34 a STUDY ON FACTORS AFFECTING BUSINESS ACTIVITIES AT GLOVIMEX COMPANY LIMITED

MINISTRY OF FINANCE
ACADEMY OF FINANCE
--------------------

Student: ĐỖ THỊ NGỌC
Group: CQ55/51.05

GRADUATION THESIS
TOPIC:
“A STUDY ON FACTORS AFFECTING BUSINESS ACTIVITIES AT
GLOVIMEX COMPANY LIMITED”

Major

: Faculty of foreign language

Student code

: 17522202010154

Supervisor

: M.A Bui Thi Tuyet Mai

Hanoi – 2021


Academy of Finance

Graduation Thesis
DECLARATION

I, Do Thi Ngoc, hereby declare that this thesis and the study presented in it are
my own and have been generated by me as a result of my own original research, no
copying on any prior work.
Thesis: “The study on factors affecting business activities in Glovimex
company limited”
Hanoi, May 2021
Student

Đỗ Thị Ngọc

Đỗ Thị Ngọc CQ55/51.05

2


Academy of Finance

Graduation Thesis
ABSTRACT

The study researched the factors affecting business activities in Glovimex
Company Limited. The paper aims at finding out the achievements and drawbacks
in Glovimex Company limited business activities, and more importantly, suggesting
main methods to improve the business’s value and efficiency in general and Rattan
and bamboo products in particular. In order to achieve these aims, the graduation
paper surveys the current performance of export activities in the company and point
out whether it is effective or not. From received results, the study argues the most
practical implications in Glovimex Company Limited to improve the efficiency of
export activities at the company in the future years.

Đỗ Thị Ngọc CQ55/51.05

3


Academy of Finance

Graduation Thesis
ACKNOWLEDGMENTS

I would like to express my deep gratitude to all those who have given me the
possibility to complete this graduation thesis. In preparing this graduation thesis, I
have had generous help and advice from my teachers, my colleagues, my family and
my friends. I would like to express my great thanks to all of them.
To begin with, I would like to express my deepest gratitude to my supervisor,
M.A. Bui Thi Tuyet Mai, lecturer of Academy of Finance, for her guidance and
instructions. It is whole-heartedly appreciated that your great advice for my study
proved monumental towards the success of the study.
Besides, I wish to show my sincere thanks to all my teachers at Academy of
Finance, who have provided me with worthy lessons throughout 4 years of study.
Moreover, I am indebted to the staffs of Glovimex Company Limited for their
valuable supports during the internship. I am extremely thankful and indebted to
them for sharing expertise, and sincere and valuable guidance and encouragement
extended to me.
Furthermore, I would like to send my loving thanks to my family whose great
love and care in both spirit and health to encourage me to complete the thesis.
Last but not least, I also place on record, my sense of gratitude to one and all,
who directly or indirectly, have lent their hand in this thesis.

Đỗ Thị Ngọc CQ55/51.05

4


Academy of Finance

Graduation Thesis
LIST OF ABBRIVIATION

1.
2.
3.
4.
5.

GDP: Gross Domestic Product
NTFPs: Non-Timber Forest Products
SBV: State Bank of Viet Nam
VND: Vietnam dong
USD: United States Dollar

Đỗ Thị Ngọc CQ55/51.05

5


Academy of Finance

Graduation Thesis

LIST OF FIGURES AND TABLES
List

Figure 2.1: Organization of management of Glovimex company

Đỗ Thị Ngọc CQ55/51.05

6

Pag
e
27


Academy of Finance

Graduation Thesis
TABLE OF CONTENTS

Đỗ Thị Ngọc CQ55/51.05

7


Academy of Finance

Graduation Thesis
INTRODUCTION

1. Rationale of the study

Economic development is always the top target of all countries in the
world. Especially, in the current process of economic integration, stable
development is a crucial goal for each country in order to improve its
competitiveness in the international market. It can be seen that enterprises are not
only business entities, but also decisive factors for the development of the country.
Production and business activities of enterprises are the factor driving the national
economic growth. And one of the most effective forms of business is the importexport activity. Import-export business is an indispensable activity in the
development process, which is an inevitable result of the trade liberalization.
Therefore, any country that wants to be powerful must join this field. In Vietnam, in
recent years, there are many small and medium enterprises participating in this
field. As a business operating in import-export business, GLOVIMEX company
limited has achieved certain successes in the economic market. With the goal of
becoming a big domestic enterprise, the Company has been doing its best to be able
to improve efficiency for the business. But in reality, during my training time and
experiences I got from the internship, I find that there are still certain difficulties
and the less optimal business efficiency. Therefore, I have chosen the topic "a study
on factors affecting business activities in Glovimex company limited". With the
hope that the factors mentioned in the thesis will help partly find the shortcomings,
then offer timely solutions and improve the efficiency of business activities.

2. Aim of the study
The aim of this study is to understand the current factors affecting business
activities in Glovimex company limited and therefore, to suggest strategies and
solutions to improve and strengthen the efficiency of Exporting activities in
Glovimex company.

Đỗ Thị Ngọc CQ55/51.05

8

Academy of Finance

Graduation Thesis

3. Research question of the study
The following question guide the study:
1. What factors affecting business activities in Glovimex Company Limited?
2. What strategies are being used by the company that have effective and
viable exporting activities?
3. How to improve the efficiency of exporting activities in Glovimex
Company Limited?

4. Methods of the study
Based on knowledge at university, books and self-accumulation and to these
above objectives, several methods of studying the thesis are used as follow:

- Figure collection: from websites of Glovimex company limited, books, internet and
-

internal information of the corporation.
Inductive, deductive and statistical method
Figure comparison, data evaluation, judgment and conclusion.
Method of analyzing, summarizing, synthesizing materials and books from the
theoretical background.

5. Scope of the study
The study is performed at Glovimex Company Limited, No. 47 Nguyen
Hong Street, Dong Da District, Hanoi city, Vietnam. The study is based on data
provided by the company from 2017 to 2020. The object of the study is business

activities at Glovimex Company Limited.

6. Organization of the study
Besides the Introduction, Conclusion and References, the thesis includes 3
chapters:
Chapter1: Theoretical background of import – export activities; General
overview of bamboo rattan handicraft products export

Đỗ Thị Ngọc CQ55/51.05

9


Academy of Finance

Graduation Thesis

Chapter 2: Factors affecting to business activities in the company: The
main part of the thesis which gives the general overview of business activities and
the factors affecting business activities in this corporation.
Chapter 3: Some solutions to improve efficiency of business activities in
Gloximex company limited: This chapter gives the orientations for the future
development of Glovimex Company and provides some practical recommendations
and solutions to improve the efficiency of export activities of this company.

Đỗ Thị Ngọc CQ55/51.05

10

Academy of Finance

Graduation Thesis

CHAPTER 1: THEORETICAL BACKGROUND OF EXPORT
ACTIVITIES; GENERAL OVERVIEW OF BAMBOO RATTAN
HANDICRAFT PRODUCTS EXPORT
1.1.

Overview of export activity

1.1.1. Definition of export activity
Export means the sale of goods or the provision of services to a foreign
country on the basis of using currency as a means of payment.
Export is the activity of selling goods to foreign countries which is not
only an act of individual sale but also an organized sales system both inside and
outside in order to make profit, promoting developing, transforming economic
structure, stabilizing and gradually improving people's living standards. Export is an
easy business activity to have dramatic results. Expanding exports is to increase
foreign currency revenues, facilitate imports and promote export-oriented economic
sectors, and encourage economic sectors to expand their exports with the aim to
create jobs and increase foreign currency revenue.
The basis of export activities is the sale and exchange of goods, including
both tangible and intangible domestic goods. As production develops and the
exchange of goods between developed countries, the international division of labor
resulting from this activity will help extend beyond national borders, the domestic
market with export processing zones in the country. Export activities are
indispensable activities of countries in the development process. The difference in
natural conditions, geographical location, human resources, and resources leads to
differences in advantages in different fields of countries. to maximize advantages

and overcome limitations, take advantage of opportunities and limit challenges to
create equity for factors in the production and consumption process. countries must
exchange goods and services for each other. However, exports do not only take
place between countries that have advantages in one sector or another, but even
when countries do not have advantages in natural conditions, resources, and natural

Đỗ Thị Ngọc CQ55/51.05

11


Academy of Finance

Graduation Thesis

resources. These countries can still reap the significant benefits when participating
in export activities
1.1.2. The role of export activity
The export of goods is the activity in the distribution and circulation by an
extensive process of re-production with the aim of linking production with
consumption by one country with another. That activity takes place not only
between individuals, but also involves the participation of the entire economic
system with the regulation of the state. Goods export is the global trading activity.
Commodity exports play a great role in the socio-economic development of each
country. How a country's social production develops depends greatly on export
activities. Thanks to exporting, it is possible to increase foreign currency revenues,
improve the balance of payments, increase budget revenues, stimulate technological
innovation, transform economic structure, create jobs and improve living standards
of citizen. For countries with low economic level like our country, the potential
factors are natural resources and labor, and the shortage factors such as capital,

market and management capacity. The export-oriented strategy which is essentially
the economy's open solution to take advantage of foreign capital and technology,
and combine them with the domestic potential of labor and natural resources to
create strong growth for the economy, contributing to shortening the gap with rich
countries. In particular, export plays a role in the following subjects:

 Global economy:
As we all know, merchandise exports appear very early. it is a cross-country
(international) trade. It is not an unilateral trading act but a whole system of trading
relationships in the global trade organization. And the goal is to consume goods in
particular for the whole country in general
Exporting is a key element of foreign trade and the first activity of
international trade. Export plays a particularly important role in the economic
development of each country as well as in the world.

Đỗ Thị Ngọc CQ55/51.05

12


Academy of Finance

Graduation Thesis

Commodity exports are in the circulation of goods. It is one of the stages of
the production expansion. This is the link between production and consumption
from one country to another. It can be said that the development of exports will be
one of the main factors to boost production.

 each country's economy

Export is one of the factors creating momentum, promoting growth and
development of each country According to most theories of economic growth and
development, it has been confirmed and clearly stated that in order for economic
growth and development, each country needs four conditions: human resources,
natural resources, capital, technology and technology. . As most developing
countries (like Vietnam) who lack of capital and technology needed to engage in
import-export activities.

a. Export creates capital for import, serving the industrialization and modernization
of the country
For all developing countries, the most appropriate step is to industrialize and
modernize the country to overcome poverty, backwardness and underdevelopment.
However, the industrialization process requires a large amount of capital to import
advanced technology and equipment. In fact, to have imported capital, countries can
use the main mobilized capital as follows:
+ Foreign investment, borrowing from aid sources
+ Revenue from service tourism activities, domestic foreign currency
collection
+ Revenue from export activities
The importance of foreign investment is undeniable, but mobilizing them is
not easy. Borrowers have to suffer some unfavorable conditions and will have to
pay later if they use these funds. Therefore, exporting is the most important source
of capital activity. Export sets the stage for imports, which determines the size of
the growth rate of import activities. In some countries, one of the main causes of
underdevelopment is a lack of capital potential.

Đỗ Thị Ngọc CQ55/51.05

13

Academy of Finance

Graduation Thesis

b. Export promotes economic restructuring, promotes production development
Under the impact of exports, the structure of production and consumption of
the world has been changing dramatically. Exports have shifted the economic
structure of countries from agriculture to industry and services.
There are two views on the impact of exports on production and economic
restructuring.
Firstly, only export products that are left over for domestic consumption. In
the case the economy is backward and underdeveloped, production is basically not
enough for consumption, if only passively waiting for the excess of production, the
export will be limited to a small scale. Therefore, manufacturing industries have no
opportunities to develop.
Second, based on the development of the world market to organize production
and export. This viewpoint has a positive impact on economic restructuring to
promote exports. It is shown on:
+ Export creates a premise for industries with the same development
opportunities. This can be easily seen through for example, when developing the
textile and garment industry for export, other industries such as cotton, spinning,
dyeing, ... will have conditions for development.
+ Export facilitates the expansion of a country's ability to provide inputs for
production and consumer markets. It allows a country to consume all the goods in
quantities that are greater than the limit of its production capacity, even those that it
cannot produce.
+ Export contributes to promote specialization and increase production
efficiency of each country. It allows for production specialization to develop in both
width and depth. In today's global modern economy, each product is researched and

tested in the first country, manufactured in the second country, assembled in a third
country, consumed in the fourth country and payments in the fifth country. Thus,
goods produced in each country and consumed in one country show the opposite
effect of specialization on exports.

Đỗ Thị Ngọc CQ55/51.05

14


Academy of Finance

Graduation Thesis

Using currency as a means of payment is an important feature that contributes
to a country's foreign currency reserves. Especially for developing countries that
cannot convert currencies, the foreign currency gained through exports plays an
important role in regulating the supply of foreign currencies, stabilizing production,
thereby contributing to the increase. economic growth and development

c. Export has a positive impact on solving jobs, and improving people's lives.
For jobs, exports attract millions of workers through the production of goods
for export. On the other hand, export creates foreign currency to import consumer
goods, meeting the increasingly diversified and plentiful requirements of the people.
d. Export is the basis to expand and promote the development of external
economic relations
Both exports, external economic relations, and diplomacy have reciprocal
interactions and are interdependent each other. Export activities are a solid premise
to build external economic relations in the future, thereby dragging each other to
develop such as international tourism, international insurance, international credit ...

On the contrary, the development of these industries has a negative impact on
exports as the basis for export growth.
It can be said that exports in particular and international trade in general will
lead to changes in international trade, which will lead to changes in the
consumption of goods in the economy by two ways:
+ allows the volume of consumer goods to match the number of goods
produced
+ leads to a beneficial change in accordance with production characteristics
However, depending on the specific conditions of each country, the impact of
export to different countries is different.
1.1.3. Main types of export
1.1.3.1.

Direct export

Direct export is a situation in which a company sells its products directly to
customers in another country without using another person or organization to make
arrangements for them, or a product that is sold in this way.
Đỗ Thị Ngọc CQ55/51.05

15


Academy of Finance

Graduation Thesis

Accordingly, the buyer and the seller will directly sign a foreign trade contract
with each other. Provided that this contract must comply with the laws of each
country, and the standards of the international sale and purchase chart at the same

time. The seller can be the unit directly producing the goods or a trading company
that collects the domestic goods and then signs a foreign trade contract with the
foreign country. Direct export can be applied to all types of businesses, products and
services. The advantage of this method is that businesses will be more active in
exchange and purchase activities. As a result, the brand will have the legitimacy,
affirm the position of the business. This contributes to the eventual development of
business in the international market.
Besides, direct export poses high requirements for businesses such as:
capital must be large enough; the staff is competent, capable and qualified to
conduct export activities directly.
Through direct negotiation and exchange with each other, the two party
can easily come to a common agreement, so that:

 Increase profits and revenue for businesses because minimizing costs for the
intermediaries.
 Facilitate promoting the independence of the business
 Be proactive in consuming goods and products produced by their own enterprises
However, there still exist some certain disadvantages such as:

 Implementation costs for the transaction are quite high, so the volume of exported
goods must also be large to offset the costs.
 · Risks are easy to happen. Because if the staff is not qualified and experienced in
handling the work, the contract procedures will be able to make unfortunate
mistakes.
1.1.3.2.

Entrusted export
Entrusted export is a form in which a third party (a company specializing

in import and export entrustment) is performed on behalf of a company to export

products (goods) for its company abroad (trading partner)
Specifically, the Commission based agent and the owner of the goods will
sign an export trust contract with each other. Then, the they will sign an export

Đỗ Thị Ngọc CQ55/51.05

16


Academy of Finance

Graduation Thesis

contract, carry out delivery procedures, make payment with overseas buyers on
behalf of the exporter. they will receive a corresponding commission. This type of
export is often used by small businesses that are just starting out. The reason is that
they do not have much experience in the export market at the moment, as well as
limited human resources, barriers to procedures and state regulations…
Consequently, we can easily see the benefits that it brings as follows:
 The third party is the person who understands clearly the market and legal
procedures, so the trade is accelerated faster.
 the Commission based agent do not need to invest capital into the business but still
get a significant amount of revenue.
Therefore, companies choosing this form to export goods will face some
shortcomings as follows:

 The import and export unit may lose the link with the market due to having to
satisfy the policies and requirements of the intermediary.
 Profits are not completely retained and must be shared with an intermediary…
1.1.3.3.

Counter – trade
Countertrade is any commercial arrangement in which sellers or exporters

are required to accept in partial or total settlement of their deliveries, a supply of
products from the importing country. In essence, it is a nation’s (or firm’s) use of its
purchasing power as a leverage to force a private firm to purchase or market its
marginally undesirable goods or exact other concessions in order to finance its
imports, obtain needed hard currency or technology. Although the manner in which
the transaction is structured may vary, the distinctive feature of such arrangements
is the mandatory performance element that is either required by the importer,
importer’s government or made necessary by competitive considerations.
 Types of countertrade:
 Barter: A classic barter arrangement involves the direct exchange of goods/services
between two trading parties.
 Switch trading: This is an arrangement in which a switch trader will buy or market
countertraded products for hard currency. The switch trader will often demand a
sizable fee in the form of a discount on the goods delivered.
Đỗ Thị Ngọc CQ55/51.05

17


Academy of Finance

Graduation Thesis

 Clearing arrangements: Two governments agree to purchase a certain volume of
each other’s goods and/or services over a certain period of time, usually a year.
Each country sets up an account in one currency, for example, clearing dollar,

pound, or local currency. When a trade imbalance exists, settlement of accounts can
be in the form of hard–currency payments for the shortfall, transfer of goods,
issuance of a credit against the following year’s clearing arrangement, or by switch
trading.
 Buyback: In a buyback or compensation transaction, a private firm will sell or
license technology or build a plant (with payment in hard currency) and agree to
purchase, over a given number of years, a certain proportion of the output produced
from the use of the technology or plant.
 Counter-purchase: A firm sells goods and/or services to an importer, promising to
purchase from the latter or other entities in the importing nation goods that are
unrelated to the items sold.
 Offsets: An offset is a transaction in which an exporter allows the purchaser,
generally a foreign government, to “offset’’ the cost of purchasing its (the
exporter’s) product. Such arrangements are mainly used for defense-related sales,
sales of commercial aircraft, or sales of other high-technology products. The offsets
can take the form of sub-contractor production, joint production, technology
transfer or investments.
1.1.4. Factors affecting import – export activity
It is necessary to consider factors affecting the business in general and
the export in particular. these factors below often affect the results as well as the
future export activities of the enterprise:

 Factors affecting in the domestic:
 Outside factors the business:
This is a group of influencing factors located within the country but not under
the control of the business. These factors are:

• Strategies, socio-economic development, policies and laws related to export
activities of the State.
Đỗ Thị Ngọc CQ55/51.05

18


Academy of Finance

Graduation Thesis

This is a factor not only affecting the export performance of enterprises
now, but also in the future. Therefore, enterprises must comply with and respond to
it at present, on the other hand, enterprises must have appropriate future export
plans.
Today, Vietnam is implementing an export-oriented strategy. This is a
strategy that focuses on creating export products that are increasingly in line with
the needs of the world market on the basis of better exploitation of the needs of the
national market. The State has specific development policies for each period in
order to encourage all individuals and economic organizations to participate in
export activities, including foreign trade enterprises.
The encouragement of export activities is reflected in policies and
measures related to creating sources of goods for export, creating a favorable
environment for export, and providing financial support for enterprises participating
in export.

• Current exchange rate: Exchange rate is the price of foreign currency in local
currency, or the relative value comparison between local and foreign currencies.
In export activities, enterprises must pay attention to this factor because it
relates to the exchange of foreign currencies into their local currency, thus directly
affecting the export performance of enterprises.
If the exchange rate is larger than the export foreign currency rate, the
enterprise can carry out export activities. Conversely, if the exchange rate is less

than the export foreign currency rate, the enterprise should not export.
In order to know the exchange rate, the enterprise must have the state's
current exchange rate management mechanism and monitor its fluctuations from
day to day.
• Ability to produce export goods of each country: This ability ensures the source of
goods for the business, which is reflected in the products that can be produced with
the volume, quality, specifications, designs whether they are suitable for foreign

Đỗ Thị Ngọc CQ55/51.05

19


Academy of Finance

Graduation Thesis

market or not. This determines the competitiveness of products when the business is
offered for sale in the international market.
When participating in export activities, enterprises will have great
conditions if a country has a developed scientific and technological level, capable of
creating a variety of products with international standards and quality which are
designed to ensures high aesthetics and affordable price. On the contrary, the weak
domestic production capacity, with the monotonous and rudimentary products, will
greatly delay the competitiveness and export expansion of enterprises.
Currently, in our country, the production capacity of export goods is
still low, the export products are simple, the quality has not met international
standards. This is a difficulty for foreign trade businesses to engage in export
activities.
• The level of competitiveness of domestic exporters: Competition, on the one hand,

has the effect of promoting the rise of businesses, on the other hand, it also crushes
and "drowns" weak businesses. The level of competition here denotes the number of
firms exporting in the same industry or of the same interchangeable goods.
Currently, the State has a policy of encouraging all enterprises, all economic sectors
to participate in export, leading to an explosion in the number of enterprises
participating in export activities, thus sometimes leading to unfair competition. This
is a challenge for foreign trade businesses today.
• The country's technical infrastructure development:
This is a factor in the export infrastructure. It includes the development of
the transportation system, the broadcast level of the communication system. These
factors can enhance or limit the trading capacity of the enterprise, expand the export
market of the enterprise, and increase or limit the export transporting services of the
enterprise.
 Internal factors of a business:
This is an internal factor in the business. Enterprises can control and
adjust it in a positive direction for their export activities. These factors are:

•

Leadership and business administration capabilities of the board of directors:
This is a very important factor, decisive to the success of the business of the
Đỗ Thị Ngọc CQ55/51.05

20


Academy of Finance

Graduation Thesis

business. Because the qualifications and ability of business management of the
business management board will help businesses get the right business strategies. It
also helps to ensure that businesses can take advantage of international market
opportunities based on their inherent capabilities.
•
Export business knowledge and capabilities of a team of sales staff in
enterprises: Sales staff are those who directly perform the work of exporting goods.
Therefore, their qualifications and capabilities in export activities will determine
their performance. These will determine the business performance of the entire
enterprise.
•
The financial ability of the business: This is reflected in the firm's capital size.
The size of the business capital has the ability to work continuously. The company's
financial capacity also has many aspects.

It may be a corporate restriction.

Sometimes it can help the company expand to other possibilities of the business.
Because capital is the premise for all business activities of the business.
•
The business strategy of an enterprise has a significant impact on the business
performance of the enterprise. If the right business strategy makes the business lose
money, leading to bankruptcy and is still appropriate (in the right direction), it will
develop well.
•
Factors of natural and geographical resources: Geographical location as well as
natural resources are what nature gives, through which countries exploit its potential
for export.
Natural resources are one of the important factors that serve as the basis
for the country to build industry and regional structures for export. It contributes to

the type of goods and size of the country's exports.
Geographical position acts as either a positive or negative factor for a
country's economic development as well as exports.

Favorable geographical

position is a condition that allows a country to take advantage of the international
assignment of labor, or promote the export of services such as tourism,
transportation, banking, etc.
 Factors from foreign markets:
These are factors outside of national control that directly or indirectly
affect the export activities of enterprises. The following factors can be mentioned:
Đỗ Thị Ngọc CQ55/51.05

21


Academy of Finance

•

Graduation Thesis

The economic development of the export market: This affects the needs and
solvency of export customers, and thus affects the export performance of the
business. Factors reflecting the economic development of the export market are

gross domestic product (GDP), income of the population, inflation, interest rates.
•
Political situation and international cooperation: It manifests itself in the trend

of cooperation between countries. This will lead to the formation of economic and
political blocs of a group of countries, thus affecting the situation of the export
market of enterprises.
•
The socio-cultural characteristics and changes of the export market: This has a
great influence on the needs of the customer, thus affecting the customer's buying
decisions and affecting the export performance of the business.
•
The scientific and technological development level of the export market: This
will affect many aspects of the socio-economic life of that market, thus affecting the
needs and purchasing power of customers.
•
Trade policies of the countries with the export markets of the business: It may
limit or create favorable conditions for enterprises to export to that market. A
country with a free trade policy will make it easier for businesses to export to that
country and often bring high economic efficiency. In contrast, a country with a strict
trade policy will create many difficulties for businesses when exporting to this

•

market.
The level of international competition: Expressed in the pressure from
enterprises and international companies to enterprises when participating in a
certain export market. The greater this pressure, the more difficult it is for
businesses to enter, maintain and expand their export markets. The influence of the
world socio-economic situation: In the condition that each country relies on its
advantages as well as the world consumption market to organize production and
export, the connectivity and dependence between countries is increasing. Because
of this, each fluctuation of the socio-economic situation in foreign countries has
certain effects on domestic economic activities. The field of export activity is a field

of direct relations with foreign actors, influenced and influenced by foreign factors,
so it is even more delicate. Any change in export policy, inflation, unemployment or
Đỗ Thị Ngọc CQ55/51.05

22


Academy of Finance

Graduation Thesis

economic recession growth ... of other countries will affect the export performance
of exporting enterprises in our country.
1.2.

Overview of bamboo and rattan handicraft products export
Bamboo and rattan industry in Vietnam is considered as one of the

industries with great development potential.
Currently, there are more than 1,000 bamboo and rattan crafting villages
nationwide, accounting for 24% of the total number of craft villages in the country.
In which, the Northern and Central regions focus on bamboo, rattan, leaf and sedge
products, and the Southwestern region concentrates a lot of water hyacinth products.
The famous bamboo and rattan crafting villages are: Phu Vinh bamboo and rattan
craft village; Tang Tien bamboo and rattan crafting village; Bamboo and rattan craft
village in Ninh So; Thach Cau bamboo and rattan crafting village; Ngoc Dong
bamboo and rattan village; Bao La bamboo and rattan craft village in Quang Phu Quang Dien - Thua Thien Hue …
Nowadays, bamboo and rattan products, and other handicraft products are
consumed both domestically and export; but enterprises pay more attention to
export.

The domestic market has had a rapid growth in the past 6-10 years, more
than 15%, mainly serving the home furniture industry, hotels and resorts. In
addition, international tourists are also interested in businesses.
The potential for consumption in the domestic market for rattan and
bamboo products is huge, but in fact the market share of this products in the
domestic market is still modest. The reason is partly due to the fact that enterprises
in the industry mainly focus on producing products for export. In addition, the
distribution system in the domestic market is limited, unprofessional, and has not
met the value chain.

 Specifically when talking about Exports:
Among products exported from rattan, bamboo other handicraft products
of Vietnam, accounting for the highest proportion are plaiting products (products
Đỗ Thị Ngọc CQ55/51.05

23


Academy of Finance

Graduation Thesis

made of plastic...), accounting for 25, 5% of total export turnover in the first 11
months of 2018, reaching 57.50 million USD, up 44.1% over the same period in
2017. Next is hyacinth weaving products, with export turnover in the first 11
months. In 2018 reached 50.68 million USD, up 14.8% over the same period in
2017. Export of sedge products reached 48.63 million USD, up 28.6% over the
same period in 2017. Export of rattan products reached 23.55 million USD, down
7.9% over the same period in 2017.
The EU and the US are the two main export markets for Vietnamese

rattan, bamboo, sedge and other handicraft products. Particularly, exports to these
markets accounted for nearly 70% of the country's total export turnover of
handicraft products.
In the first 11 months of 2018, the export of rattan and bamboo handicraft
products to these two markets increased. In which, exports to the US market
increased sharply, reaching 61 million USD, up 26.7% over the same period in
2017; raising the proportion of exports to this market from 24.7% in the first 11
months of 2017 to 27.1% in the same period in 2017. Knit hyacinth is the product
most exported to the US market in the first 11 months of 2018. , reaching 23.42
million USD, up 38.3% over the same period in 2017. Next are products made of
plastic wire, sedge and bamboo.
Export of rattan, bamboo, sedge and other plaiting products to the EU
market in the first 11 months of 2018 reached 94.62 million USD, up 6.2% over the
same period in 2017. Among the markets in the EU, Germany, France, UK,
Netherlands, Spain ... are the largest import markets for Vietnamese rattan, bamboo,
rush and other plaiting products. The sedge is the most exported product to the EU
in the first eleven months of 2018, reaching $ 27.22 million, up 32.9% over the
same period in 2017. Next is the plastic wire products; Knitting bamboo and
knitting water hyacinth.
In addition to the two main markets mentioned above, rattan, bamboo,
rush and other plaiting products are also exported to Japan, Australia, Korea, China,
Canada ...
Đỗ Thị Ngọc CQ55/51.05

24


Academy of Finance

Graduation Thesis

 Difficulties of Vietnam rattan and bamboo industry
Although the export of bamboo and rattan products of Vietnam has
achieved positive results over the past time, the export sector of Vietnamese rattan
and bamboo still faces many difficulties. Vietnam is increasingly integrating more
deeply into the international economy. Vietnamese enterprises in general and
bamboo and rattan enterprises in particular are facing great challenges because
Vietnamese enterprises are not have enough experiences in many aspects and the
facilities for production of enterprises are still limited. In fact, bamboo and rattan
products are handicrafts that need to be preserved well while the facilities of many
enterprises are still poor. The material quality of overseas bamboo and rattan
producers is very good. Because of the limited capital, the bamboo and rattan
enterprises cannot afford to build specialized facilities for their production.
Moreover, due to the lack of production space, the factory is still utilizing, not yet a
production system. Production facilities all have difficulty in production premises,
material gathering yards, and product delivery shops …
In addition, the trade promotion of our country's bamboo and rattan
enterprises is also facing many difficulties. The vital thing of enterprises in the
foreign bamboo and rattan market is that product designs must be constantly new
and attractive, but in general, our innovation and design have not met the demand.
Currently, most of our enterprises are producing according to foreign models, the
enterprises that are standing in the field of bamboo and rattan are mainly
outsourcing for foreign corporations to export according to their designs. should be
under price pressure; That is not to mention the enterprises and craft villages that
mainly export goods through domestic intermediaries. Therefore, profits from
bamboo and rattan production of enterprises are not high and the income of
employees is still low.
The lack of initiative in raw materials is also a problem. In the past, it was
relatively easy to source raw materials. However, in the past few years, this has
become more difficult because the forest areas providing raw materials in Dong

Đỗ Thị Ngọc CQ55/51.05

25