FOREIGN TRADE UNIVERSITY

FACULTY OF ECONOMICS AND INTERNATIONAL BUSINESS



MID-TERM REPORT:

SCREENING AND SELECTING

EXPORT COUNTRY MARKET FOR
UNSWEETENED UHT MILK OF TH TRUE MILK
(Short version)
Course: International Marketing

Instructor : MS. Tran Thu Trang

Class code : MKTE401.1
Group : G6

Hanoi, March 2020

 GROUP MEMBERS

Number Student name Student ID

1 Phan Vu Linh Huong 1711150033
2 Cao Ho Bich Ngoc 1711150043
3 Nguyen Thanh Nguyet 1711150046
4 Ta Mai Trinh 1711150069

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TABLE OF CONTENTS

PART I. EXPORT POTENTIAL OF TH TRUE MILK AND UNSWEETENED UHT

MILK ......................................................................................................................................... 4
1. Introduction about TH True Milk ....................................................................................... 4
1.1. Brief introduction ......................................................................................................... 4
1.2. Export potential of TH True Milk ................................................................................ 4
2. Introduction about the exported product ............................................................................. 4
2.1. Product information ...................................................................................................... 4
2.2. Export potential of the product ..................................................................................... 4
PART II. SCREENING POTENTIAL EXPORT MARKETS ............................................ 6
1. Criterion 1 (Selection criterion): List of the largest unsweetened UHT milk importers in
the world.................................................................................................................................. 6
2. Criterion 2 (Reject criterion): List of countries that Vietnam has not been allowed to
export unsweetened UHT milk ............................................................................................... 6
3. Criterion 3 (Selection criterion): Import tariff rates ............................................................ 6
4. Criterion 4 (Reject criterion): List of countries that TH True Milk has successfully
exported unsweetened UHT milk product .............................................................................. 6
5. Criterion 5 (Selection criterion): Annual import growth rate ............................................. 6
6. Conclusion........................................................................................................................... 6
PART III. SELECTING EXPORT MARKET ...................................................................... 8
1. Population structure ............................................................................................................ 8
2. Income per capita ................................................................................................................ 8
3. Annual growth in value ....................................................................................................... 8
4. Value imported .................................................................................................................... 9
5. Technical regulations ........................................................................................................ 10
6. Stability of exchange rate .................................................................................................. 12
7. Political stability................................................................................................................ 14
8. Conclusion......................................................................................................................... 16
REFERENCES........................................................................................................................ 17
APPENDIX .............................................................................................................................. 19

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PART I. EXPORT POTENTIAL OF TH TRUE MILK AND UNSWEETENED UHT
MILK

1. Introduction about TH True Milk

1.1. Brief introduction

The TH Milk Food Joint Stock Company as part of TH Group which was established with the
financial advisor of North Asia Commercial Joint Stock Bank is a well-known brand in dairy
industry of Vietnam.

1.2. Export potential of TH True Milk

TH true milk is often mentioned with full pride by Vietnamese people. The company is
famous for advanced management system and integrated production processes, synchronized
by international standards from planting grass, building barns, cattle feed processing,
management veterinary control, processing and packaging, to the distribution of products to
consumers. Special feature used to differentiate TH’s products is a combination of three main
differentiators: the basis of quality, brand image, and product design.

2. Introduction about the exported product

2.1. Product information

Selected product for export: TH True Milk unsweetened UHT milk.

2.2.Export potential of the product

• Export potential of Vietnamese milk

Currently, Vietnamese milk has been exported to more than 40 countries and territories. In
2018, the total revenue of the whole industry was approximately $5 billion, bringing Vietnam
to the sixth in Asia in milk production and the fourth in the productivity of milk cows.

• Export potential of unsweetened UHT milk

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According to recently published TechSci Research report, “Global UHT Milk Market
Forecast and Opportunities, 2020”, the global UHT milk market is forecast to cross US$ 133
billion by 2020.

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PART II. SCREENING POTENTIAL EXPORT MARKETS

1. Criterion 1 (Selection criterion): List of the largest unsweetened UHT milk importers
in the world

Trade Map has listed 65 largest unsweetened UHT milk importing countries in 2018
(Appendix 1).

2. Criterion 2 (Reject criterion): List of countries that Vietnam has not been allowed to
export unsweetened UHT milk

Vietnam has not exported milk to the EU yet because the EU has not yet licensed Vietnamese
dairy products to import into this market.

3. Criterion 3 (Selection criterion): Import tariff rates

There are 8 countries having 0% import tariff rate: Hong Kong, Singapore, Libya, Angola,
Botswana, Macao, Lesotho and South Africa (Appendix 2).

4. Criterion 4 (Reject criterion): List of countries that TH True Milk has successfully
exported unsweetened UHT milk product

There are 3 countries that TH True Milk has exported successfully, including China, Russia
and Republic of Bashkortostan.

5. Criterion 5 (Selection criterion): Annual import growth rate

Based on the data from table, we have the results of calculating the market value growth rate
in the 5-year period from 2014 to 2018 (Appendix 3):

1
𝑣𝑎𝑙𝑢𝑒 𝑖𝑚𝑝𝑜𝑟𝑡𝑒𝑑 𝑖𝑛 2018 4
𝐴𝑛𝑛𝑢𝑎𝑙 𝑔𝑟𝑜𝑤𝑡ℎ 𝑟𝑎𝑡𝑒 = [( ) − 1] ∗ 100
𝑣𝑎𝑙𝑢𝑒 𝑖𝑚𝑝𝑜𝑟𝑡𝑒𝑑 𝑖𝑛 2014

6. Conclusion

As a result, countries that have the highest positive annual growth rates are Singapore (3%),
Botswana (13%) and South Africa (18%).

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 Criteria/Country Singapore Botswana South Africa

119,262 21,690 11,699

Value imported in 2018 (USD thousand)
(16th) (50th) (65th)

Annual tariff applied by the country (%) 0% 0% 0%

Annual growth in value between 2014-2018 (%) 3% 13% 18%

Table 1. Value imported (2018), annual tariff and annual growth rates (2014-2018)

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PART III. SELECTING EXPORT MARKET

1. Population structure

Proportion of criterion: 10%

Country Singapore Botswana South Africa

Urban Population in 2019 (%) 100 70.2 66.9

Children Population in 2019 (%) 12.77 31.48 28.18

Total Population in 2019 (million) 5.7 2.3 58.8

Score 3 2 4
Table 2. Population structure

2. Income per capita

Proportion of criterion: 10%

Country Singapore Botswana South Africa

Income per capita in 2018 (USD) 58,247.9 8,031 6,509.037

Predicted Income per capita in 2020 (USD) 60,500 8,100 7,550

Score 4 3 2
Table 3. Income per capita

3. Annual growth in value

Proportion of criterion: 10%

Analysis in detail: The table below demonstrates annual growth rate in value over the past few
years in Singapore, Botswana and South Africa. South Africa appears to be the most potential
market regarding this criterion with the most impressive figure while Botswana ranks second
and Singapore is the least attractive market.

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 Country Singapore Botswana South Africa

Annual Growth in Value between 2014 and 2018 (%) 3 13 18

Annual growth in value between 2017 and 2018 (%) 6 6 -48

Score 2 4 3
Table 4. Annual growth in value

4. Value imported

Proportion of criterion: 20%

Analysis in detail: The graph below illustrates the imported value of milk among three
countries: Singapore, Botswana and South Africa over the period from 2015 to 2018. It can be
easily observed from the graph that the value imported of Singapore outnumbered that of the
other two other countries. Besides, Singapore imported milk with an increasing trend over the
last few years, while the figure for Botswana almost remained unchanged with pretty slight
increase recently, and the imported value of South Africa fluctuated but dropped considerably
between 2017 and 2018.

Imported value from 2015 to 2018

140,000
Imported value (thousand USD)

120,000

100,000

80,000

60,000

40,000

20,000

0
2015 2016 2017 2018
Year

Singapore Botswana South Africa

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 Country Singapore Botswana South Africa

Imported value in 2018 (USD thousand) 119,262 21,690 11,699

Imported value in 2017 (USD thousand) 112,472 20,389 22,505

Imported value in 2016 (USD thousand) 104,550 21,911 9,749

Imported value in 2015 (USD thousand) 103,610 21,035 16,538

Score 4 3 2
Table 5. Value imported

5. Technical regulations

Proportion of criterion: 20%

• Singapore

Under Food regulation of Singapore:

(1) Pasteurized milk shall be milk which has been effectively heat-treated once only by
heating the milk to a temperature of not less than:

(a) 62.8°C and not more than 65.6°C and holding it at such temperature for not less than
30 minutes, and then immediately and rapidly reducing the temperature to 4.4°C or
below; or

(b) 72°C and not more than 73.5°C and holding it at such temperature for at least 15
seconds, and then immediately and rapidly reducing the temperature to 4.4°C or below.

(2) Pasteurized milk after having been subjected to processing by heat as described in
paragraph (1) shall immediately be packed aseptically.

(3) Every package of pasteurized milk shall be date-marked in accordance with regulation 10.

• Botswana

Under Food Regulation of Botswana, unsweetened pasteurized milk is determined:

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Heat treatment of milk to such an extent that all pathogens are destroyed, and the result of the
phosphatase test is negative. It shall be performed by heating every particle of the milk to a
temperature of at least 63C (not exceeding 65.5C) and keeping it at that temperature for at
least 30 minutes (long time low temperature), heating shall be followed by cooling within 30
minutes to a temperature lower than 4C. Alternatively, pasteurization can be achieved by
heating every particle of milk to a temperature of at least 72C and keeping it at that
temperature for at least 15 seconds (high temperature short time). Heating shall be followed
immediately by cooling to a temperature of 4C or lower.

• South Africa

Under Food regulation of South Africa, the unsweetened pasteurization of milk shall be
performed:

(a) by heating every particle of the milk to as temperature of at least 63°C (not exceeding
65,5°C) and keeping it at that temperature for at least 30 minutes, which heating shall be
followed by cooling within 30 minutes to a temperature lower than 5°C (this process is
referred to as the “holder method” or the “batch method”); or

(b) by heating every particle of the milk to a temperature of at least 72°C and keeping it at that
temperature for at least 15 seconds, which heating shall be followed immediately by cooling to
a temperature lower than 5°C (this process is hereinafter referred to as the “high-temperature
short-time method”); or

(c) by any other method prescribed by regulation: Provided that milk shall in no instance be
deemed to have been pasteurized if it fails to pass the Aschaffenburg and Mullen phosphate
test described in paragraph 3 of Annexure A or any other test, provided the accuracy thereof
equals that of the Aschaffenburg and Mullen phosphatase test.

We have the following scoreboard:

Country Singapore Botswana South Africa

Technical regulation 2 3 4
Table 6. Technical regulation scoreboard

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6. Stability of exchange rate

Proportion of criterion: 20%

Figure 1. Exchange rate chart: SGD (Singapore Dollar) to VND, 2016 – 2020

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 Figure 2. Exchange rate chart: BWP (Botswana Pula) to VND, 2016 – 2020

Figure 3. Exchange rate chart: ZAR (South Africa Rand) to VND, 2016 – 2020

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We have a scoreboard:

Country Singapore Botswana South Africa

Stability of exchange rate 4 3 2

Table 7. Stability of exchange rate scoreboard

7. Political stability

Proportion of criterion: 10%

Figure 4. Singapore political stability, 2014 - 2018

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 Figure 5. Botswana political stability, 2014 – 2018

Figure 6. South Africa political stability, 2014 – 2018

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We have the following scoreboard:

Country Singapore Botswana South Africa

Political stability 4 2 1
Table 8. Political stability scoreboard

8. Conclusion

Criteria Percentage Singapore Botswana South Africa

Population structure 10% 3 2 4

Income per capita 10% 4 3 2

Annual growth in value 10% 2 3 4

Value imported 20% 4 3 2

Technical regulation 20% 2 3 4

Stability of exchange rate 20% 4 3 2

Political stability 10% 4 2 1

Total 100% 3,3 2,9 2,6

Table 9. Total scoreboard
In conclusion, Singapore has the highest score, so it is the most potential market that TH True
Milk should export unsweetened UHT milk.

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REFERENCES

• Vietnamese

TH True Milk’s official website: <thmilk.vn>

Thanh Hai, Tiềm năng xuất khẩu sữa chính ngạch sang Trung Quốc (2019). Retrieved
from: <https://www.sggp.org.vn/tiem-nang-xuat-khau-sua-chinh-ngach-sang-trung-quoc-
625046.html>

Vietnam Chamber of Commerce and Industry (VCCI), EVFTA và ngành trứng, sữa, mật ong
Việt Nam (2017)

• English

European Commission website: <https://ec.europa.eu/>

Investopedia website: <https://www.investopedia.com>

J. C. Moreki, O. Koloka, L. Nthoyiwa, I. P. Moloi, G. Palai, A critical review of the

performance of the dairy industry in Botswana (2011). Retrieved from:
<http://www.lrrd.org/lrrd23/3/more23068.htm>

Jeremiah Sejabosigo, Botswana milk import high (2019). Retrieved from:

<http://www.dailynews.gov.bw/news-details.php?nid=51993>

Kalpana Bhaskaran, Milk Consumption Trends in Singapore (2018). Retrieved from:

<http://scifedpublishers.com/fulltext/milk-consumption-trends-in-singapore/22008>

Office for National Statistics website:

<https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/population
estimates>

Penny Ntuli, Factors driving demand for UHT milk in Africa (2015). Retrieved from:
<https://www.bizcommunity.com/Article/196/168/125522.html>

Persistence Market Research, In-Depth Analysis on South Africa’s UHT Milk Market:
Rising Consumption of Semi-Skimmed UHT Milk to Drive Market’s Growth (2015).
Retrieved from: <https://www.persistencemarketresearch.com/market-research/south-africa-
uht-milk-market.asp>

SABS Standard Divison, South African Standard – Pasteurized Milk, Edition 2.1 (2013).
Retrieved from:
<https://store.sabs.co.za/pdfpreview.php?hash=2e8fe3b0e4a931efd9ca574b6497ba810c1b8ab
5>

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Singapore Food Regulations (2005). Retrieved from: <https://sso.agc.gov.sg/SL/SFA1973-
RG1#legis>

TechSci Research, Global UHT Milk Market Forecast and Opportunities, 2020 (2020)

The Global Economy website: <https://www.theglobaleconomy.com>

Trade Map website: <https://www.trademap.org>

Trading Economics website: <https://tradingeconomics.com>

XE Currency Converter: <https://www.xe.com>

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APPENDIX

Appendix 1. Top 65 largest unsweetened UHT milk importers in the world in 2018 (USD
thousand)

Imported Imported Imported Imported Imported Imported

Rank Importers value in value in value in value in value in value in
2014 2015 2016 2017 2018 2019

1 Germany 1,411,358 1,099,425 1,090,729 1,705,594 1,499,784 1,478,625

2 Belgium 890,616 602,117 701,292 1,001,272 960,318

3 China 408,554 485,106 639,722 879,393 912,599

4 Italy 1,277,131 891,512 762,967 814,499 799,828

5 Netherlands 543,806 432,320 505,690 610,433 670,163

6 France 708,379 493,345 479,626 606,459 600,711 525,323

7 Ireland 311,582 204,670 184,977 283,606 320,874 278,074

United
8 222,062 176,828 141,283 189,643 222,699 173,292
Kingdom

9 Iraq 9,152 163,552 211,205 243,046 206,372

10 Poland 119,570 93,229 133,414 169,819 194,301

11 Lithuania 200,652 96,556 103,993 173,607 185,692 183,579

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 Russian
12 301,957 171,110 149,209 217,122 183,368
Federation

United Arab
13 133,742 100,244 113,090 147,390 138,638
Emirates

14 Austria 90,296 72,425 80,310 93,160 132,442

Hong Kong,
15 104,409 107,353 107,047 116,553 124,368 120,001
China

16 Singapore 107,597 103,610 104,550 112,472 119,262 124,016

17 Greece 137,536 105,053 106,679 122,166 112,890 96,142

18 Spain 264,173 151,953 111,897 112,372 112,621 107,488

19 Denmark 84,400 62,753 62,587 73,243 107,319 100,326

20 Croatia 73,114 61,081 69,188 96,985 102,267

21 Romania 72,891 67,114 82,956 110,027 101,942

22 Sweden 101,746 80,854 83,952 93,676 95,928

Korea,
23 27,777 22,802 52,136 67,618 89,858 95,260
Republic of

Taipei,
24 50,819 48,061 55,975 73,823 83,406
Chinese

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 Libya, State
25 50,303 50,660 69,778 70,785 81,936
of

26 Philippines 56,493 48,828 60,837 62,821 74,226

27 Kenya 6,699 10,088 10,738 52,044 73,564

28 Slovakia 90,335 62,127 52,480 75,886 73,435

29 Hungary 79,568 58,813 44,440 66,763 70,856

30 Portugal 114,269 80,703 62,538 49,666 58,011 53,471

31 Latvia 54,126 35,139 40,934 53,958 56,696

32 Malaysia 43,742 35,153 35,459 48,550 56,044 63,705

33 Kuwait 39,434 89,406 86,008 76,250 48,671

34 Cambodia 9,360 7,701 10,853 38,397 46,364

Czech
35 71,113 52,087 62,590 54,388 44,007 38,429
Republic

36 Oman 67,941 67,686 76,187 24,073 41,848

37 Angola 57,174 32,815 36,516 38,598 40,602

38 Slovenia 42,345 28,803 25,991 34,157 36,532

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39 Viet Nam 16,252 17,198 22,629 30,031 34,056

40 Bulgaria 18,553 19,818 28,567 32,887 32,162

41 Luxembourg 43,588 52,134 38,751 34,736 31,780

42 Qatar 39,554 43,332 31,652

United States
43 16,948 17,952 21,091 28,926 31,468 44,143
of America

Dominican
44 11,750 23,224 22,041 21,211 30,511
Republic

45 Guatemala 35,782 36,535 30,376 25,888 28,058

46 Mexico 26,456 27,397 41,857 41,429 26,915

47 Saudi Arabia 118,815 115,547 60,787 24,765 25,434

48 Bahrain 19,388 18,545 20,408 19,884 23,167

49 Canada 26,499 25,341 34,756 27,560 22,496 30,815

50 Botswana 11,483 21,035 21,911 20,389 21,690

51 Serbia 15,287 10,767 11,540 15,586 21,382

52 Macao, China 13,122 13,492 10,583 18,758 20,558

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53 Switzerland 22,061 20,706 19,931 19,462 19,572 20,345

Bosnia and
54 15,470 11,591 14,300 15,322 19,437 29,966
Herzegovina

55 Lebanon 14,018 13,055 13,870 14,304 19,176

56 Jordan 17,107 13,220 14,308 16,720 17,492

57 Kazakhstan 36,815 33,217 25,698 27,619 17,069 17,220

58 Mauritania 16,394 16,933 14,583 14,733 17,003

59 Estonia 12,951 7,134 9,724 16,162 16,990 8,187

60 Yemen 18,475 11,235 5,027 2,618 15,892

Macedonia,
61 12,418 12,072 11,760 11,341 15,871 20,940
North

62 Montenegro 16,612 14,366 14,417 14,878 15,696

63 Indonesia 14,164 14,753 9,539 13,164 15,066

64 Lesotho 9,404 8,034 10,000 13,135 12,990

65 South Africa 5,988 16,538 9,749 22,505 11,699 11,555

Source: trademap.org

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Appendix 2. Import tariff rate for unsweetened UHT milk products from Vietnam (%)

Average tariff (estimated)

Rank Market
applied by the country (%)

1 China 13.9

2 Iraq ...

3 United Arab Emirates 4.6

4 Hong Kong, China 0

5 Singapore 0

6 Korea, Republic of 33.3

7 Taipei, Chinese 39

8 Libya, State of 0

9 Philippines 2.8

10 Kenya 55.5

11 Malaysia 21.5

12 Kuwait 4.6

13 Cambodia 6.9

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14 Oman 4.6

15 Angola 0

16 Viet Nam 16

17 Qatar 4.6

18 United States of America 6.7

19 Dominican Republic 18.2

20 Guatemala 14.6

21 Mexico 9.7

22 Saudi Arabia 4.6

23 Bahrain 4.6

24 Canada 259

25 Botswana 0

26 Macao, China 0

27 Lebanon 27.9

28 Jordan 15.9

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29 Kazakhstan 8.2

30 Mauritania 20

31 Yemen 9.3

32 Indonesia 4.8

33 Lesotho 0

34 South Africa 0

Source: trademap.org

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Appendix 3. Annual growth rate in value (%)

Value imported in 2018 Annual growth in value

Number Country
(USD thousand) between 2014-2018 (%)

1 Hong Kong, China 124,368 4

2 Singapore 119,262 3

3 Libya, State of 81,937 15

4 Angola 40,602 -5

5 Botswana 21,690 13

6 Macao, China 20,558 10

7 Lesotho 12,990 3

8 South Africa 11,699 18

Source: trademap.org

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