recommendations to improve agricultural export to eu market of kibaco co ltd

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UNIVERSITÉ DE NICE-SOPHIA ANTIPOLIS Institut d'Administration des Entreprises

Campus Saint-Jean d’Angély

24, Avenue des Diables Bleus – 06357 NICE cedex 4 Tél. : 04 92 00 11 01 – Fax : 04 92 00 11 43

Academic Year 2009 - 2011

THE INTERNSHIP ON

RECOMMENDATIONS TO IMPROVE AGRICULTURAL EXPORT TO EU MARKET OF KIBACO CO., LTD.

Place: Bac Ninh province

Company name : Kibaco Co, Lt.

Company Supervisor:

Mr Pham Thanh Hai – Director

Professor Pham Huy Dung

Submitted by: NHAN, Nguyen Thanh - AMI 1 Class

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UNIVERSITÉ DE NICE-SOPHIA ANTIPOLIS Institut d'Administration des Entreprises

Campus Saint-Jean d’Angély

24, Avenue des Diables Bleus – 06357 NICE cedex 4 Tél. : 04 92 00 11 01 – Fax : 04 92 00 11 43

Academic Year 2009 - 2011

THE INTERNSHIP ON

RECOMMENDATIONS TO IMPROVE AGRICULTURAL EXPORT TO EU MARKET OF KIBACO CO., LTD.

Place: Bac Ninh province

Company name : Kibaco Co, Lt.

Company Supervisor:

Mr Pham Thanh Hai – Director

Professor Pham Huy Dung

Submitted by: NHAN, Nguyen Thanh - AMI 1 Class

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ACKNOWLEGEMENT

First of all I would like to express my great gratitude to my thesis supervisor, Mr Pham Huy Dung. I am indebted to him for his constructive suggestions and helpful recommendations during the progress of writing the internship report. Without his constant guidance, the report would have never been completed.

I am also thankful to Kibaco Co., Ltd. board of management and staff for their collaboration and help during my internship period. They all contribute to my successful completion of the report.

Author: NGUYEN THANH NHAN Class: AMI1

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ABSTRACT

In this paper, the author addresses the issue of giving recommendations for the improvement of agricultural export to EU market of Kibaco Co., Ltd.. The analysis is largely based on the information collected during the internship period in Kibaco Co., Ltd. which began on 1stJune 2011 and ended on 15th October 2011 as well as the knowledge learnt during the course of AMI. The report, first of all, goes through the overall information of the company including establishment and development, missions, markets and products, financial status, organizational structure, main responsibilities and rights of each department. Then, it reviews some main assigned tasks related to the internship of the author and the AMI course. After that, the export status of the firm is analyzed and finally the main issue of the report is conducted. The main goal of the report is to examine the export of agricultural products of the company in terms of export turnover in products and markets, whereby, raises some proposals for the development of Kibaco Co., Ltd.

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TABLE OF CONTENT

ACKNOWLEGEMENT ... 2

ABSTRACT ... ii

INTRODUCTION ... 1

CHAPTER 1: AN OVERVIEW OF KIBACO CO., LTD... 2

1.1. Establishment and development history... 2

2.2. Functions of each department ... 10

2.2.1. Responsibilities and rights of Director ... 10

2.2.2. Responsibilities and rights of Deputy Director ... 10

2.2.3. Responsibilities and rights of Administration Department... 10

2.2.4. Responsibilities and rights of Sales Department ... 10

2.2.5. Responsibilities and rights of Supply Chain Department ... 11

2.2.6. Responsibilities and rights of Accounting Department ... 11

2.2.7. Responsibilities and rights of Production Management Department ... 11

2.2.8. Responsibilities and rights of Technology Department ... 11

CHAPTER 3: AUTHOR’S MISSION DURING THE INTERNSHIP PERIOD IN KIBACO CO., LTD. ... 13

3.1. Author’s tasks in the company ... 13

3.1.1. The position of the author ... 13

3.1.2. The main tasks of the author ... 13

3.1.3. The expected contributions of the author for the company ... 16

3.2. Application of theoretical knowledge to the tasks ... 16

CHAPTER 4: AN ANALYSIS OF AGRICULTURAL EXPORT STATUS OF KIBACO CO., LTD. TO EU MARKET ... 19

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4.2.1. Export turnover ... 22

4.2.2. Agricultural product structure of the company to EU market ... 23

4.2.3. Agricultural export market structure of the company to EU... 24

4.3. The objectives of Kibaco Co., Ltd. to improve agricultural export to EU market in the near future ... 25

4.3.1. In terms of export production ... 25

4.3.2. In terms of export value ... 25

CHAPTER 5: CONCLUSION ... 26

5.1. Major interests and elements important for the company ... 26

5.1.1. The contributions of the author for the company ... 26

5.1.2. Some positive and negative points of the author during the internship ... 26

5.2. Recommendations to improve agricultural export to EU market of Kibaco Co., Ltd. in some upcoming years ... 27

5.2.1. Perfect input supply ... 27

5.2.2. Focus on improving the products’ quality ... 28

5.2.3. Use effectively Marketing-mix strategy ... 28

5.2.4. Train the human resources ... 29

REFERENCES ... 0

LIST OF TABLES ... 1

LIST OF FIGURES ... 2

LIST OF SYMBOLS ... 3

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INTRODUCTION 1. Rationale of the report topic

There are many reasons why the author decided to analyze the issue. First of all, the company has exported agricultural products to EU market for years but there has not any analysis on the current situation so as to find good solutions for development. As all know, the requirements of EU market are severe. Despite knowing that fact, the firm has not tried to do a real piece of research on how to improve the agricultural exports to EU market. It is a chance to the author to devote to the development of the enterprise during the internship time. In addition, the author wants to get a deeper understanding on Kibaco Co., Ltd. export status and the linkage between the reality and theory studied during the master course.

2. The objective of the study

The main objective of the study is to give some recommendations to improve agricultural export of the company to EU market.

Therefore, the report will have to answer the following research questions. First, what is the current situation of agricultural export to EU market of Kibaco Co,. Ltd.? Second, what are the positive and negative points of the company’s agricultural export status to EU market? Third, what should be done to improve agricultural export of the company to EU market?

3. The object and scope of the study

The object of the study is the current export status of agricultural products of Kibaco Co., Ltd. to EU market and the scope of the study is within Kibaco Co., Ltd., particularly Sales and Accounting Department.

4. Methodology

The author uses two main sources of data collection including both primary and secondary sources. The former includes face-to-face conversation with the Director of the company as well as related staff in Sales and Accounting Departments together with direct connection with taks in Sales Department such as contacting with customers, getting database, etc. The latter consists of some textbooks, website links and company’s reports.

5. The structure of the report

The report is formatted into five main chapters as follows:

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Kibaco Co., Ltd. is a company located in Que Vo Industrial Zone, Que Vo District, Bac Ninh Province. Thanks to the support of local authorities, the company went into operation in May 2006 under the establishment decision number 0103003529 of 12 January 2004 with the total capital of a hundred billion VND and floating capital of fifty billion VND. The main mission of the company is to supply agricultural products and processed food for export. The firm has tax code number 2300248781 which was issued the first time in May 2005 and the sixth time in May 2010 at Bac Ninh Planning and Investment Department.

Kibaco Co., Ltd. is set up basing on investment call of polling by private economic units in agricultural manufacturing and export. Since establishment and operation, the firm has always achieved its goals thanks to the efforts of its workers and staff. The input of the company comes mainly from the province and the neighboring areas.

With the purpose that quality and prestige are the priorities, the firm continues improving technology to apply to manufacturing as well as training workers’ skills so as to develop products’ quality. As a result, the company has succeeded in supplying agricultural products to many countries all over the world such as Germany, Russia, Italy, etc.

Some highlighted information on establishment and development history of Kibaco Co., Ltd. are summarized as follows:

• Company’s name: KIBACO Co., Ltd.

• International transaction’s name: KIBACO COMPANY LIMITED

• Business location: Que Vo Industrial Zone, Que Vo District, Bac Ninh Province • Establishing date: 6 May 2005

• Operating date: 6 May 2005

• Governing body: Bac Ninh Tax Bureau

• Certificate of business registration number: 2300248781 • Tax code: 2300248781

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First issued on 6 May 2005 and sixth issued on 14 May 2010 at Bac Ninh Planning and Investment Department

• Email: • Website: www.kibaco.com.vn

1.2. Missions

The main mission of the company is “to bring customers the best products with international hygienic standard” and the criterion is “Products’ quality and food safety are top-ranking”. Therefore, the firm has established a testing system to ensure domestic and international standards. Quality inspection is always paid full attention on, from input through process to output, from the beginning till the end. The company has hired many state-of-the-art facilities as well as high-qualified engineers to constantly inspect the quality of the products so as to accomplish the mission set.

Moreover, in order to perform such mission, the company has to carry out the following functions. Firstly, it should base on the government’s policies to build up both short-term and long-term business schedules as well as ways to finish such plans, take responsibilities for signed contracts and customers. Secondly, it should do research on agricultural markets and set up suitable marketing strategies. Thirdly, it should take advanced technical facilities into application to manufacture more and more high-quality products to meet customers’ satisfactions. Finally, it should focus on training technical specialist skills as well as management knowledge to its personnel and leaders. In addition, effective use of current assets, facilities, capital and labor and the development of the company’s capital are necessary.

1.3. Markets and main lines of products

With the above-mentioned mission, the company has been successful in exporting agricultural products to many demanding nations such as Germany, Russia, Italy, The Czech Republic and so forth.

The firm provides customers with a wide range of agricultural products and processed food which is shown clearly in the following table:

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Canned salted vegetables Canned bean spouts Canned pineapple Canned jackfruit Canned garlic Canned corn Canned litchi Canned indigo

2 Rice products

Rice noodle Rice vermicelli Rice flour Rice paper

3 Bean products

Cashew nut Cinnamon Sesame Peanut Black bean Green soy

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Regarding technical facilities, there are appropriate modern machines and equipment as well as conveyor systems to support manufacturing under high-tech process so as to finish production in a fast and efficient way. In addition to that, infrastructure such as means of transport, warehouse, factory, etc. meets the quality standards.

Thanks to such conditions, the company has got a great number of revenue. The following table shows the company’s revenue from 2008 to 2010 in terms of each product as well as total revenue.

Table 1.2: The company’s revenue from 2008 to 2010

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The revenue of Kibaco Co., Ltd. can also be indicated in the following chart and graph.

Figure 1.1. The company’s revenue from 2008 to 2010 in terms of products

Source: Company’s Accounting Department

Figure 1.1 gives information of the company’s revenue in terms of products within the period of three year from 2008 to 2010. As can be seen, the period experienced a sharp increase in revenue of peanut while a slight rise was witnessed in that of canned egglant 500ml. The adverse trend was seen with the revenue of dried mushroom Moreover, although the revenue of canned cucumber 680ml decreased moderately in 2009, the number went up by nearly double in 2010.

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Figure 1.2. The company’s total revenue from 2008 to 2010

Source: Company’s Accounting Department

Figure 1.2 illustrates the total revenue of the company between 2008 and 2010. It is easy to make conclusion that the revenue increased gradually each year with the highest number was in 2010 with well under five billion VND.

In conclusion, Chapter 1 has provided the overall information on Kibaco Co., Ltd. such as establishment and development history, missions, markets, main lines of products as well as financial status. Chapter 2 will then go into details about the organizational structure of the company.

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Figure 2.1: The company’s organizational structure

Director

Deputy Director

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2.2. Functions of each department

2.2.1. Responsibilities and rights of Director

The Director of the company has his own rights as well as responsibilities. Acting as the leader of the whole company, he has to take responsibilities in drawing up development strategies for the company, generally operating the firm, directly or indirectly taking part in manufacturing and selling process, approving business plans, negotiating for commercial contracts, assigning liabilities and authorities of each department in the company, and accomplishing other duties regarding regulations of the enterprise.

Beside the responsibilities, the Director of the company reserves the rights to make decisions on the company’s operation, to allocate duties so as to carry out business and investment plans of the company, to promulgate regulations, to appoint or dismiss managing titles in the firm, and to do other tasks with refer to the company’s statutes.

2.2.2. Responsibilities and rights of Deputy Director

It can be seen from the diagram that the Deputy Director plays a significant role in managing all Departments of the company. His responsibilities are together with the Director to schedule for the development of the company, to take charge of controlling the company’s operation, to directly join the production and business activities of the firm, and to divide the blame for each individual in each Department.

Moreover, the Deputy Director reserves the right to have the full power of the Director when he is away provided that he obtains the letter of attorney in writing from the Director.

2.2.3. Responsibilities and rights of Administration Department

The Administration Department of the enterprise has a huge number of responsibilities. Firstly, it acts as a counselor for the Director, which plays an important part in running the company. Secondly, it manages and stores the documentaries and data for the firm’s operation. Thirdly, it administers assets, office’s activities, staff, etc. Moreover, the most important liability of the Department is to bear the blame for all the wrong actions towards the Law of the Government as well as the regulations of the company.

In addition, this Department has the rights to treat the employees who break the regulations on behalf of the Director and to make rise or reduction in the staff’s salaries and wages.

2.2.4. Responsibilities and rights of Sales Department

The Sales Department’s responsibility is, first of all, to set up customers’ database and filter the potential ones. Also, it is responsible for contacting with customers, directly making

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plans and negotiating on prices, expenses, etc. Finally it takes responsibility in reporting the Director about the assigned tasks.

Furthermore, the rights of the Department are to require the support from the Director upon finishing the assigned affairs and to make agreement on prices on the condition that it has to inform the company’s Board of Management.

2.2.5. Responsibilities and rights of Supply Chain Department

While Sales Department deals with customers and output, Supply Chain Department settles the matters of suppliers and input. Its main responsibilities are to make list of and filter the targeted suppliers as well as take negotiation on contracts relating to materials and processing. Also, it is responsible for the prices and expenses of the input and reporting to the Director.

Similar to the rights of the Sales Department, the Supply Chain Department takes the rights to ask the Director for support and to consult the Board of Management for the agreement on prices with suppliers.

2.2.6. Responsibilities and rights of Accounting Department

The Accounting Department is to control the company’s expense, withdraw debts together with calculate salaries and wages and other payables within the firm. Moreover, it has to do accounting operations as regulated such as monthly report, annual financial report and so forth. The most important responsibility of the Department is to set up plans for each month, each quarter and each year if necessary. Utterly, it is to inform the Director about the results of assigned tasks.

The Department’s right is to refuse to make payments if those are not suitable for the regulations and accounting principles.

2.2.7. Responsibilities and rights of Production Management Department

The very first responsibility of the Production Management Department is to point out and fulfill the production norm for each type of product. In addition, it has to conduct the production process and inspect the quality as assigned by the Director. After that, the Department has to report the results to the Director.

Moreover, it reserves the rights to ask the Director for help during the production

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CHAPTER 3: AUTHOR’S MISSION DURING THE INTERNSHIP PERIOD IN KIBACO CO., LTD.

3.1. Author’s tasks in the company

3.1.1. The position of the author

During the internship period in Kibaco Co., Ltd., I was appointed as a Sales Officer working in Sales Department. My vacancy was to deal with customers’ database, contact with customers, set up business plan for the company and other related deeds.

3.1.2. The main tasks of the author

Specifically, I was assigned to study about export, export of agricultural products, EU market, agricultural export to EU market in general and of the company in particular, export situation of the company through data provided by Accounting Department and give some recommendations to improve agricultural export of the firm to EU market.

These assigned tasks closely linked to the subject matter as the objectives of the study, as mentioned at the beginning of the report are to answer the three questions including what the current situation of agricultural export to EU market of Kibaco Co,. Ltd. is; what the positive and negative points of the company’s agricultural export status to EU market are; and what should be done to improve agricultural export of the company to EU market.

The first month of the internship was for the author to find out more about the company, get acquaintance with documents and data in Sales Department as well as learn about export and export of agricultural products in general so as to have a gist of what the company was doing and an overall information on the main type of business that the firm was dealing with.

In the second month, the author continued to be assigned to learn about EU market and agricultural export to EU market.

In the third month, the author was required to coordinate with Accounting Department on behalf of Sales Department so as to analyze the agricultural export status of the company to EU market over the past three years.

In the next month, after fully understanding about the company’s situation and the overall information of the market, the author was asked to point out the strengths and weaknesses of the firm in terms of agricultural export as well as figure out some targets for

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