………………………………………………………………………… Website:……………………………………………………………………… Consultant’s name:…………………………………………………………… Position :……………………………………………………………………… Gender Age: … 40-45 Date:………………… … Male … 46-49 … Female … 50-55 … 56-60 PART I: ASSESSION ON STRUCTURE, LANGUAGE AND CONTENT FROM QUESTIONNAIRE SURVEY OF MANAGERS OF CASHEW IMPORT-EXPORT MANUFACTURERS OF BINH PHUOC PROVINCE 1/ Please assess the structure of the questions in the questionnaire survey for managers of import / export processing manufacturers Binh Phuoc province At the same time, cross into the box percentage (%) standard level Standard level (%) 20 40 60 80 100 /Please assess the language of the questions in the questionnaire survey for managers of import / export processing manufacturers Binh Phuoc province At the same time, cross into the box percentage (%) standard level Content Standard level (%) 20 40 60 80 100 Question Question Question Question Question Question 6a Question 6b Question 7a Question 7b Question 8a Question 8b Question 9a Question 9b / Please assess the content of the questions in the questionnaire survey for managers of import / export processing manufacturers Binh Phuoc province to consider whether it is consistent with the content of the research topic or not, about appropriate levels At the same time, cross into the box percentage (%) standard level Content Question Question Question Question Question Question 6a Question 6b Question 7a Question 7b Question 8a Standard level (%) 20 40 60 80 100 Question 8b Question 9a Question 9b PART II: ASSESSION ON STRUCTURE, LANGUAGE, CONTENT OF EXPERTS OF DEPARTMENTS, ASSOCIATIONS AND SCIENTISTS 1/ Please assess the structure of the questions in the questionnaire survey for managers of import / export processing manufacturers Binh Phuoc province At the same time, cross into the box percentage (%)standard level Standard level (%) 20 40 60 80 100 /Please assess the language of the questions in the questionnaire survey for managers of import / export processing manufacturers Binh Phuoc province At the same time, cross into the box percentage (%) standard level Content Question Question Question Question Standard level (%) 20 40 60 80 100 Question Question Question / Please assess the content of the questions in the questionnaire survey for managers of import / export processing manufacturers Binh Phuoc province to consider whether it is consistent with the content of the research topic or not, about appropriate levels At the same time, cross into the box percentage (%) standard level Content Standard level (%) 20 40 60 80 Question Question Question Question Question Question Question In conclusion: The questionnaire survey … Suit The research objectives of the study Sincerely thank you! … Not suit 100 ... businesses minimize the risk of losses in import-export business in the WTO entry process during the period from 2010 to 2015 In recent years, the cashew processing and export industry of Binh Phuoc province. .. Export of the Province (c7) .62 Figure 5-1 The Process of Purchasing Raw Cashew of the Enterprises 64 IX The Risk Precautions of Cashew Products in Binh Phuoc Province under the WTO Entry Process. .. business so that they can limit the risks in import-export business in the WTO entry process during the period from 2010 to 2015 Keywords: Cashew Product, Binh Phuoc Province, Risk Precaution, WTO