FOREIGN TRADE UNIVERSITY HO CHI MINH CITY CAMPUS GRADUATION THESIS Major: International Business Management EXPORTING SVR 3L RUBBER OF VIETNAM TO INDIA Author: Duong Tan Vu Student ID: 0952015093 Class: K48CLC Supervisor: Dr. Nguyen Xuan Minh Ho Chi Minh City, May 2013 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT LIST OF ABBREVIATIONS LIST OF TABLES, CHARTS AND DIAGRAM INTRODUCTION. 1 CHAPTER 1: OVERVIEW OF RUBBER EXPORT OF VIETNAM TO INDIA .1 Overview of rubber export of Vietnam .2 Features and Competitive advantages of Vietnam’s natural rubber .3 Grades and Specifications .4 Factors affecting Exporting activities of Vietnam’s rubber .2 Overview of India’s rubber market .3 The necessity of improving the export of SVR 3L Rubber of Vietnam to India .1 Contribution of SVR 3L rubber to general rubber export of Vietnam .2 Contribution of Vietnam’s SVR 3L rubber to Indian Market .3 Contribution of Indian Market to Vietnam’s SVR 3L rubber exporting .4 Social – economics benefits of exporting SVR 3L rubber. 21 Summary of chapter 1.
23 CHAPTER 2: CURRENT SITUATION SVR 3L RUBBER EXPORT OF VIETNAM TO INDIA PERIOD 2007-2012 .1 Current situation of rubber export of Vietnam to India and the contribution of SVR 3L grade period 2007-2012. Rubber export turnover .2 Structure of natural rubber export .3 Rubber export price. 33 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.6 Trade promoting activities. Assessments of the current situation of SVR 3L rubber export of Vietnam to India.
Achievements and reasons. Limitations and reasons. 53 Summary of chapter 2. 54 CHAPTER 3: THE OUTLOOK, ORIENTED DEVELOPMENT AND RECOMMENDATIONS FOR PROMOTION OF SVR 3L RUBBER EXPORT OF VIETNAM TO INDIA .1 The outlook of SVR 3L rubber export of Vietnam to India period 2013 – 2018 .2 Oriented development and objectives of solutions .2 Objectives of solutions .3 Solutions for promotion of SVR 3L rubber export of Vietnam to India period 2013 – 2018 .1 Solutions for improving competitive advantages of SVR 3L rubber .2 Solutions for guaranteeing stable and sustainable sources of supply .3 Solutions for improving human resources .4 Solutions for development and innovation of production technology.
75 Summary of chapter 3. 78 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF ABBREVIATIONS Abbreviation Full word ADS Air-Dried Sheets AIRIA All India Rubber Industries Association ANRPC The Association of Natural Rubber Producing Countries ASEAN The Association of Southeast Asian Nations DRC Dry Rubber Content NR Natural rubber PLC Pale Latex Crepe RSS Ribbed Smoked Sheets SR Synthetic rubber TCVN Vietnamese Standards TSR Technically Specified Rubber VRA Vietnam Rubber Association VRG Vietnam Rubber Group DEPB Duty Entitlement Passbook Scheme DEEC Duty Exemption Entitlement Certificate SION Standard Input Output Norms DFIAS Duty Free Import Authorization Scheme DFRC Duty Free Replenishment Certificate EOU Export Oriented Units EPZ Export Processing Zones LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES, CHARTS AND DIAGRAM No. Type Name Page 1 Chart 1.1 World’s rubber production 4 Natural rubber production of major rubber producing 2 Table 1.2 World natural rubber consumption 6 Consumption of NR in main consuming countries in 4 Chart 1.3 6 2012 Area, output and productivity of Vietnam’s natural 5 Table 1.2 7 rubber period 2008 - 2012 Region-wise output and productivity of Vietnam’s 6 Table 1.3 7 natural rubber in 2011 Production type – wise output and productivity in 7 Table 1.4 8 2011 Vietnam’s natural rubber output, import and 8 Table 1.5 9 consumption in 2011 9 Table 1.6 End uses of NR 11 Key Indicators of Indian natural rubber industry 10 Table 1.8 India’s rubber production 15 12 Table 1.9 India’s rubber small holdings and estates 16 13 Table 1.10 India’s rubber consumption 16 14 Table 1.11 Import as percentage to consumption of NR of India 17 NR consumption per capita of major NR consuming 15 Table 1.12 17 countries in 2012 16 Table 1.13 India’s rubber consumption - sector wise 18 17 Table 1.14 India’s rubber consumption according to end products 19 18 Table 1.15 Major Export market of Vietnam’s SVR 3L in 2012 20 19 Chart 1.4 Bilateral trade between Vietnam – India 22 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 Rubber Export volume and value of Vietnam 24 21 Table 2.1 Origin-wise Vietnam’s natural export volume in 2012 25 22 Table 2.2 Top export market of Vietnam’s NR in 2012 26 23 Table 2.3 NR export turnover of Vietnam to India 28 Import Value of major NR import market of India in 24 Table 2.5 Export Rubber grades produced in Vietnam in 2012 29 26 Table 2.6 Export Turnover of SVR 3L Rubber 30 Main Rubber Grades of Vietnam exported to major 27 Table 2.7 31 market in 2012 28 Table 2.8 Export structure of Vietnam’s NR to India 32 29 Chart 2.2 Export value and export price of Vietnam’s NR 33 Average export price of major grades in Vietnam’s NR 30 Table 2.9 34 export to India Export Price of Vietnam’s SVR 3L to major export 31 Table 2.1 Supply chain of rubber from field to 35 producers/exporters 33 Table 2.11 Shipping term - wise export volume to different 37 markets in 2012 34 Table 2.12 Import Duty Structure for the year 2012-2013 44 35 Table 2.13 Import Duty Calculation 45 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. The necessity of the topic In the industrialization and modernization of the country, rubber industry has played an increasingly important part.
Rubber is an economic crop with social, economy and political benefits. Over years, Rubber is considered to be a major export product of Vietnam with export value of over 1 billion USD a year. Vietnam is now the 4th largest rubber exporter with presence in over 78 countries. However, a majority of Vietnam rubber is exported to China market, which contains many risks, especially in payment and price fluctuation.
This places a need to diversify the export market of Vietnam in recent years. Since 2010, India appears to be a very important strategic partner of Vietnam. Rubber export to India market has improved amazingly, especially SVR 3L grade. Aware of the importance and necessity of the diversification of Vietnam’s natural rubber and competitive advantage of SVR 3L grade, the writer has chosen the graduation thesis with topic: “Exporting SVR 3L Rubber of Vietnam to India”.
Research subject Research subject of this thesis is the export Vietnam’s SVR 3L rubber to Indian market. Research scope For content: The current situation about exporting activities of Vietnam’s SVR 3L rubber in India market in the period of 2008 – 2012. For time: research about export of Vietnam’s SVR 3L rubber to India market in the period from 2008 to 2012. Research objective The objective of this thesis is to evaluate export competitiveness of Vietnam’s natural rubber to India market in the period from 2008 to 2012, and give some suggestion about solution to improve export competitiveness of Vietnam’s natural rubber in the period of 2012-2020.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Research method The research methods are collecting, analyzing, comparing between theory and reality based on information sources of experts, researchers, associations, government agencies, enterprises and newspapers. Structure of the thesis includes 3 chapters: CHAPTER 1: OVERVIEW OF RUBBER EXPORT OF VIETNAM TO INDIA CHAPTER 2: CURRENT SITUATION SVR 3L RUBBER EXPORT OF VIETNAM TO INDIA PERIOD 2007-2012 CHAPTER 3: THE OUTLOOK, ORIENTED DEVELOPMENT AND RECOMMENDATIONS FOR PROMOTION OF SVR 3L RUBBER EXPORT OF VIETNAM TO INDIA Although a lot of effort has been invested in research and evaluating process, there are limitations in time and research resources therefore, the thesis might contain mistakes. As a writer, I welcome all comments from professors and my colleague for further development on my findings.
The writer would like to express my deep gratefulness to Vietnam Rubber Association, Dr. Tran Thi Thuy Hoa, Chief Secretary of Vietnam Rubber Association for sincere support. The writer would also like to say thank to lecturers of Foreign Trade University for knowledge and experiences, which is the key factor helping the writer complete this thesis, especially Associate Professor, PhD. Nguyen Xuan Minh for his devoted instructions.
Ho Chi Minh City, April, 2013 Writer Duong Tan Vu LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 CHAPTER 1: OVERVIEW OF RUBBER EXPORT OF VIETNAM TO INDIA 1. Overview of rubber export of Vietnam 1. General introduction The term "rubber" encompasses not only the natural product that yields from the tree Hevea Brasiliensis and other vegetative sources but also the variety of synthetic polymers or lesser degree to natural rubber. Generally, "rubber" is used in its wider meaning to encompass both the natural product and synthetic materials commonly known as "synthetic rubber".
However, in the scope of this thesis, “rubber” without any further explanation is referred as natural rubber. Natural rubber and synthetic rubber Physically, the properties of natural rubber (NR) are plasticity, resistance to electricity, adhesiveness and elasticity. Chemically, NR is a high-molecular weight terpene hydrocarbon polymer. NR is found in the lattices of over 2000 species of plants belonging to 311 genera of 79 families.
However, Hevea Brasiliensis now accounts for over 99% of NR produced and used because of high yield and low impurities. Contrary to NR, synthetic rubber (SR) has no specific chemical or technical connotation; it usually refers to a group of high-molecular weight polymers, having physical properties similar to NR. Collection of natural rubber Natural rubber is collected in form of latex, which is a neutral milky fluid flowing out of a cut on the bark of the tree. This fluid flows down to a collection container, which can be half shells of coconut or plastic cups… Latex should be collected as soon as possible after the flow has ceased, which may be 3 to 4 hours after tapping.
Latex is then transferred into galvanized iron buckets. Some trees will continue to drip after the collection and this leads to a small amount of "cup lump" which is collected at the next tapping. In some countries, farmers may intentionally collect rubber in form of cup lump instead of latex because it takes less labor. In terms of latex, tappers have to wait on field to collect latex from containers before coagulating.
For cup lump, they can come back after several days to collect cup lump in containers without having to wait on field. The LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 latex that coagulates on the cut is also collected as "tree lace". Tree lace and cup lump together account for 10–20% of the dry rubber produced. Latex that drips onto the ground is called "earth scrap", which is also collected for processing of low grade product.
Production trend Chart 1.1: World’s rubber production Unit: 1000 metric tons 60,000 50,000 40,000 30,000 Total Rubber Synthetic Rubber 20,000 Natural Rubber 10,000 0 2000 2002 2004 2001 2003 2005 2006 2007 2008 2009 2010 2011 2012 (Source: Natural rubber statistics 2012, Malaysian Rubber Board) The world rubber production increases very fast over years in general. In 2012, total rubber production reached over 26.4 million metric tons, increased by 1.31% over the previous year. The period 2008-2009 marked the crisis of global economy, so the world’s total production of rubber declined in this period and recover faster in 2010 with an increase of 11. The synthetic rubber production is more sensitive to the global economy than natural rubber production.
This is because natural rubber production is strongly affected by climate and rubber’s tree yield. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.