FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS

MID-COURSE INTERNSHIP REPORT

Major: External Economics

IMPORT ACTIVITIES IN PRODUCTION MATERIALS AND

MACHINERY IN KHANH HOA SALANGANES NEST COMPANY – HO
CHI MINH CITY BRANCH

Internee: Pham Phuong Nga

Student ID: 1101017213
Class: K50CLC2
Supervisor: Ms. Phung Minh Duc

Ho Chi Minh city, July 2014

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PREFACE
Nowadays, when Vietnam is more and more developed, the living standards of
Vietnamese people has also been improved. One of the main criteria to prove that is
the eating habit of Vietnamese people. The food supplies are now more diverse than
before and besides daily food, people tend to consume nutrious food as well. The
industry of nutritious food has been growing non-stop from ginseng to bile and
especially salanganes nests, also called "white golds". Salanganes Nests are
popularly consumed due to its ability to be produced massively in quantiy, with
diverse forms and supplies from not just Vietnam but other countries in the region
such as Thailand, Malaysia and not just from nature but they can also be produced
in-doors from modern bird nest rasising technology.
Besides that, the huge profits from nests have created a big trend of in-door bird
nest raising and salanganes nest business in Vietnam in the recent years. Named as
the "billion dollar industry", "Salanganes Nest Industry" has created an estimated
revenue of 200 million USD every year in Vietnam with the annual growth of 25%.
"Salanganes Nest concrete buildings" simulating natural caves have appeared
throughout Vietnam. With the capital of construction at about 70,000 –
500,000USD, and monthly expenses at about 50 USD, "Salanganes Nestconcrete
buildings" can earn abour 1 mil VND per year. This field has also become more and
more dynamic with a series of accelerating productions, pluns an expanding
distritution network of enterprises after the participation of some foreign investors.
From the above situation, I have chosen the topic “IMPORT ACTIVITIES IN
MATERIALS AND MACHINERY FOR THE PRODUCTION OF
SALANGANES NEST PRODUCTS IN KHANH HOA SALANGANES NEST
COMPANY – HO CHI MINH CITY BRANCH” in order to analyze the situation
of import activities of the production materials to produce salanganes nest products
of the Branch within the period from 2011 to 2013 as well as suggest solutions to
improve the import activities of Khanh Hoa Salanganes State-owned One-member
limited liability company in the upcoming time periods.
The report shall include these main points:
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Chapter One: INTRODUCTION OF KHANH HOA SALANGANES NEST STATE-

OWNED ONE-MEMBER LIMITED LIABILITY COMPANY – HO CHI MINH CITY
BRANCH
Chapter Two: CURRENT SITUATION OF IMPORT ACTIVITIES IN
PRODUCTION MATERIALS AND MACHINERY IN KHANH HOA SALANGANES
NEST STATE-OWNED ONE-MEMBER LIMITED LIABILITY COMPANY – HO
CHI MINH CITY BRANCH
Chapter Three: THE OUTLOOK, ORIENTED DEVELOPMENT AND
RECOMMENDATIONS FOR PROMOTION OF IMPORT ACTIVITIES IN KHANH
HOA SALANGANES NEST STATE-OWNED ONE-MEMBER LIMITED LIABILITY
COMPANY – HO CHI MINH CITY BRANCH
To complete this report well, first of all, I would like to show deepest thanks to
Khanh Hoa Salanganes Nest State-owned one-member limited liability company –
Ho Chi Minh Branch and my instructor Ms. Vu Tran Nguyen Minh for your
enthusiasm in guiding along with giving me valuable comments and instructions for
my internship at the company and this mid-term report.
I would also like to express my sincere thanks to Ms. Phung Minh Duc - lecturer at
the Foreign Trade University in HCMC who has dedicated guidance and support to
me during the internship to complete this thesis.
Despite many great efforts, due to limited time, knowledge and experience, this
mid-term report still has some mistakes and weaknesses. As a result, I really hope
that you can give me more feedbacks and advices so that I can improve it better.
Ho Chi Minh, July 5th, 2014
Student Pham Phuong Nga
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FOREIGN TRADE UNIVERSITY ..................................................................................... 1

HO CHI MINH CITY CAMPUS ......................................................................................... 1
PREFACE ........................................................................................................................ 2
LIST OF CHARTS AND TABLES ................................................................................. 6
Chapter 1: INTRODUCTION OF KHANH HOA SALANGANES NEST STATE-
OWNED ONE-MEMBER LIMITED LIABILITY COMPANY – HO CHI MINH
CITY BRANCH ............................................................................................................... 7
1.1. History of establishment and development of Khanh Hoa Salanganes Nest
Company – Ho Chi Minh Branch .................................................................................... 7
1.1.1. The foundation and development of the branch .................................................... 7
1.1.2. Khanh Hoa Salanganes Nest Company – Ho Chi Minh Branch ‘s
achievements .......................................................................................................................... 8
1.2. Functions of Khanh Hoa Salanganes Nest Company – Ho Chi Minh Branch ...... 8
1.4. Organizational structure ......................................................................................... 9
Functions of main departments ........................................................................................... 10
1.5. Business outcomes of Khanh Hoa Salanganes Nest Company – Ho Chi Minh
branch from 2011 to 2013 .............................................................................................. 11
1.6. Role of import activities to Khanh Hoa Salanganes Nest Company – Ho Chi
Minh Branch................................................................................................................... 12
1.7. Competitive position of Khanh Hoa Salanganes Nest Company – Ho Chi
Minh Branch................................................................................................................... 14
1.8. Describe the tasks completed at Khanh Hoa Salanganes Nest Company – Ho
Chi Minh Branch ............................................................................................................ 14
CHAPTER 2: CURRENT SITUATION OF IMPORT ACTIVITIES OF
PRODUCTION MATERIALS AND MACHINERY IN KHANH HOA
SALANGANES NEST STATE-OWNED ONE-MEMBER LIMITED LIABILITY
COMPANY – HO CHI MINH CITY BRANCH .......................................................... 15
2.1. Describe and analyze the current situation of import activities at Khanh Hoa
Salanganes Nest Company – Ho Chi Minh City Branch ............................................... 15
2.1.2. Structure of import ítems ...................................................................................... 16
2.1.3. Structure of import markets ................................................................................. 17
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2.2. Evaluation of the import activities of Khanh Hoa Salanganes Nest Company ... 19
2.2.1. Achievements ........................................................................................................ 19
2.2.2. Drawbacks ............................................................................................................. 20
CHAPTER 3: THE OUTLOOK, ORIENTED DEVELOPMENT AND
RECOMMENDATIONS FOR PROMOTION OF IMPORT ACTIVITIES IN
KHANH HOA SALANGANES NEST STATE-OWNED ONE-MEMBER
LIMITED LIABILITY COMPANY – HO CHI MINH CITY BRANCH .................... 21
3.1. Opportunities ........................................................................................................ 21
3.2. Threats .................................................................................................................. 21
3.3. Recommendations for promoting import activities at the Khanh Hoa
Salanganes Nest Company – Ho Chi Minh City Branch ............................................... 21
3.4. Recommendations to the State and competent authorities .................................. 22
REFERENCE ................................................................................................................. 24
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LIST OF CHARTS AND TABLES

No. Charts/ Tables Page

1 Chart 1.4 Organizational structure of Khanh Hoa Salanganes 10
Nest Company – Ho Chi Minh Branch
2 Table 1.5 Business outcomes of Khanh Hoa Salanganes Nest 11
Company –Ho Chi Minh Branch from 2011 to 2013 (Unit:
mil VND)
3 Table 1.6 The proportion of import within total expenses of 13
Salanganes Nest Company – Ho Chi Minh Branch from
2011 to 2013
4 Table 2.1.1 Import Turnover of Khanh Hoa Salanganes Nest 15
Company- Ho Chi Minh Branch from 2011 to 2013
5 Table 2.1.2 Structure of import items – cans and bottles of 16
Khanh Hoa Salanganes Nest Company – Ho Chi Minh
Branch from 2011 to 2013
6 Table 2.1.3 Structure of import markets from 3 biggest 17
markets – Korea, Thailand, Singapore from 2011 to 2013
(%)
7 Chart 2.1.4: Import Procedures of glass production materials 18
of Khanh Hoa Salanganes Nest Company – Ho Chi Minh
Branch
 7

Chapter 1: INTRODUCTION OF KHANH HOA SALANGANES NEST

STATE-OWNED ONE-MEMBER LIMITED LIABILITY COMPANY – HO
CHI MINH CITY BRANCH
1.1. History of establishment and development of Khanh Hoa Salanganes
Nest Company – Ho Chi Minh Branch
1.1.1. The foundation and development of the branch
On October 26th, 2009, according to decision No. 2692/QD-UBND of the People's
Committee of Khanh Hoa Province, Khanh Hoa Salanganes Nest Company was
changed into State-owned one-member limited liability company Khanh Hoa
Salanganes Nest Company and the Company has been operated so far.
In 2004, Ho Chi Minh branch was established.
The company is the leading brand in Vietnamese and regional Salanganes Nest
industry with a lot of awards such as Vietnamese high-quality products (Hàng Việt
Nam chất lượng cao) in 2005, Vietnamese Strong Brand (Thương hiệu mạnh Việt
Nam) in 2008, top 10 of Vietnamese prestigious brands (top 10 thương hiệu Việt uy
tín), top 10 WTO integration brand (top 10 thương hiệu Hội nhập WTO) in 2008...
would create a lot of future opportunities for the Ho Chi Minh branch to establish
partnership with new potential domestic and foreign partners.
General information of the Branch
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Name of transaction: CÔNG TY TNHH NHÀ NƯỚC MTV YẾN SÀO KHÁNH
HÒA – CHI NHÁNH THÀNH PHỐ HỒ CHÍ MINH
English name: KHANH HOA SALANGANES NEST COMPANY – HO CHI
MINH BRANCH
Address: 540 3/2 Street, Ward 14, District 10, Ho Chi Minh City
Phone number: (08) 38655495
Fax: (08) 38657286
Tax code: 4200338918-001
Website: www.yensaokhanhhoa.com.vn
1.1.2. Khanh Hoa Salanganes Nest Company – Ho Chi Minh Branch ‘s
achievements
After 10 years of establishment, it has become the leading subsidiary of the
Company in Vietnam, constituting 1/3 of the the whole company and has received
many awards such as Government Labour Medals (Huân chương lao động chính
phủ), the leading branch in terms of revenues in 3 consecutive years.
Khanh Hoa Salanganes Nest Company Ho Chi Minh Branch has accomplished its
business targets, from date of establishment with only 25 employees until now with
250 employees, with 3 different departments – Accounting Department, Export-
Import Department and Department of Administration. Moreover, the domestic
business department was separated into different market groups: in Ho Chi Minh
city with 15 market groups, the Western area with 13 market group and the Eastern
area with 34 market groups. Import markets have also expanded to Taiwan, the U.S,
Germany, Italy, Thailand,…

1.2. Functions of Khanh Hoa Salanganes Nest Company – Ho Chi Minh

Branch
The main operation sector of the branch is managing domestic trade of company
lines of products in the South of Vietnam, including chains of stores, showrooms,
supermarkets and other retail stores. In addition, the branch also operates in the
other fields as below
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- Importing and exporting, trading and exchanging of equipment, materials

and spare parts, accessories, supplies, finished or semi-product of the
Salanganes Nest processing industry.

1.3. Building artificial salanganes nest houses, public worksTasks of Khanh

Hoa Salanganes Nest Company – Ho Chi Minh Branch
Salanganes Nest Company – Ho Chi Minh Branch is responsible for expanding and
developing Southern market, promoting the consumption of Company products and
promoting import activities of production commodities and machinery.
The product line of Salanganes Nest Company – Ho Chi Minh Branch is very
diverse with pure nests, high-quality Sanest soft drinks, Sanna minerals, high-
quality Sanestfood....Thus, targeted customers of Salanganes Nest Company – Ho
Chi Minh Branch are agents, distributors, system of stores and showrooms in Ho
Chi Minh region, South East Vietnam, South West Vietnam and Cambodia branch.
For import activities, the company is now very dynamic, expanding both in import
values and import markets, not only from familiar markets such as Korea, Thailand,
Taiwan and Singapore, but the branch has also imported modern machinery from
European countries such as Germany, Italy.
1.4. Organizational structure
Khanh Hoa Salanganes Nest Company – Ho Chi Minh Branch applied the
organization structure direct – functional type. It means that the companies are
divided into different specialized sections and departments with different functions
and tasks. Overally, organization structure of Salanganes Nest Company – Ho Chi
Minh Branch and scale are relatively reasonable, ensuring effective operation,
organization, management, and business activities of the Branch.
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Chart 1.4 Organizational structure of Khanh Hoa Salanganes Nest Company –

Ho Chi Minh Branch

DIRECTOR

DEPUTY DIRECTOR

DEPARTMENT OF DEPARTMENT OF DEPARTMENT OF

ADMINISTRATION ACCOUNTING & TRADE AND
FINANCE EXPORT- IMPORT

(Source: Department of Administration of Salanganes Nest Company - Ho Chi

Minh Branch)
Functions of main departments
Director is the person in charge of operating and directing business acitivities of
Salanganes Nest Company – Ho Chi Minh branch. Deputy Director is the person
supporting the Director.
Department of trade and export – import is in charge of managing the consumption
of the Company products in the Southern Region of Vietnam as well as being in
charge of working with agents and distributors; directing business strategy of export
and import of the branch, implementing marketing, market research, market
expansion acitivites as well as attract new customers, directing and managing
export-import acitivities and implementing foreign trade business activities.
Department of Administration is in charge of receiving outside information to the
branch, processing information according to function, powers of the department;
organizing workshops and seminars; composing and presenting internal and
external documents to the Director and being responsible for the legality of those
documents; issuing, storing and securing the seal as well as ensure documents to be
exact, timely and safe; managing sanitary work, labour safety, fire prevention at the
office and at public, labour health care – regular and irregular health checks.
 11

Department of finance and accounting is in charge of collecting and processing

information, accounting data, with accounting standards and model; checking and
supervising incomes and expenses, duties, debt settlement; checking the
management, use of assets and asset source form, detecting and preventing illegal
actions in terms of finance and accounting; analyzing data, advising, suggesting
solutions serving management requirements and decisions of the branch in terms of
business and finance.
1.5. Business outcomes of Khanh Hoa Salanganes Nest Company – Ho Chi
Minh branch from 2011 to 2013
Table 1.5. Business outcomes (revenues, expenses, income after taxes) of
Khanh Hoa Salanganes Nest Company – Ho Chi Minh branch from 2011 to
2013
Unit: mil VND
No Targets 2011 2012 Năm 2013
1 Revenues 512,624 789,037 964,193
2 Expenses 435,731 671,682 840,565
3 Income before taxes 76,893 117,355 123,628
4 Income after taxes 57,670 88,016 92,721

(Source: Reports of business activities of Khanh Hoa

Salanganes Nest Company – Ho Chi Minh Branch from 2011 to 2013, Internal
Documents)
The revenues of the branch steadity increased from 2011 to 2013, from 512,624
milVND in 2011 to 964,193 milVND in 2013 because of the continuous expansion
in business activities and manufacturing activities of the branch with 3 new
factories opened and new product line launched, especially the Collagen product
line. The branch’s revenues in 2012 has increased by 53.9% compared to that of
2011. Similarly, the branch’s revenues in 2013 increased by 22.2% compared to
2012. The revenue increased more steadily from 2011 to 2012, compared to 2012-
2013 due to the expansion of the company’s production lines, resulting in the
expansion of sales turnover. From 2012 to 2013, the revenues also increased but not
 12

as dramatically due to the bleak economic situation, resulting in the reduction in

consumption and increase in expenses.
Similarly with the increase in revenues, the expenses also had an upward trend.
Expenses in 2012 increased by 54.2% compared to that of 2011 (from 435,731
milVND in 2011 up to 671,682 mil VND in 2012), resulting from the expansion of
the company’s manufacturing and infrastructure with newly built production and
processing factories, requiring the large number of import materials and machinery.
The expenses in 2013 increased by 25% compared to that of 2012 (from 671,682
mil VND in 2012 up to 840,565 mil VND in 2013), resulting from the stable growth
and expansion of the branch in particular and the company in general. Therefore,
the expenses increased slower than the increase in revenues but still increased due
to the expansion in production and business activities.
The total income after taxes of the branch had the rate of increase almost equal to
the rate of increase of revenues and expenses, about 52% from 2011 to 2012 (due
to the dramatical increase of revenue from 2011 to 2012); and only 5% from 2012
to 2013 (57,670 mil VND in 2011, 88,016 mil VND in 2012 and 92,721 mil VND
in 2013). This could be explained by the economic recession and the inflation rate
which made the expenses increase slower than revenues.
1.6. Role of import activities to Khanh Hoa Salanganes Nest Company – Ho
Chi Minh Branch
Import is an important activity in the Foreign Trade activities in general and import
has a direct impact on the production activities of the branch in general. With its
motto, Salanganess Nest Company – Ho Chi Minh branch always wants to bring
perfection to every single product from quality to models. Therefore, for
production, the branch imports modern technology lines to increase the outputs,
make better product designs since the domestic supplies cannot meet the demands
of the Company. Import plays a positive role to promote export activities. With
modern technology, production materials from import, the quality of products will
be improved, meeting the world demands and creating favourable conditions for
Vietnamese products to be exported to the world market.
 13

Table 1.6 The proportion of import within total expenses of Salanganes Nest
Company – Ho Chi Minh Branch from 2011 to 2013
2011 2012 2013
Expenses from 24,627 255,499 193,563
import activities
(mil VND)
Total expenses 435,731 671,682 840,565
(mil VND)
Proportion (%) 5.65% 38.04% 23.03%

(Source: Report of Export- Import Department of Khanh Hoa Salanganes Nes

Company – Ho Chi Minh Branch)

In 2011, the import values only accounts for 5.65%, which is quite low. The reason
is that in 2011, the Company still focuses on developing domestic markets and
doing Research and Development steps to prepare for great investment in 2012.
Therefore, in this year, there were no considerable import activities. However, in
2012, the import values accounts for 38.04%, since in this year, the Company was
expanded with 3 new factories - Cam Thinh high-quality salanganes nest soft drink
factory, Sanna Cam Thinh soft drink factory, Dien Khanh Salanganes Nest
Commodity Processing Factory, resulting in the import of machinery such as
Automatic Sterilized Pots, Touchscreens, Liquid level measurement devices. The
Company has also developed new product line – especially Collagen, requiring the
import of more production materials like cans, class bottles, lids. In 2013, the
proportion of import decreased compared to that in 2012 (23.03%), since in this
year, the branch only imported anual production materials, not production
machinery.
The import activities have been playing a more and more important role in
development of Khanh Hoa Salanganes Nest Company, especially when the
Company decided to carry out important investment decisions.
 14

1.7. Competitive position of Khanh Hoa Salanganes Nest Company – Ho Chi

Minh Branch
Salanganes Nest Company - Ho Chi Minh Branch has been now facing a lot of
competition from domestic salanganes companies such as Can Gio Anpha
Salanganes Company, Sai Gon Anpha Salanganes Company, or foreign Company
in Vietnam such as Cerebos from Thailand company due to the increase in import
of salanganes nest products from other ASEAN countries into Vietnam such as
Thailand, Malaysia and the development of in-door bird nest raising technology.
However, the Company in general and the Branch in particular are still proving to
be the leading Enterprise in salanganes nest products with high quality in the
materials and production technology as well as diverse product models.
1.8. Describe the tasks completed at Khanh Hoa Salanganes Nest Company –
Ho Chi Minh Branch
- Entering data, photocopying and printing some files concerning import
activities
- Translating Vietnamese data into English
- Talking to employees in the Company to understand more about their work,
their working environment and have a more positive view about state-owned
companies.
Although the working internship lasts only 1 month but I feel that this is a really
precious and practical chance for me to develop and learn more from what I can
learn at university. Moreover, I had the chance to approach to the business
environment, understand more about the way of organizing and working styles of
the business and that is the most valuable thing to me and to the major I am
studying.
 15

CHAPTER 2: CURRENT SITUATION OF IMPORT ACTIVITIES OF

PRODUCTION MATERIALS AND MACHINERY IN KHANH HOA
SALANGANES NEST STATE-OWNED ONE-MEMBER LIMITED
LIABILITY COMPANY – HO CHI MINH CITY BRANCH

2.1. Describe and analyze the current situation of import activities at Khanh
Hoa Salanganes Nest Company – Ho Chi Minh City Branch
2.1.1. Import Turnover

Table 2.1.1 Import Turnover of Khanh Hoa Salanganes Nest Company- Ho

Chi Minh Branch from 2011 to 2013

Year Import Turnover (mil VND) Growth in import turnover (%)

2011 23,066
2012 162,515 604.57
2013 193,480 19.05

(Source: Report of Export - Import of Khanh Hoa Salanganes Nest Company – Ho

Chi Minh Branch)
The import turnover from 2011 to 2012 increased dramatically by 604.57% from
23,066 mil VND to 162,515 mil VND. The reason is that in 2012, the Company has
conducted many production and business strategies such as investment into high-
quality Salanganes Nest Soft Drink Factory – Cam Thinh with the capacity of 50
mil units per year, Salanganes Nest processing Factory Dien Khanh with the
capacity of 30 mil units per year, Sanna soft drinks with the capacity of 30 mil units
per year, Khanh Hoa Salanganes Nest Company in Cambodia, Salanganes Nest
Center in Phu Yen, Salanganes Nest Habour and many other showrooms throughout
Vietnam. This required the intensive improvement in production technology as well
as the dramatic increase in importing production materials, resulting in the dramatic
increase in import turnover in 2012, compared to that in 2011.
 16

Although targets of revenues and profits of the Branch in 2013 increased compared
to other years before, the growth is slower compared to 2012 by only 19.05% of
growth. One of the reasons is the fluctuation in the world and domestic economy,
the saturation of the market. Simultaneously, the competition against new
competitors with beautiful designs and cheaper prices somehow decreased the
market share of the Branch domestically, resulting in the reduction of import
activities. This is a challenge that the Branch in particular and the Company in
general having to face to maintain its stability.
2.1.2. Structure of import ítems
Table 2.1.2 Structure of import items – cans and bottles of Khanh Hoa
Salanganes Nest Company – Ho Chi Minh Branch from 2011 to 2013
Year 2011 2012 2013
Value Proportion Value Proportion Value (mil Proportion
(mil (%) (mil (%) VND) (%)
VND) VND)
Items
Cans 3,953 47.4% 56,527 65.5% 118,621 83%
Class 4,379 52.6% 29,717 34.5% 24,324 17%
bottles
Total 8,332 100% 86,244 100% 142,945 100%
(Source: Report of Export - Import of Khanh Hoa Salanganes Nest Company – Ho
Chi Minh Branch)
The import values of cans tended to increase dramatically over the years from 2011
to 2013. From 2011 to 2012, the import values of bottles increased by 52,574 mil
VND (equivalent to a 1330% increase) and from 2012 to 2013, it continued to
increased by 62,094 mil VND (equivalent to a 111.3 % increase) Similarly, in 2012,
the import of values of class bottles rose by 25,338 mil VND (equivalent to a 578.6
% rise) compared to 2011. This explains the development in production and
business acitivites of the Branch and the Company, especially after 2012 when a lot
of the Company’s production infrastructure was built to expand production lines
and increase outputs.
 17

However, in 2013, the import values of class bottles decreased by 5,393 mil VND
(equivalent to a 18.1% decrease). Moreover, the proportion between of cans
continued to increase steadiy compared to class bottles. There was an increase in
can proportion by 18.1% in 2012 compared to 2011, and an increase by 17.5% in
2013 compared to 2012. In the period from 2011 to 2013, one of the main strategies
of the companies was to expand the consumption markets, especially the domestic
market and expand the production lines. Therefore, the companies also aimed at a
mass of customer targets. Therefore, the can line was more easily conquered the
market due to its reasonable prices and its functions serving as both soft drinks and
nutritious food. The can line is one of the cheapest product lines of the Company.
On the other hand, the glass bottle lines are more expensive and serve only 1
function which is a kind of nutritous food. Therefore, it does not attract as many
consumers as the other one. Since the demands for can lines continuously increased
over the years 2011 to 2013, the supplies had to increase as well and the import of
cans increased.
2.1.3. Structure of import markets
Table 2.1.3 Structure of import markets from 3 biggest markets – Korea, Thailand,
Singapore from 2011 to 2013 (%)
Unit: mil VND
No Countries 2011 Proportion 2012 Proportion 2013 Proportion
(%) (%) (%)
1 Korea 3,953 17.14% 56,527 34.78% 118,621 61.31%

2 Thailand 4,379 18.98% 29,717 18.29% 24,324 12.57%

3 Singapore 14,734 63.88% 76,271 46.93% 50,535 26.12%

Total 23,066 100% 162,515 100% 193,480 100%

(Source: Report of Export - Import of Khanh Hoa Salanganes Nest Company – Ho

Chi Minh Branch)

The proportion fluctuation is also similar to the proprotion in import values of the 2
main import ítems. Since the branch imported cans from Korea, glass bottles and
 18

bottle lids from Singapore and Thailand. The Company first aimed at developing
nutritous lines, however, then from 2012 to 2013, aimed at a bigger market segment
and developing the cheaper soft drink lines. Moreover, it is also favourable to
choose the 3 markets in Singapore, Thailand and Korea as they are very popular
import markets of not only Salanganes Nest Company – Ho Chi Minh Branch but
also many other Vietnamese companies. Therefore, the costs of transportation can
be reduced and creating long-term partnership with partners from these 3 markets
can also give favourable conditions for the Branch to ensure its stable suppliers over
the years.

2.1.4. Mode of transports and payment methods in import activities of

Khanh Hoa Salanganes Nest Company – Ho Chi Minh Branch

Chart 2.1.4: Import Procedures of glass production materials of Khanh Hoa

Salanganes Nest Company – Ho Chi Minh Branch

Complaint and
Opening LC and dispute settlement
purchasing insurance (if any)

Doing customs Receiving and

clearance for doing good Payment
import of goods inspection

(Source: Department of Trade and Export-Import of Khanh Hoa Salanganes Nest

Company – Ho Chi Minh Branch)
 19

Mode of transport:
Due to the nature of the imported materials, which are either delicate as well as the
geographic position of exporting countries, the Company applies maritime transport
for almost all of its imported glass materials. The purchase of insurance also
depends on the contract principles, but normally, the Company would purchase the
insurance of 110% contract total values and insurance fee of 0.45%.
Payment methods
The Company often applies payment L/C for most of its international transactions.
The popularly used L/C is irrevocable L/C and the opening of L/C depends on the
contract principles agreed by both parties.
In case of payment by irrevocable L/C, the Company ‘s bank shall check and inform
the company after receiving the documents from suppliers. The Company shall
receive documents, sign draft and send B/L to the branch. The branch shall then
take the B/L to the arrival Port to receive the goods.
2.2. Evaluation of the import activities of Khanh Hoa Salanganes Nest
Company
2.2.1. Achievements
Firstly, the import strategies of the branch are quite reasonable as it focuses on
specialized import, which means it does not import all of the products from one
country but import each item from diverse countries, like cans from Korea, class
bottles from Thailand, class bottle lids from Singapore or modern machinery from
Germany and Italy. This strategy ensures the stability of supplies in quanity and
also quality as each supplier is specialized in producing every single item.
Secondly, imported materials of the branch are common and do not need too
difficult conditions to produce in imported countries, which would ensure the stable
supplies of these materials for such a long period of time.
Thirdly, the branch has established long-term relationship with many reliable
suppliers and enjoyed a lot of incentives of theirs. Moreover, the branch has also
established commitment with every single supplier in terms of quality, prices and
other conditions in order to have long-term prestigious partners.
 20

Finally, the branch has an excellent manager team and skillful, experienced and
active workforce being regularly trained to meet the job requirements.
2.2.2. Drawbacks
Firstly, the companies have maintained the long partnership with some specific
markets without expanding the import markets, which might be a risk. Firlthough
maintaining a long-term partnership is a good chance to get incentives and
favourable cooperation opportunities, it might contain a threat since the company
will depend on specific suppliers and when there is something wrong with the
suppliers, the company will not have any replacements.
For examples, the intensive competition with other Salanganes Nest Companies, as
some of the branch’s import markets such as Thailand or Taiwan are also
developing salanganes industry. Thus, in the long-term, companies in these
countries can be a threat to the branch in terms of suppliers as the government of
these countries might issue the article in which suppliers have to favour the
domestic producers.
Secondly, annual import lines like class bottles are quite common and can easily
have competitors in terms of supply or the company product lines might be
mistaken with other domestic and international brands.
 21

CHAPTER 3: THE OUTLOOK, ORIENTED DEVELOPMENT AND

RECOMMENDATIONS FOR PROMOTION OF IMPORT ACTIVITIES IN
KHANH HOA SALANGANES NEST STATE-OWNED ONE-MEMBER
LIMITED LIABILITY COMPANY – HO CHI MINH CITY BRANCH
3.1. Opportunities
Firstly, Salanganes Industry has a long history of development and is at the
booming stage of development, considered as one of the focuses of our Government
to develop Vietnamese economy.
Secondly, the living standards have been greatly improved. People now care about
their health more and besides daily products, the demand for nutritious lines of
products has also increased. With the slogan “For a better community health, a
better ecological environment and stable development”, the Company has now been
the trustworthy suppliers for many loyal customers inside and outside Vietnam.
3.2. Threats
Firstly, the instability of world economy in general and Vietnamese economy in
particular, the instability of Vietnamese law and principles related to importation of
production materials and machinery.
Secondly, the disadvantages of logistics in Vietnam and the limitation of the
Vietnamese position in the industry.
Thirdly, Vietnamese technology is not developed enough to meet the company
production demands. Therefore, in the near future, the Branch would still have to
import annual production materials with increasing prices.
3.3. Recommendations for promoting import activities at the Khanh Hoa
Salanganes Nest Company – Ho Chi Minh City Branch
Firstly, along with continuing to build good long-term partnership with key supplies
from main import markets, the branch always have to have substitute solutions in
order not to be dependent on any suppliers. Also, the department should
continuously get updates about the system of suppliers to take full advantage of
opportunities and expand the import markets in terms of minimizing costs and
quality improvement.
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Secondly, the company should do research on new design of production materials so

that company product lines would not be neither mistaken for products of other
brands nor have direct competitors in term of suppliers, creating an edge in import
activities for Ho Chi Minh Branch.
3.4. Recommendations to the State and competent authorities
Firstly, the government should simplify the import procedures, particularly the
customs formalities to facilitate the execution of the import contract, promptly
releasing the cargo to meet the enterprises’ demand of manufacturing in time.
Secondly, it is necessary to have completed and clear legal documents of rules and
import tariff system for the convenience of import companies during implementing
related procedures.
Finally, the State and competent authourities should take fast actions in supporting
and providing information in time about the domestic and international market
situations as well as domestic demands and supplies so that Vietnamese companies
can have suitable development strategies.
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CONCLUSION
After almost 10 years of operation, Khanh Hoa Salanganes Company – Ho Chi
Minh Branch has encountered a lot of difficulties and challenges. However, the
branch is taking steps to assert its position in the field of logistics, constantly
expanding business relations domestically and internationally, bringing back to the
Company many business opportunities not only in Vietnam but also from countries
around the world. Despite the intensive competition, with the motto of continuous
improvement in quality, building of an ideal working environment for their
employess and building trust in their customers, the branch is now proving to be the
leading business of the industry in Vietnamese southern region in particular and in
Vietnam in general.
Despite its great achievement and expeience, after 1 month observing in the Import-
Export Department of the branch, I realized that there are still many points that can
be improved. Therefore, with my limited knowledge, I would like to recommend
some solutions to improve the situation of import activities of the branch and
hopefully it can have a positive impact on the whole Company.
With the strong growth of export-import operations nowadays plus capability and
reputation which have been built for so long, I believe that Khanh Hoa Salanganes
Company- Ho Chi Minh Branch in particular and the corporation in general will
keep growing non-stop and much stronger to be the leading company in the world
salanganes nest industry.
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REFERENCE
1. Prof. Nguyen Hong Dam, Prof. Hoang Van Chau, Prof. Nguyen Nhu Tien,
MSc. Sy Tuan Vu (2005), Transportation and forwarding in foreign trade,
Hanoi Political Theory Publishing House.
2. Reports of business activities of Khanh Hoa Salanganes Nest Company – Ho
Chi Minh Branch from 2011 to 2013, Internal Documents
3. Reports of import activities of Khanh Hoa Salanganes Nest Company – Ho
Chi Minh Branch from 2011 to 2013, Internal Documents