Đưa doanh nghiệp việt nam cạnh tranh nhiều hơn trên thị trường thế giới e

Topic
Select a country and a product or service you feel will be a wise and a long term
investment potential for your Vietnamese company expansion into a foreign country.
Why did you select this country? Support your choice with good documentation and
reliable data.
Why did you select this product or service? What is your projection on the
competition you will have in this country?
Please document and explain your rationale.
What are the strengths and weaknesses of your country and product/ service choices?
Please be specific.
What specific research or background information would you need to consider
before entering into this sometimes risky but often very profitable international
business
venture?
Where would you find pertinent data/ quality sources to help you start the business?
Please include specific sites and a short description of what is contained in the site
data.
Try to make this assignment a realistic investment endeavor.
Copied papers will result in 0 zero grade – Please write your own paper.
Please use creativity and innovation in your paper.

1


Assignment
1. Select the country to invest
To find a potential nation for wise and long-term investment in order to expand your
business into foreign countries, the most wisdom choice for a Vietnamese company is
that: selected country must be a potential market (good business opportunity, largeenough market size, low cost and well disposable natural resources, etc) and be
ranked as on top of easy-to-do business by the WB. Obviously, it is necessary to
cautiously consider the factors in terms of geography and language, etc.

 Based on criteria of Top countries easy to do business
We will prioritize investing a country ( or some countries) highly ranked from
first ranking to tenth one such as: Singapore, Hong Kong SAR, China, New
Zealand, United States, Denmark, Norway, United Kingdom, United
Kingdom, Georgia, Australia.
Table 1: Top Countries Easy to do Business

Nation

year 2011
1
2
3
4
5
7
6
9
12
11
10
14
8
20
91

Singapore
Hong Kong SAR, China
New Zealand
United States

Denmark
Norway
United Kingdom
Korea, Rep.
Georgia
Australia
Finland
Malaysia
Sweden
Japan
China

year 2011
1
2
3
4
5
6
7
8
9
10
11
12
13
24
91

Source: />

 Based on criteria of countries where the most popular languages are used, we
will prioritize selecting countries in which English, Chinese, Portuguese,
Japanese, Spanish are spoken.
We put the highest priority on English-speaking countries for English is
recognized as the international language and is used by the largest number of
people and countries compared to other languages.
2


Table 2:

 Based on criteria of countries which are geographically close to Vietnam,
China, Japan or South Korea are our priorities
Figure 1: World map

 The best selected countries are those which have stable political condition and
monetary system (highly-ranking countries in Table 1) in order to avoid risks
of political and legal systems’ changing that foreign investors probably face.
Those countries are the US, the UK, Germany, Japan, Singapore, etc.
 Based on market size and development perspective, we prioritize selecting –
-

China:
Population: more than 1.3 billion people

3


High growth rate, China’s GDP is the second highest one compared to
other countries’ ones in the world ($7.32 thousand of billion in 2011 )

Source: />
-

The US
Population: 311.6 million people
GDP is the highest one in the world (15.09 thousand of billion in 2011).

Source: />
-

Japan: population is 127.8 million people, GDP in 2011 reached 5.869
thousand of billion dollar, ranking third in the world.
Table 3: Population and GDP of some countries in the world

4


Country name

Population
2011

GDP 2009

GDP 2010

GDP 2011

China

1,344,130,000.00

4,991,256,406,735

5,930,529,470,799

7,318,499,269,769

France

65,436,552.00

2,619,685,000,757

2,549,027,263,158

2,773,032,125,000

Germany

81,726,000.00

3,298,635,952,562

3,258,947,368,421

3,570,555,555,556

India

1,241,491,960.00

1,361,057,169,927

1,684,323,716,503

1,847,981,853,638

Japan

127,817,277.00

5,035,141,567,659

5,488,416,495,785

5,867,154,491,918

Russian Federation

141,930,000.00

1,222,648,134,225

1,487,515,608,183

1,857,769,676,144

United Kingdom

62,641,000.00

2,171,386,109,462

2,251,898,461,538

2,431,588,709,677

United States

311,591,917.00

13,863,600,000,000 14,447,100,000,000 15,094,000,000,000

Vietnam

87,840,000.00

97,180,304,813

106,426,845,157

123,960,665,229

Source: /> Population, total

The final selecting decision:
We are determined to select:
- The first choice: the US: large market size, the highest GDP in the world,

English is used there, ranked as fourth (2010, 2011) in terms of easy-to-startbusiness, dollar is a strong currency, modern technology, comprehensively and
transparently legal system, etc. Geographically, as an American country, the US
is quite far from Vietnam in the Asia.
- The second choice: China: large market size, the second highest GDP in the
world, the largest population, stably high economic growth rate, geographically
close to Vietnam. However, intellectual rights infringement is commonplace.
Corruption is nationwide. Despite being secondly-high used language in the
Internet, it is difficult to learn and not the international language. China is only
ranked as 91st (2011) by the WB in the list of ranking countries easy to do
business. China also devalued the Yuan to gain advantage for China’s export.
- The third choice: the EU: a large market consisting of 27 countries with the
population of more than 500 million people and developed economy.
- The fourth choice: Japan: large market, third highest GDP in the world,
population of more than 123 million people. Legal system is transparent. It is
also ranked as 20th among countries easy to do business in 2010 and as 24th

5


among those in 2011. Japanese is the fourth common language in the Internet.
Japan and Vietnam has a close relationship. Yen has high value.
Altogether, we decide to select the US with its transparent and large market to
expand our investment. Moreover, we are fluent in English, whereas, Chinese and
Japanese are difficult to learn, and no-one among us could use them. Nevertheless,
China and Japan are very potential markets and we will consider for the next
investment expansion.
2. Select products and investment form
-

Product: fisheries as strong products of Vietnam

-

Form of market entry: exportation.

Agriculture and agricultural products are advantages of Vietnam. It has 3260 long
coast line, 112 rivers, creek and more than 2km2 of water area, etc. fisheries products
exported by Vietnam are tra, basa, shrimp, sea fish (especially, tuna), etc.
Aquaculture area of Vietnam is 1.095.618 ha and the output reached 2.742.888 ton in
2010. Currently, Vietnam is exporting fisheries products into the markets of the US,
the EU, Japan and China, etc.
We select exportation as market entry form since exportation is a production activity
that requires materials area in Vietnam, skilled employees, low hiring cost and easy
to hire workers.
Table 4: 2001-2010 aquaculture area of Vietnam
(Source: Summary Report - Overall development planning of the fisheries sector in Vietnam up to 2020)
Unit: ha
N
Territory
0.
1
Red River Delta
2 Midland and mountainous
areas of Vietnam
3
North Central and
Central Coast Vietnam
4
Hightlands
5

Southeast of South
Vietnam
6
Mekong delta
Total

2001

2003

85,600
20,900

97,900
22,400

54,800

2005

2007

2008

2009

2010

107,800
31,100

117,200
36,200

121,200
37,900

124,900
40,000

127,571
44,640

Growing
(%/year)
4.5%
8.8%

66,200

73,600

78,900

77,900

79,600

80,529

4.4%

5,700
41,500

6,200
47,400

8,300
51,800

9,300
53,400

10,700
52,700

11,100
51,500

19,150
54,680

14.4%
3.1%

546,800
755,300

621,300

861,400

679,900
952,500

723,800
1,018,800

752,206
1,052,606

737,600
1,044,700

769,048
1,095,618

3.9%
4.2%

Sourece: General Statistics of Vietnam, Provinces Agriculture and Rural Development, 2011

6


Table 5: 2001-2010 Aquaculture production of Vietnam
(Source: Summary Report - Overall development planning of the fisheries sector in Vietnam up to 2020)

Unit: ton
N

0.
1
2
3
4
5
6

Territory
Red River Delta
Midland and
mountainous areas of
Vietnam
North Central and
Central Coast
Vietnam
Hightlands
Southeast of South
Vietnam
Mekong delta
Total

2001

2003

131,950
20,953

180,666

29,487

59,323

2005

2007

2009

2010

234,267
37,005

304,200
48,849

363,384
55,374

392,277
78,913

Growing
(%/year)
12.9%
15.9%

84,810

114,422

141,245

174,238

201,961

14.6%

8,012
45,259

10,958
62,367

11,344
78,138

13,017
89,412

16,122
91,308

18,864
104,943

10.0%

9.8%

444,394
709,891

634,798
1,003,095

1,002,805
1,477,981

1,526,557
2,123,280

1,869,484
2,569,910

1,945,930
2,742,888

17.8%
16.2%

Sourece: General Statistics of Vietnam, Provinces Agriculture and Rural Development, 2011
Source: />
3. U.S. seafood market characteristics and opportunity for Vietnam
The US import seafood to meet 85% its internal market. In 2011, according to a
statistics, the US import seafood worth 16.6 billion dollar and export that worth 5.13
billion

dollar.

/>
(Source:

/>
and

Supply is limited while demand is large, that is a good

opportunity for our company.

- The South East Asia countries are
playing a more and more important
in providing seafood to American
market. In the context that fish
stocks are increasingly depleted and
overfishing are taking place in many
developing

countries,

the

US

included, countries with developing
fisheries, including Vietnam, have a
big opportunity to offset the shortage in such huge market as the US.
Particularly, the Southeast Asian countries affirmed their prestigious in American

market. Imported seafood from the Southeast Asian countries into the US accounted
7


for 31% of total imports in 2010 and is expected to rapidly increase following the
development direction of marine aquaculture industry in those countries.
Little supply, big demand
Volume of global annual fishing stagnated at the amount of 90 million ton since the
middle period of 1990s, meanwhile seafood consumption rapidly increased. For
instance, the US imported about 2.5 million ton of seafood in 2010, domestic
aquaculture output uncounted. The amount increased by 5.7% compared to that of
2009 and consumption trend continuously increases (the fact that the US’s residents
now only consume half amount of seafood recommended to use by the Government)
Importation accounts for 84% total seafood consumption of the US. Meanwhile, it is
so difficult for seafood producers to meet the demand of consumption. The stagnated
supply source and increasing demand require the US should expand its seafood
market.
In 2010, seafood trade deficit of the US reached approximately 7 billion dollar,
making seafood to be natural resource which has the second largest deficit ratio,
following crude oil and natural gas.
Southeast Asian countries (3.4 billion dollar), China (2 billion dollar), Canada (1.6
billion dollar) account for majority of total seafood importation worth 11.2 billion
dollar of the US in the last year.

8


Source: />
In spite of the fact that half imported seafood of the US comes from domestic supply,
the US’s industry only meets about 5 % total consumed seafood. Growth prospects

of the marine aquaculture industry in the U.S. are very dim due to uncertain impact
over environment and unfavorable regulations. Besides, farming cost in the US is
higher than in other countries where this industry is not supported.
The US has a few options, but certainly will boost aquaculture importation. With
natural seafood stocks failing to meet increasing demand, along with domestic
aquaculture production’s slow development, the future supply sources will depend
on aquaculture industry of foreign countries.
Opportunity for Vietnam

9


Source: />
The Southeast Asia aquaculture industry is very diverse, varying from freshwater
fish, aquatic plants, crustaceans, saltwater fish and invertebrates. Shrimp and
freshwater fish have the highest

value within Southeast Asian farming products.

Total output of Southeast Asian seafood has 3 times increased, from 2 million ton in
1990 to 7 million ton in 2005; the average production rate in 2000s increased 2 times
compared to that in 1990s.
With such remarkable results, Asian countries are alleged of dumping price of
seafood in the US market since 2000, particularly catfish (tra, basa) and shrimp.
Most recently, in 4/2011, USDOC continued to impose anti-dumping duty over some
kinds of seafood imported from Brazil, China, India, Thailand and Vietnam.
Besides, Southeast Asian seafood industry must confront with stringent regulations
relating to quality and safety standard in the US market.
Regardless of many difficulties, the Southeast Asian exporting countries are making
efforts to expand market share in the US. The Wall Street has lately reported that

Indonesia, the fourth largest exporting seafood country to the US, is modernizing
infrastructures in an effort to increase its seafood market share in the world, towards
the goal of increasing amount of exporting seafood by 70% in the three years to
10


come.
VASEP said that Vietnam’s catfish exportation into the US from early 2012 to now
has increased by 85.5% in volume and 105.5% in value compared to that of same
period in 2011, reaching 39 million ton and 135 million dollar, because catfish
supply source in US domestic market has continuously decreased compared to that in
last year and also since the early 2012 up to now, since domestic area of fish
decreased.
The US continues to take a lead in single market importing Vietnam’s catfish,
accounting for more than 16% of catfish export turnover. Monthly volume and value
of basa exportation continued to increase in comparison to that in the same period
last year. Average exporting price in the US in the first six months increase by 12%,
reaching 3.51 dollar per kg.
Vietnam’s shrimp production are increasingly developing, surpassing other countries
in the region in terms of exportation into the US.
According to the statistics of NOAA announced in 11/08, volume of imported
shrimps from Vietnam and Indonesia (fourth and second largest shrimp suppliers,
respectively) increased from 21.4% and 19.8% to 37.1 million lb and 77.7 million lb,
respectively in the first six months of 2011, in the meantime, that of imported
shrimps from 4 other suppliers, including Thailand, Ecuado, China and Mehico,
decreased.
The seafood professionals said that in the last months, the US market still attracts
Vietnam’s exporting basa producers, particularly given encouragement from the
result of POR 7 in the period 1/8/2009 -15/2/2010.
Accordingly, the DOC announced to chose Bangladesh as the third country used to

calculate the dumping margin for Vietnam’s catfish and adjusted to grant basa antidumping tax of 0% for IDI and THIMACO.
Us imports: fish and other marine products, 2011
No.
1
2
3
4

Originate
Canada
China
Thailand
Chile

2010
2.034.891
1.910.701
1.061.430
601.634
11

2011
2.222.984
2.131.584
1.111.639
937.520

increase, decrease
(%)
+9,24

+11,56
+4,73
+55,83


5
6
7
8
9
10
…

Indonesia
Vietnam
Ecuado
India
Mexico
Norway
…

50 El Savado
79 other market
Total

734.350
687.419
589.319
345.632
357.950

513.557
….

872.746
837.370
707.481
569.289
454.232
327.797
…

+18,85
+21,81
+20,05
+64,71
+26,90
-36,17
…

9.650
9.067
139.140
131.407
11.824.595 13.351.930

-6,04
+12,9

/>
4. Some difficulties in exporting seafood into the US

+ High competition
Competitiveness will be high when products from Vietnam must sharply compete
with cheap products, especially originating from China, Thailand, Malaysia, etc.
+ Some barriers
Vietnam’s business should be necessarily more cautious at increasing trade barriers in
the US. The US has a complicated legal system with many technical barriers in trade.
Particularly, given difficult economic situation, protectionism trend granted for
products of domestic business is more and more increasing.
In fact, most of main imported products from Vietnam into American market must
either struggle with anti-dumping and counter-subsidize cases such as catfish, base,
textile, PE bags, steel products and hangers, etc, or face the risk of being sued such as
furniture and seafood, etc.
2011 saw not only the fact that the number of Vietnam’s business initiated against by
the US increased but also that the US enacted more Acts to create trade barriers to
Vietnam’s entrepreneurs, proven by the case of steel products: Vietnam’s business
producing steel hangers were officially initiated in the end of 2011.
Moreover, the approval of such Acts as Food Safety Modernization Act (FSMA):
which requires test of Residues Of Plant Protection Products In all shipments;
Intellectual rights infringement in IT Act in order to ban exporting businesses from
using illegal software in all business activities, etc have caused many troubles to
businesses.

12


+ Difficulties in exporting agricultural products into American market
According to the judgment of pundits, in the coming time, Vietnam’s exported
agricultural products into the US will meet a lot of troubles as the US carries out
testing quality of imported agricultural products in accordance to the FSMA recently
enacted by its Government. Specifically, accordingly, from 2012, the Us will apply

stringent test procedures to imported products from all exporting countries, including
agricultural products, foods and drinks. Also according to FSMA, American
Agricultural Department will be entitled with the right to check or recall products
exported into the US if they are found to fail the quality standard.
5. Plan of the US seafood market entry
Favorable market condition for us
-

As mentioned above, demand of seafood in the US is so high, whereas supply is
limited (high demand is an advantage)

-

Seafood exportation into the US promises to see a breakthrough as the
Department of Commerce has recently announced the administrative review
results regarding shrimp and basa products exported into the US market.

Accordingly, the anti-dumping taxes in the POR 5 are much lower than they were in
POR 4. In terms of basa products, tax is 0% in the preliminary review 7.
Increase competitiveness: According to official result of the fifth period of Review
regarding Vietnam’s frozen shrimp products (in the period of 1/2/2009 -31/1/2010),
tax of reviewed companies decreased.
In which, taxes of three mandatory respondents decrease from2.95% to 1.15%; that
of Nha Trang seafood decreases from 4.89% to 0%; that of Camimex decreases from
3.92% to 0.83%. Taxes of 28 non-respondents also decrease from 3.92% to 1.04%.
The official result of POR 5 itself also decrease by large amount compared to the
preliminary result announced by the DOC March 2011 (majority of companies are
taxed by 1.52% at that time)
Decreasing anti-dumping taxes compared to that of previous POR means that such
companies could be paid back partial amount of cash deposits, and cash deposits in

the next period of exportation will also decrease.
Moreover, new tax will increase competitiveness of Vietnam’s shrimp products in the
US given the context that the competitors of Vietnam are being taxed at low rate.
13


3 consecutive years with tax of 0%: In the meantime, according to the official
result of POR 7 regarding Vietnam’s tra exported into the US in the period of
1/8/2009 – 31/7/2010, Vinh Hoan corporation has become the first Vietnamese
seafood company that escaped from the US’s anti-dumping lawsuit. Beside Vinh
Hoan, other companies as respondents in this review are taxed by approximately
15%.
Active tax reduction: According to VASEP, one of the reasons that Vietnam’s
seafood companies have low anti-dumping tax in this review is that the price of
exported products into the US has increased. To count dumping margin, the US DOC
compares price of exported products from Vietnam to normal price, meaning that the
higher price (of shrimp, catfish) from Vietnam is, the lower dumping margin is. In
regard to shrimp products, in the recent POR 5, the US continued to apply zeroing
which was dismissed by the WTO in the recent case between Vietnam and the US.
“Now, the period of appellation doesn’t expire so that the US hasn’t yet used that
method. If the US doesn’t’ apply that method any longer, tax that Vietnam’s
businesses are granted will be lower”
Difficulties: Exporting price decrease due to big competitiveness with such countries
as: Bangladesh, India, Thailand, Malaysia etc.
Plan
-

Begin to import into the US from the first Quarter of 2014.

-

Assign Investment Department of the Company to establish specific plan to
select: market size, expected sales, expected benefit, needed capital, how to raise
capital, investment payback, etc completed by 31/12/2012

-

2012: plant construction, production line purchase, worker selection, supply chain
and high-quality materials build, food safety, environmental protection based on
the standards of the US, the EU and Japan, etc completed by 9/2013.
Need to be well-done:
Products must have high-quality and meet the food safety standard and other
standards issued by the US. Build up comprehensive marketing strategy.

-

Establish good websites to sell products and to seek for trade partners.

-

Participate in seafood and fisheries fairs domestically and internationally to
advertise the company and its products
14


-

Participate in professional associations to get as much information about market
and trade partners as possible.

-

Enlist the assistance from the relationship with Vietnamese businessman living in
the US, Vietnamese Government’s offices and other relationships.

-

Find trade partners via other ways.

-

Hire good lawyers to counsel issues regarding international trade law, importing
countries’ law and Vietnam’s law in order to avoid trading risks.

-

Complete legally registration procedures in American authorities according to the
US’s law. For example, under the provision that from 1.10 to 31.12.2012, food
producing and processing facilities who want to exports products into American
market must register their information with Food and Drug Administration and
Food Safety Modernization Act
….

15