VIETNAM GENERAL CONFIDERATION OF LABOUR

TON DUC THANG UNIVERSITY
DEPARTMENT OF BUSINESS ADMINISTRATION

SOLUTIONS TO ENHANCE THE EFFICIENCY OF
IMPORT ACTIVITIES AT TAM DUONG TRADING
AND TECHNOLOGY SERVICE COMPANY
LIMITED
Thesis submitted as a requirement for the degree
Bachelor of Business Administration

Supervisor: MBA. PHAM THI NGOC BICH
Student: DINH QUANG HUY
Student ID: 70900327
Intake: 2009 - 2013

HO CHI MINH CITY, July, 2013


VIETNAM GENERAL CONFIDERATION OF LABOUR

TON DUC THANG UNIVERSITY
DEPARTMENT OF BUSINESS ADMINISTRATION

SOLUTIONS TO ENHANCE THE EFFICIENCY OF
IMPORT ACTIVITIES AT TAM DUONG TRADING
AND TECHNOLOGY SERVICE COMPANY
LIMITED
Thesis submitted as a requirement for the degree
Bachelor of Business Administration

Supervisor: MBA. PHAM THI NGOC BICH
Student: DINH QUANG HUY
Student ID: 70900327
Intake: 2009 - 2013

HO CHI MINH CITY, July, 2013


ACKNOWLEDGEMENTS
I would like to send my first thank-you to all lecturers of Ton Duc Thang
University who give me an opportunity to access to real business operation through
my internship. Especially, I gratefully would like to appreciate Miss Pham Thi
Ngoc Bich who directly gives instruction and supports me at the same time, shares
the difficulties and supplies useful knowledge for me. I would like to express my
gratitude for her patience, enthusiasm, devotion that encourage me to complete my
thesis.
Secondly, I am really grateful to employees of Tam Duong Trading and
Technology Service Company Limited who create good conditions for me to get an
internship at the company. All of the employees took interest in me as well as
assisted me during the internship. Everyone in the company gave me a chance to get
access to real activities in business and willingly provides me with the materials
and information serving for my thesis. Thank to all of the assistances above, they
are important parts to contribute to complete my thesis.
Due to the limitation in the time of internship and abundant knowledge, my
thesis certainly has shortcomings more or less. I do hope to acquire the precious
remarks from all lecturers and the company. I do wish the lecturers health and
success and I do hope the company stable development and prosperity.

Student


Đinh Quang Huy


COMMENTS OF SUPERVISOR
Student: Đinh Quang Huy
Class: 09070101

Student ID: 70900327
Intake: 13

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……., July, 2013
Signature


COMMENTS OF EXAMINER
Student: Đinh Quang Huy
Class: 09070101

Student ID: 70900327
Intake: 13

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……., July, 2013
Signature


ABSTRACTS
Import is one of most important elelements in international trade. It
contributes to create conditions for countries all over the world to exchange goods,
services, customs, culture, precious value, etc. Moreover, import helps to enhance
living standard of people owing to the best quality products that are exchanged

between countries.
This research focuses on the issues and solutions to enhance the efficiency of
import activities at Tam Duong Trading and Technology Service Company Limited.
To begin with, all the issues relating to import are mentioned in the literature
review. Furthermore, the current status of the company is reflected from the
analysis of business results and the activities the company is operating. Especially,
by combining the theory composed from famous authors, the current performance
of the company and its advantages and disadvantages, solutions are given as
references for the company to enhance its operation. Moreover, some
recommendations are given to the Government to reform its policies and future
orientation.


Table of Contents
ACKNOWLEDGEMENTS
LIST OF ABBREVIATION
LIST OF TABLES
LIST OF FIGURES
CHAPTER I: INTRODUCTION ............................................................................1
1.1 Introduction ........................................................................................................1
1.2 Rationale ............................................................................................................1
1.3 Research objectives ...........................................................................................2
1.4 Research methodology.......................................................................................2
1.5 Data collection method ......................................................................................4
1.6 Research structure ..............................................................................................4
1.7 Research arrangement ........................................................................................5
CHAPTER 2: LITERATURE REVIEW ................................................................6
2.1 Concepts of import ............................................................................................6
2.2 Types of import ..................................................................................................6
2.3 Functions of import ............................................................................................7

2.4 Roles of import ..................................................................................................8
2.5 Import activities ...............................................................................................10
2.5.1 Determining customers‟ requirements ......................................................10
2.5.2 Selecting resources of supply ....................................................................11
2.5.2.1 Modalities of import transaction selection..........................................11
2.5.2.2 Import contract signing .......................................................................13
2.5.3 Preparing for import ..................................................................................16
2.5.4 Scheduling for trade or use ........................................................................23
2.6 Factors affecting the performances of import enterprises ...............................24
2.6.1 External factors..........................................................................................25
2.6.1.1 Political/legal factor ............................................................................25
2.6.1.2 Economic factors ................................................................................26


2.6.1.3 Social and cultural factors ...................................................................26
2.6.1.4 Technological factors ..........................................................................27
2.6.1.5 Natural resources ................................................................................27
2.6.2 Internal factors ...........................................................................................27
2.6.2.1 Management system and administrative structure ..............................27
2.6.2.2 Human factor ......................................................................................28
2.6.2.3 Marketing activities ............................................................................28
2.6.2.4 Business network ................................................................................28
2.6.2.5 Customer service ................................................................................. 29
2.6.2.6 Infrastructure and facility ....................................................................29
2.6.2.7 Financial factor ...................................................................................29
CHAPTER 3: CURRENT IMPORT ACTIVITIES AT TAM DUONG
TRADING AND TECHNOLOGY SERVICE COMPANY LIMITED ............30
3.1 The profile of Tam Duong Trading and Technology Service Company
Limited ...................................................................................................................30
3.1.1 The history of the company‟s establishment .............................................30

3.1.2 The Process of the company‟s development .............................................31
3.1.3 The company‟s functions ..........................................................................32
3.1.4 The company‟s liabilities ..........................................................................33
3.1.5 Business area .............................................................................................34
3.1.6 Import revenue by products .......................................................................36
3.2 Organizational structure of the company.........................................................38
3.2.1 Organizational structure ............................................................................38
3.2.2 The functions and responsibilities of Departments ...................................39
3.2.2.1 Director ...............................................................................................39
3.2.2.2 Vice Director .......................................................................................39
3.2.2.3 Business Department ..........................................................................40
3.2.2.4 Financial Department ..........................................................................40
3.2.2.5 Technical Department .........................................................................41


3.3. Overview of the company‟s business operation .............................................42
3.3.1 The company revenue, profit and market..................................................42
3.3.2 The company‟s financial status .................................................................44
3.3.3 The company‟s markets ............................................................................46
3.4 Analysing import activities at Tam Duong Trading and Technology Service
Company Limited ..................................................................................................46
3.4.1 Researching the market and seeking customers. .......................................47
3.4.2 Selecting supply sources ...........................................................................48
3.4.2.1 Contract negotiation ............................................................................48
3.4.2.2 Signing contract ..................................................................................49
3.4.3 Implementing import procedures ..............................................................51
3.4.3.1 Booking ship .......................................................................................51
3.4.3.2 Buying insurance ................................................................................51
3.4.3.3 Receiving arrival note .........................................................................52
3.4.3.4 Receiving delivery order (D/O) ..........................................................52

3.4.3.5 Registering customs declaration .........................................................53
3.4.3.6 Inspecting cargo ..................................................................................58
3.4.3.7 Checking, Determining price, taxes and paying taxes. .......................59
3.4.3.8 Receiving cargo ..................................................................................60
3.4.4 Preparing for payment ...............................................................................61
3.4.4.1 Settling payment with foreign supplier ...............................................61
3.4.4.2 Settling payment with domestic customers ........................................62
3.4.5 Delivering goods to local customers .........................................................63
3.4.6 Handling claims .........................................................................................63
3.5 Advantages and Disadvantages of Tam Duong TTS Co, Ltd .........................64
3.5.1 Advantages ................................................................................................64
3.5.2 Disadvantages ............................................................................................64
3.5.3 Competitive ability ....................................................................................65


CHAPTER 4: SOLUTIONS TO ENHANCE THE EFFICIENCY OF
IMPORT ACTIVITIES AT TAM DUONG TRADING AND TECHNOLOGY
SERVICE COMPANY LIMITED ........................................................................67
4.1 The business orientation of the company ........................................................67
4.2 SWOT Analysis ...............................................................................................68
4.3 Solutions for enhancing import activities at Tam Duong Trading and
Technology Service Company Limited .................................................................70
4.3.1 Intensifying marketing activities ...............................................................70
4.3.2 Incessant training and having benefit policies for human resource ..........73
4.3.3 Enhancing customer service policies ........................................................75
4.3.4 Improving distribution activities ...............................................................76
4.3.5 Diversifying supply sources ......................................................................77
4.3.6 Increasing the company‟s financial sources ..............................................78
4.3.7 Putting forward efficient competitive plans ..............................................78
4.3.8 Recommendations for the Authorities.......................................................79

4.3.8.1 Customs Bureau ..................................................................................79
4.3.8.2 Human resource development.............................................................80
4.3.8.3 Improving the legal system, simplifying administrative procedures ..80
CONCLUSION
REFERENCES
APPENDICES


LIST OF ABBREVIATION

B/L: Bill of lading
CFR: Cost and Freight
CIF: Cost, Insurance and Freight
C/O: Certificate of origin
D/O: Delivery order
FCL: Full container load
LCL: Less than container load
L/C: Letter of credit
T/T: Telegraphic Transfer
Tam Duong TTS Co, Ltd: Tam Duong Trading and Technology Service Company
Limited
WTO: World Trade Organization


LIST OF TABLES
Table 3.1 Import revenue by products from year 2010 to year 2012
Table 3.2 The company revenue and profit from 2010 to 2012
Table 3.3: Demonstration of changes of revenue and profit in 2010-2012
Table 3.4: The financial status of Tam Duong TTS Co, Ltd
Table 3.5: List of import taxes for commodities Tam Duong TTS Co, Ltd imports



LIST OF FIGURES
Figure 1.1 SWOT matrix
Figure 1.2 Research structure
Figure 2.1 Import activities
Figure 2.2 Contract implementation
Figure 2.3 Institute cargo clause – summary chart – risk covered/ excluded
Figure 2.4 External and internal environment
Figure 3.1 Industrial machines (Source: Suppliers‟ website)
Figure 3.2 Printing blanket (Source: Kinyo‟s website)
Figure 3.3 Sanko steel (Source: Sanko‟s website)
Figure 3.4 Structure of import products with revenue in the year 2012
Figure 3.5 Organizational structure
Figure 3.6 Revenue and profit of the company from year 2010 to year 2012
Figure 3.7 Total assets status in 3 years (2010-2012)
Figure 3.8 Comparison between Owner‟s equity and Liabilities
Figure 3.9 Import activities at Tam Duong TTS Co, Ltd
Figure 3.10 Electric customs declaration
Figure 3.11 Electric customs declaration


1

CHAPTER I: INTRODUCTION
1.1 Introduction
Being affected by the economic recession in the world, enterprises have to make
special efforts to put forward plans and strategies that help to improve their business
activities to minimize the effect of the economic crisis that can happen anytime in
the future. Especially, after joining in WTO, Vietnam companies have faced much

fiercer competition from globalization. Along with challenges, many opportunities
are opened for enterprises to continually improve and develop their products.
Nowadays, the quality of people‟s standard living is gradually improved. So they
incessantly require high quality products that meet their demands as well as their
preferences. Import and export play an important role in meeting customers‟
demand and the development of a particular country as well.
To perceive the importance of import and export, Tam Duong Trading and
Technology Service Company Limited made a decision to import products from
Japan that obtain high quality and meet the strict customers‟ demand. Moreover, the
company has also become the exclusive distributor for modern industrial machines
originated from Japan. After several years doing business, Tam Duong TTS Co, Ltd
got an important position in providing machines serving for production of
Vietnamese enterprises. However, there are some limitations in the management
and operation of the company. Being aware of these potential products the company
provides in the future, I decide to choose the topic “Solutions to enhance the
efficiency of import activities at Tam Duong Trading and Technology Service
Company Limited” to analyse and find out limitations in these import activities.
1.2 Rationale
Nowadays, in order to get more advantage from the import, importing
enterprises have to get vantage point in all field especially in current fierce
competitive environment. Currently, Tam Duong TTS Co, Ltd expects to
increase profit and value from its import activities. Therefore, the problems that
the company needs to do are how to enhance the efficiency of its import,


2

maximize its revenue and profit as well. In order to achieve these objectives, the
company needs to put forward appropriate and efficient solutions
Some following questions need to be answered from this research:

 How are the current import activities of Tam Duong TTS Co, Ltd?
 What are the main internal and external factors that affect the company‟s
import activities?
 What are solutions to enhance the efficiency of the company‟s import
activities?
1.3 Research objectives
The research aims to:
 Examine the current import activities at Tam Duong TTS Co, Ltd. Base
on this, recognize strengths and weaknesses of the company
 Find out the main internal and external factors that affect the
performance of the company‟s import activities so that the company can
recognize its opportunities as well as threats. Thank to this, the company
can develop appropriate strategies.
 Give solutions to enhance the efficiency of the company‟s import
activities
1.4 Research methodology
Research objectives are foundations to begin with examining and analysing
the import activities at Tam Duong TTS Co, Ltd.
Base on the literature review of import and other factors affecting the import
activities, these theories are considered to be the crucial keys to refer to the
performance of the company in its import operation.
Rely on the current performance of the company‟s import activities,
strengths and weaknesses will be found out. At the same time, opportunities and
threats the company facing will be recognized thank to the internal and external
factors that have effect on the company‟s import activities.


3

Give solutions through appropriate strategies by analysing the strength,

weaknesses, opportunities and threats base on SWOT model.
The SWOT matrix comprises:
Strengths: Attributes of the organization that are HELPFUL to achieving the
objective. These are the company's core competencies.
Weaknesses: Attributes of the organization that are HARMFUL to achieving the
objective. Weaknesses are conditions within the company that can lead to poor
performance.
Opportunities: External conditions that are HELPFUL to achieving the objective.
Opportunities are outside conditions or circumstances that the company could turn
to its advantage.
Threats: External conditions that are HARMFUL to achieving the objective.
Threats are current or future conditions in the outside environment that may harm
the company, and might include population shifts, changes in purchasing, serious
competitive barriers, changes in governmental or environmental regulations, and
others.

Figure 1.1 SWOT matrix


4

1.5 Data collection method
Secondary data which is mainly used in this research comes from:
 Available information from a department of Tam Duong TTS Co, Ltd
including:
 Annual business report from 2010 to 2012
 Import revenue report from 2010 to 2012
 Human resource statement
 Reference to supervisors at Tam Duong TTS Co, Ltd to get more benefit
information served for reinforcing this research.

 Specialist books, article, dictionary which supply information to prove what
is written in this research.
 Internet is the indispensable means of getting the most benefit and valuable
information.
1.6 Research structure
Research
Objective

Literature
Review

Secondary
Data

Current Import
Activities Performance
Analysis

Factors Affecting
Import Activities
Performance

SWOT Analysis

Solutions
Figure 1.2 Research structure


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1.7 Research arrangement
Chapter 1: Introduction – In this chapter, the reason why the topic for this research
is chosen through rationale. Besides, this research presents research objectives and
research methodology to shape the research structure.
Chapter 2: Literature review – In this chapter, the concepts relating to the import
such as import process, the factors affecting import activities, roles of import,
functions of import, techniques in import activities.
Chapter 3: Current import activities at Tam Duong TTS Co, Ltd – This chapter
shows the current performance of the company‟s import activities, along with
analysing the company‟s operation to find out its strengths and weaknesses.
Chapter 4: Solutions to enhance the efficiency of import activities at Tam Duong
TTS Co, Ltd – Base on analysing the SWOT matrix, some solutions will be given to
enhance the performance of the company‟s import activities.


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CHAPTER 2: LITERATURE REVIEW

2.1 Concepts of import
Import is bringing a good or service into one country from another in a
legitimate fashion, typically in use for trade. Along with exports, imports shape the
basics of international trade. Compared to the value of exports, if exports are higher
than imports, a country‟s balance of trade becomes more negative. Import of goods
normally requires involvement of customs authorities in both import and export
country and relates to import quotas, tariffs and trade agreements.
The buyer of such good and service is referred to as an importer who comes
from the country of import whereas the seller in the overseas is referred to as an
exporter.
Imports essentially depend on consumers‟ income in import country and

exchange rate. The higher the consumers‟ income get, the higher the consumers‟
demand for import products become. In case the exchange rate increases, the price
for buying products by domestic currency is higher. Therefore, the demand for
import begins to decrease.
For meeting the customers‟ demand in domestic nations, import activities
become more and more developing with very high speed. Some benefits import
brings in such as: job creation, customer satisfaction, tariffs for the government,
relationship expansion with foreigners…
2.2 Types of import
There are two types of import, including:
Business-owned (direct) import: is a kind of import in which an enterprise
is directly provided with import licence and come forward to sign and implement
foreign trade contracts by its own capital, then directly create distribution channels
with the target of profit.
Due to its own direct operation, the enterprise must incur all risks, profits and
losses. Therefore, in order to operate efficiently, this requires enterprises to be


7

careful in each step of business from market research to sales and money collecting
activities.
For this kind of import, the enterprise only needs to sign contract with foreign
enterprise. Other relating contracts will be drafted after that.
Entrusted import (indirect): is an import activity in which the buyer does
not come forward to sign foreign trade contract but sign an entrusted contract with a
foreign trade enterprise to entrust for that enterprise on behalf of the buyer to sign
the contract by the capital of the buyer (importer). The importer will pay the
entrusted enterprise a certain amount of fee which is called “entrusted fee”
commonly 1-2% of the contract value.

For this kind of import, import enterprises (entrusted enterprises) do not need to
use its capital, request for quotas (if any) or research market. They just on behalf of
entrusting enterprises come forward to sign contracts, doing customs procedures,
also make claims and require indemnity in case of losses.
Entrusted enterprises have rights to count import quotas, not revenue and
turnover. Besides, they have to compose two contracts:
-

Purchase contract with foreign enterprise

-

Entrust contract with entrusting enterprise

2.3 Functions of import
Import activity contributes to enhance the efficiency of national economy by
exchanging goods and services combining with using the ability and comparative
advantage of international labour allocation and capacity of countries all over the
world.
Import activity exploits the capacity and position of strength of goods,
technology, capital, labour…from the countries in region and in the world. This
helps to accelerate production process and domestic consumption. Base on this, the
production in domestic nation can acquire the progress of technology and science
from the world, on the same time consumers can use the best products and services
with appropriate price.


8

Import activity makes the using value structure of gross national products

change in accordance with production development and people‟s living standard
enhancement. Import activity contributes to make the national economy develop in
harmony, in balance and obtain high economic speed.
Import activity helps developing countries to hasten the process of economic
association, market expansion and business partners. Besides, it contributes to
guarantee stable economy and politics.
The development of import activity will help other economic foreign affairs
activities to develop such as: international telecommunication, systems of
international financial credit, tourism… besides, cooperative policies and
international investments also increase.
Import activity creates good conditions to attract more big investment. This
helps to develop domestic production, eventually increase the nation‟s balance of
trade and obtain trade surplus.
2.4 Roles of import
Import is one of the most important activities in international trade. It has an
direct influence on production status and people‟s life. Thank to import, modern
facilities and advanced technologies will be fortified for production process.
Especially, consumers can use products that domestic nation can not produce or can
produce without meeting customers‟ demand. Import activity comprises the
following main roles:
For the world economy
Thank to import activities, countries all over the world have opportunities to
learn about custom, culture, politics of one another. This helps to hasten the process
of economic integration between countries, exploit thoroughly a country‟s
comparative advantage and use labour and natural resources appropriately.
Import activity will help to stimulate production and consumption in a country.
This contributes to increase the world‟s requirements and volume og goods.
People‟s living standard will be upgraded.



9

Import activity helps undeveloped and developing countries get more
experiences in management, acquire advanced technical accomplishment. These
things will help to serve for the target of country‟s industrialisation and
modernization.
For Vietnam’s economy
Vietnam is a developing country. Therefore, import is an essential activity to
serve for the process of economic development and accelerating the process of
country‟s modernization. As a result, import plays an important role in the
development of Vietnam‟s economy.
Importing construction devices helps take shortcuts to build the facilities. The
economy will be equipped with modern devices and machines. Therefore, the
labour will be upgraded with professional skills and steady knowledge. The
management will be improved and acquired step by step.
Goods import will help to diversify commodity categories. Consumers have
many choices that are suitable with their incomes. This will improve and raise
people‟s living standards.
Thank to import, weak production enterprises in domestic nation will be
eliminated. Therefore, import activity will be a motivation for the enterprises to
reform and renovate their technologies as well as the management to enhance the
competitive ability. Domestic companies will gradually control the market and
come to export.
Import activity will be an opportunity for Vietnam to expand its diplomatic
relationship with other countries. Owing to this, Vietnam can court other countries‟
support.
For Vietnam’s enterprises
Import is a challenge for enterprises to renovate its technologies, improve its
product and service quality to increase the competitive power of domestic products.
Therefore, the productive efficiency will be enhanced, unemployment will be

decreased and worker‟s living standards will be improved.


10

As a part of international trade, import is of complexity that are exchanges in
culture, custom, language between nations. For this reason, enterprises need to
continually improve and innovate their business administration, individuals need to
acquire knowledge, study from developed countries and try to enhance their
professional competence.
Import activity helps enterprises to strengthen its influence and prestige in both
domestic nation and the overseas. Profits are brought in from import assist to build
infrastructure and facilities, expand business area in depth and width, contribute to
create more jobs for people, improve employees‟ living standard, solve social
urgent matters…
2.5 Import activities
The import process consists of determining the requirements of market,
selecting resources of supply, preparing documents for import and scheduling for
trade or use.

Determining
customer’s

requirement


Selecting
resources of
supply


Preparing for
import

Scheduling
for trade or
use
Figure 2.1 Import activities
2.5.1 Determining customers’ requirements
Market plays an important role in survival of an enterprise, because market is
the overall relationship of the circulation of goods and currency. Through market,
enterprises can predict the supply and demand to put forward appropriate business
plans. Some enterprises with their flexibility and sharp-witted reaction to the market


11

help their business to succeed, on the contrary, the others with limited knowledge of
market resulted in bankruptcy. Therefore, for enterprises, especially import ones in
order to do business efficiently, need to have a thorough grasp of factors of market,
have knowledge about the motive laws of market, so they can opportunely react to
the changes of market. The tasks for import enterprises to research include:
-

Import goods research

-

Market research and factors affecting the capacity of the market

-


Supply and demand research and its fluctuation

-

Import price research

-

Lowest import price determination in the market

With right analysis on the factors affecting prices, their fluctuation can be
controlled. Base on this, import prices are able to be determined in the market that
an enterprise does business.
In case the import goods are common and have many transactions, the enterprise
need to refer to the market price in the world, examine transportation fees, import
prices in the past to decide to increase or decrease the price when dealing.
2.5.2 Selecting resources of supply
Selection of good suppliers helps the company to enhance its prestige and
decrease some kinds of fees. The company can actively understand the quality of
product, time of delivery. Therefore, an appropriate price will be given to satisfy
customers. There are some popular resources for the company to select suppliers.
2.5.2.1 Modalities of import transaction selection
 Common transaction
This is a kind of transaction implemented anytime and anywhere. The
relationship between the buyer and seller is created through a meeting or
correspondence to discuss and reach an agreement in provisions. The content of this
transaction is carried out on voluntary spirit without any ties with previous
transactions, purchasing and selling are not necessarily associated.



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 Transaction through intermediaries
There is a third party playing as an intermediary between the buyer and seller
in this kind of transaction. The common intermediaries in the market include agent
and broker.
Agent is a natural person or legal entity who implement activities according
to order of entrusting enterprises. The bind between the agent and entrusting
enterprise is entrusted contract.
Broker is intermediate merchant who is entrusted by the buyer and seller.
The broker when does his tasks, has no right to come forward under his name, does
not possess the goods and take responsibility for customer‟s contract
implementation. The relationship between the entrusting enterprise and the broker
bases on short-term entrusted contract not long-term contract.
Comparing to agents, brokers understand more about the market, laws, local
custom. However, some limitations exist such as: direct connection with customers
and the market, shared profits…
 Transaction at goods exchange
Goods exchange is a special market in which people can sell and buy goods
with big volume, same and replaceable features through broker appointed by goods
exchange. The price announced here is considered as a reference in determining
international price.
 Transaction at trade fair and exhibition
Trade fair is a market organized periodically in a certain period of time. At
here, sellers display their goods and sign contract with buyers.
Exhibition is a display to introduce the achievement of economy or organize
a certain industry. Nowadays, exhibition is not only a place for goods display but
also a place for businessmen and economic organization to meet and sign specific
contracts.