Analyzing the Actual Situation Exporting Cashew Nut of Cao Phat Co., Ltd to Netherlands Market

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VIETNAM GENERAL CONFEDERATION OF LABOUR
TON DUC THANG UNIVERSITY
FACULTY OF BUSINESS ADMINISTRATION
UNDERGRADUATION THESIS
ANALYZING THE ACTUAL
SITUATION EXPORTING CASHEW
NUT OF CAO PHAT CO., LTD
TO NETHERLANDS MARKET
by
Duong Boi Ngoc
advised by
Dr. Nguyen Thi Huyen Tran
Submitted to the Faculty of Business Administration
Ton Duc Thang University,
In Partial Fulfillment of the Requirements for the degree of
Bachelor
in International Business Management
Ho Chi Minh City

DECLARATION OF AUTHORSHIP
THE THESIS HAS BEEN ACCOMPLISHED
AT TON DUC THANG UNIVERSITY
I hereby declare that this thesis was carried out by myself under the
guidance and supervision of Dr Nguyen Thi Huyen Tran and that the work
contained and the results in this thesis are true and have not been either
submitted anywhere for any previous purpose or published in any other
literature. The data and figures presented in this thesis are for analysis,
comments, and evaluations from various resources by my own work and have
been fully acknowledged in the reference part.
In addition, other comments, reviews and data from other authors, and
organizations used in this thesis have been acknowledged, and explicitly
cited.
I will take full responsibility for any fraud detected in my thesis. Ton
Duc Thang University is unrelated to any copyright infringement caused on
my work (if any).
Ho Chi Minh City, 7/2018
Student
Duong Boi Ngoc

ACKNOWLEDGEMENT
Firstly, I would like to thank all teachers of Ton Duc Thang University, especially
teachers of the Faculty of Business Administration for giving me not only the
professtional knowledge but also the experience of living. Especially, I would like to
thank Ms Nguyen Thi Huyen Tran for guiding and helping me take advantage of the
situation during the thesis working, for spending lot of time to answer questions for me
to complete this essay.
I also would like to send my sincere thanks to the Board of Director and all the
employees in Cao Phat Company has given the opportunity and conditions for me
taking the information to analyze. I would like to thank Ms. Cao Thi Huynh Lien and
Ms Dao Thi Lan for providing detailed metrics, the manufacturing process and
carefully explain to help me understand the information clearly to complete the essay.
Lastly, I would like to send to all the teachers in Ton Duc Thang University along with
the Board of Direction and all the employe best wishes and good health.

TABLE OF CONTENTS
ACKNOWLEDGEMENT ..........................................................................................5
TABLE OF CONTENTS............................................................................................6
LIST OF TABLES AND GRAPHS............................................................................9
INTRODUCTION.......................................................................................................1
CHAPTER 1: THERETICAL BASIS ON EXPORT BUSINESS OF ENTERPRISE
IN VIETNAM .............................................................................................................3
1.1. The Concepts of Export Business ....................................................................3
1.2. Major Forms of Export of an Enterprise ..........................................................4
1.2.1. Direct Export .............................................................................................4
1.2.2. Export via Intermediary.............................................................................4
1.2.3. Processing Export ......................................................................................6
1.3. Role of Export Business Activities ..................................................................7
1.3.1. Using Resources Efficiently Solve Employment, Improving the Life
Standar .................................................................................................................7
1.3.2. Promoting Economic Restructuring ..........................................................7
1.3.3. Export Activities Create Capital for Imports, Serve Industrialization and
Modernization of the Country .............................................................................8
1.4. Factors Affecting Export Business Activities ..................................................8
1.4.1. External Factors.........................................................................................8
1.4.1.1. Strategy, Socio-Economic Development Policies And Laws.............8
1.4.1.2. The Current Exchange Rate................................................................9
1.4.1.3. Ability To Produce Exports ................................................................9
1.4.1.4. The Competitiveness of Domestic Exporters ...................................10
1.4.1.5. Development of Technical Facilities ................................................10
1.4.2. Internal Factors ........................................................................................10
1.4.2.1. Human Resource...............................................................................11
1.4.2.2. Financial Ability ...............................................................................11
1.4.2.. Organization and Management...........................................................11
1.4.2.4 Material Facilities ..............................................................................12
CHAPTER 2: THE ACTUAL SITUATION EXPORTING CASHEW NUT OF
CAO PHAT CO., LTD TO NETHERLANDS MARKET .......................................13
2.1 Overview of Cao Phat Company.....................................................................13
2.1.1 History and Development of the Company ..............................................13
2.1.2 Functions and Duties of the Company .....................................................15
2.1.2.1 Functions of the Company.................................................................15
2.1.2.2 Duties of the Company ......................................................................15
2.1.3 The Organizational Structure....................................................................16
2.1.3.1. Roles of Board of Director................................................................17
2.1.3.2. Roles of Sales Department................................................................17
2.1.3.3. Roles of Im-export Department ........................................................17
2.1.3.4. Roles of Accounting Department......................................................18
2.1.3.5. Roles of Administration Organization..............................................18

2.1.4 Types of Cashew Nut Export to Netherlands market...............................19
2.2 The Actual Situation Exporting Cashew Nut..................................................21
2.2.1 Analysis Revenue, Cost, Profit Table.......................................................21
2.2.2 Analysis the Results of Export to the Netherlands Market ......................24
2.2.3 Analysis Result Exported by Export Structure of Netherlands Market ...25
2.2.4 Analysis Result Exported by Product Categories.....................................27
2.2.5. Analysis Result Exported by Type of Export..........................................27
2.2.6 Payment and Commercial Terms for the Netherland Markets.................27
2.3 Factors affecting export business activities of Cao Phat Co., Ltd...................28
2.3.1 External factors.........................................................................................28
2.3.1.1 The Imports and Exports between Vietnam and the Netherland.......28
2.3.1.2 Culture- Society .................................................................................30
2.3.1.3 Policies...............................................................................................30
2.3.1.4 Technologies ......................................................................................31
2.3.1.5 Natural Factors...................................................................................31
2.3.1.6 Others (Suppliers, Competitors, Alternative Products, Customers) ..32
2.3.2 Internal factors..........................................................................................35
2.3.2.1 Human resource .................................................................................35
2.3.2.2 Finance...............................................................................................38
2.3.2.3 Company Culture ...............................................................................38
2.3.2.4 Material Facilities ..............................................................................39
2.4 Evaluation........................................................................................................41
2.4.1 Achievements ...........................................................................................41
2.4.2 Limitation..................................................................................................41
CHAPTER 3: POTENTIAL DEVELOPMENT, THE ORIENTATION TO
DEVELOP EXPORTING CASHEW NUT TO NERTHERLANDS AND
RECOMMENDATIONS WITH CAO PHAT CO., LTD ........................................43
3.1. The Potiential of Export Business Activities with Cashew Nut in the
Netherlands............................................................Error! Bookmark not defined.
3.2 SWOT analysis................................................Error! Bookmark not defined.
3.2.1 Internal factors..........................................Error! Bookmark not defined.
3.2.1.1 Strength (S) ........................................Error! Bookmark not defined.
3.2.1.2. Weakness (W)...................................Error! Bookmark not defined.
3.2.2 External Factors........................................Error! Bookmark not defined.
3.2.2.1 Oppotunity (O)...................................Error! Bookmark not defined.
3.2.2.2 Threat (T) ...........................................Error! Bookmark not defined.
3.3 Strategic Orientation Export to the Netherlands by 2025 ....Error! Bookmark
not defined.
3.4 Solutions to Promote the Export Activities to the Netherlands .............. Error!
Bookmark not defined.
3.4.1 Build More Warehouses ...........................Error! Bookmark not defined.
3.4.2 Enhance Online-Marketing Strategies......Error! Bookmark not defined.
3.4.3. Ensure Raw Material for Production .......Error! Bookmark not defined.

3.5. Suggestions.....................................................Error! Bookmark not defined.
CONCLUSION.........................................................Error! Bookmark not defined.
REFERENCE............................................................Error! Bookmark not defined.
Appendix 1................................................................Error! Bookmark not defined.
Appendix 2: Export business of cashew nuts according to market structure ... Error!
Appendix 3: Result export by price ..........................Error! Bookmark not defined.
Appendix 4: Export business of cashew nuts according to product categories Error!
Appndix 5: Customers’ list .......................................Error! Bookmark not defined.
Appendix 6: Balance Sheet of the Cao Phat in 2017 Error! Bookmark not defined.

LIST OF TABLES
Table 2.1: Results of production- business of the Cao Phat in 2014-2017...............21
Table 2. 2: Total revenues 2014-2017 ......................................................................21
Table 2. 3: Total costs 2014-2017.............................................................................22
Table 2. 4: Total profits 2014-2017 ..........................................................................23
Table 2. 5: Export Quantity 2014-2017 ....................................................................25
Table 2. 6: Export Revenue 2014-2017 ....................................................................26
Table 2. 7: Payment terms.........................................................................................28
Table 2. 8: Commercial terms...................................................................................28
Table 2. 9: Cashew nuts export in 2017....................................................................29
Table 2. 10: Suppliers ...............................................................................................33
Table 2. 11: Human resource structure by age..........................................................35
Table 2.12: Academic level and sex of Cao Phat employee in 2015-2017 ..............37
Table 2. 13: Positions................................................................................................37
Table 2.14: Machinery and equipment of Cao Phat in 2017 ....................................40
LIST OF FIGURES
Diagram 1.1: Organization of management apparatus of Cao Phat Company.........16
Figure 2. 1: Total revenue 2014-2017.......................................................................22
Figure 2. 2: Total costs 2014-2017 ...........................................................................23
Figure 2. 3: Total profits 2014-2017.........................................................................24
Figure 2. 4: Supliers provide raw cashew nut of Cao Phat Company 2017 .............33
Figure 2. 5: Export customers of Cao Phat in 2017..................................................34
Figure 2. 6: Structure by age of employees in 2017 .................................................36
Figure 3. 1: Cashew nut export to the Netherlands...Error! Bookmark not defined.

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INTRODUCTION
Since the early 1990s, the cashew nut export industry has grown rapidly,
according to the General Statistics Office, the export of cashew nuts in Vietnam has
increasing every year.
Cashew nuts are becoming one of the important export commodities of Vietnam.
Our country has grown rapidly and reached many marketshare from large
competitors such as India and Brazil. The three largest cashew import markets of
Vietnam in the past years are the United States, China and the Netherlands. For the
European area, Vietnam has found that the potential for cashew exports to this
market because the capital income is much higher than other area. In addition,
processed cashew nuts demand is gaining and become more popular, (Vietnam
Economic News, 2017). However, the standard for cashew nuts can be imported
into this area is very high, also require the enterprises need to learn technical skills
and investment more professionally. In 2013, the Vietnam cashew nut exports are to
11 markets of Europe, which led the Netherlands with 23.4 thousand tons, turn-over
of 160.3 million, this shows that the Netherlands will be the target market of
Vietnam in the coming time when entering the European market, (Xinhua, 2017)
Cao Phat Company is one of the largest production- export companies in the last
several years, the company has a tremendous contribution to the export turn-over of
Vietnam's cashew nut, so the export of cashew nut to Netherlands is a strategic
issue for the long-term development of the company. Facing with opportunities and
challenges, the export of the Cao Phat industry in particular and Vietnam in general,
how to produce more products processed from cashew nuts, not just export the
kernel. That really put the cashew nuts of Vietnam to new heights. Thus, it is
necessry to analyze the export situations of Cao Phat to find out the advantages and
disadvantages of the company.
Therefore, the topic: "Cashew Nut of Cao Phat Co. Ltd. to Netherlands market"
was selected to analyze the import and export situation of the company, while
offering solutions to increase the export capacity for further development of the

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cashew nut export industry, Vietnam has the advantage of having a large economic
value in the international market.

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CHAPTER 1: THERETICAL BASIS ON EXPORT BUSINESS OF
ENTERPRISE IN VIETNAM
1.1. The Concepts of Export Business
According to Article 27 of Commercial Law No. 36/2005 / QH11 dated 14 June
2005, the export business is:
- International trading of goods is carried out in the form of export, import,
temporary import/ re-export, temporary export/ re-import and transhipment. The
international sale of goods must be made on the basic of the contract in writing or
by other forms with legal value equivalent.
- Paragraph 1, article 27 of the law on trading of 36/2005/QH11 on 14 June in
2005 stipulates as follows: “Export of goods means the goods are taken out of the
territory of Vietnam or put into a special area located on the territory of Vietnam are
considered a separate customs area under the provisions of the law.”
- The purpose of export business is to exploit the advantages of the countries in
the international division of labor, to create foreign exchange earnings for the
country. Export activities take place in all areas, in all conditions with a variety of
different items. The scope of export activities is large in terms of space and time.
Export business is the activity of selling goods and services (either tangible or
intangible) to another country on the basis of using the currency as the basis for
payment. The products exported from Vietnam are usually agricultural products,
seafood, clothes, footwear, fashion accessories genuine brand of international
fashion processed in Vietnam ... To be Exported to foreign countries, these items
must meet the standards of the importing country, the processed products must meet
very strict standards of each brand before being exported, (OECD, 2014).
On the other hand, export business means the removal of goods from the
Vietnamese territory or the introduction into a special area located in the territory of
Vietnam, which is considered as a separate customs area as prescribed by law,
(VINALOGS, 2018)

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1.2. Major Forms of Export of an Enterprise
Export activities are performed under many different forms, but these follow
forms are the most popular.
1.2.1. Direct Export
Direct export is the form of business in which the seller (producer, who
provided) and buyers direct relations with each other (by meeting, through
electronic mail, credit) to discuss the agreement on merchandise prices and other
trading conditions. In the form of direct export, the two parties buy and sell directly
contract foreign trade. Contracts signed between the two parties must be in
accordance with national laws and international trade practice. Direct export form is
suitable for almost all types of enterprises, helping them take initiative in business
activities of their businesses. This type is also the choice of businesses who want to
assert their brand in the international market. (Export.gov, 2016).
In general, the outstanding advantage of direct export is the deep understanding of the
market situation, regularly updated the new needs and psychological change tastes of
customers to timely improve the product, best suited to that need. Therefore, export
companies can be dynamic with each foreign market. On the other hand, the company does
not have to bear the export costs of intermediates and profits are not shared. On the
downside, the company must spread its resources across a broader complexity of the
market, adopt a more intense international competition environment, accept all the risks of
overseas markets, (Export.gov, 2016).
1.2.2. Export via Intermediary
Export via intermediaries is an international form of purchase made with the
help of a third party. This third person is entitled to a certain amount of money.
Intermediaries in international transactions are agents and brokers. (Daoui, 2018)
In this form, the consignor will authorize another agents and brokers called the
consignee to conduct the export on behalf of the consignee. To carry out this form,
the entrusted enterprises should sign entrusted export contracts with domestic units.
The entrusted party will sign the contract of export, delivery and payment for the

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foreign unit and finally the export consignment fee from the consignee for export,
(Daoui, 2018).
Agent is a person or company entrusted to another person or another company
conducts the sale or service for the buyer such as advertising, transport and
insurance.
Classified agents within the scope of powers entrusted agent: (i) Universal
Agent: the agent authorized to act on behalf of the trustee to do all the work that the
trustee does; (ii) General Agent: The agent is only allowed to act on behalf of the
trustee to perform certain tasks such as signing a contract of sale; (iii) Special
Agent: The agent only carries out some limited work that the content of the work is
decided by the principal. For example, buy a volume of goods with quality and
price determined, (THE NATIONAL ASSEMBLY, No. 36/2005/QH11, 2006).
Classified according to the relationship between the agent and the trustee: (i)
Fiduciary Agent: The agent is assigned to act on behalf of the trustee, in the name
and cost of the trustee. Remuneration is usually a sum of money or a percentage of
the value of the consignment; (ii) Commission Agent: The trustee works on his or
her behalf, but at the expense of the trustee, the commission is a commission
depending on the volume and nature of the commission. entrustment; (iii) Merchant
Agent: An agent acting as agent and at his own expense, remuneration is the
difference between the selling price and the purchase price; (iv) Broker: is the
intermediary between buyer and seller. The broker does not own the name, does not
own the goods, is not responsible for non-performance of the contract. (THE
NATIONAL ASSEMBLY, No. 36/2005/QH11, 2006)
In export activities, especially when bringing goods to difficult markets or new
markets, enterprises will face many difficulties in payment methods, trade barriers
and customer search. Therefore, small and medium enterprises, export enterprises
with small quantity of goods if direct export will face many disadvantages, greatly
affecting the business. This fact makes many enterprises look to the form of

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intermediary export in addition to traditional online export. Thus, Export via
intermediary is the best choice for this.
Talking about the disadvantages of intermediaries, businesses usually pay
"commission" for the intermediary companies from 3-5% of the contract value.
Although the profit is reduced but businesses still have to do, because anyway, there
are customers still on top. In addition to profit sharing to a third party, many
intermediaries not only act as brokers, they bridge the gap between the business and
the international client base but also act as a commercial distributor. , then the brand
of the company will be lost, replaced by the brand of this distributor. Moreover, if
the company is still young, experience market is not much will be very easy to be
intermediary companies get more "commission" or not responsible when the
customer lawsuits, claim compensation
1.2.3. Processing Export
Processing export is the method of producing export goods. The foreign
outsourced supply: machinery, equipment, raw materials or semi-finished products
according to the form and norms given. Recipients domestic processing
organization manufacturing process product as required by the customer. All
products made outsourcing will hand over to the customer and receive money.
(UOB, 2018)
International processing or processing export is an activity of international trade,
based on certain criteria which are divided into many different types of processing.
as a base.
Firstly, it is detailed processing. The outsourcing party will outsource a product
detail that the outsourcing party requires. The outsourcing party will be the raw
materials deliverer and the detail form, and then receive the completed details from
the outsourcing party.
Secondly, it is complete processing of the product. The receiving party receives
the main and auxiliary materials (if any) and proceeds from the first stage to the
final stage to create finished products, then pack Code (if any) and then handed over

7
to the processing order, under the outsourcing contract. This method applies to
common goods, not the current point of the outsourcing party and the outsourcing
party is fully capable to complete the product.
Thirdly, the processing takes place in which the processing party shall process a
part of the product for the processing order (possibly the remaining part of the
product or part of the product processing stage). After finishing the processing
steps, the processor shall return the products to the processing party. This method
usually applies to goods where the outsourcer is unable to undertake the production
of the entire product or the name of the product associated with the reputation of the
company. This is a form of exploiting thoroughly the advantages of outsourcing the
import of production, cheap labor price, skill level enough to work well in that part,
(UOB, 2018).
1.3. Role of Export Business Activities
1.3.1. Using Resources Efficiently Solve Employment, Improving the Life
Standar
Thanks to the division of labor and the specialization of production in economic
alliances, each country has effectively utilized its resources. Export activities have a
positive impact on solving people's jobs. Moreover, Export activities affect many
aspects of people's lives. Production export goods attracts million of workers and
generates income and improve the people’s living standard.
1.3.2. Promoting Economic Restructuring
Under the impact of the export structure of production and consumption of the
world has changed dramatically. Exports is restructuring the national economy from
agriculture to industry and services. Export activities are also the consumption of
surplus products because the production exceeds the demand of the domestic, but
with the backward economy and slow development as our country, the production is
not enough for consumption. At the same time, the world market is an important
direction to the organisation of production, this positive impact to economic
restructuring, promote productive development such as: (i) Export activities

8
Facilitate to expand consumer markets that contribute to the development of
production, stability and ability to provide input to the production capacity of
domestic production; (ii) According to export goods, our country can participate in
the competition on the world market in terms of price and quality. This competition
requires us to reorganize production, formed the production structure to adapt with
the market; (iii) In addition, export activities exploits comparative advantages of the
economy country in its relationship with the area and globally, promoting
transformation of economic structure of the country and the pace of economic
growth, improving the performance of the national economy; (iv) Export activities
also promote specialization, enhance production efficiency of each country. Today,
there are many products that the manufactured parts are made in different countries.
To perfect the product, one must conduct export components from one country to
another to assemble finished products. Thus, each country can focus on producing a
few types that they have the advantage, then proceed exchanged for the goods they
need.
1.3.3. Export Activities Create Capital for Imports, Serve Industrialization
and Modernization of the Country
Export and import in international trade as the condition is both the premise of
each other, export to import, import to export. Especially in the economic condition
of our country, to develop the economy, get rid of poverty, hunger, avoid the risk of
lagging behind the world, the goverment need to conduct industrialization and
modernization. To do that, we need to have huge capital to import machine,
equipment, technology, advanced technology. Capital for import can be formed
from sources such as export of goods, services, debt, aid, foreign investment,
income from tourism, services, banking, etc.
1.4. Factors Affecting Export Business Activities
1.4.1. External Factors
1.4.1.1. Strategy, Socio-Economic Development Policies And Laws

9
Strategy, socio-economic development policies and laws relate to export
activities. This is not only a factor affecting the export performance of the current
business, but also in the future. Therefore, on the one hand enterprises must obey
and respond to the present, on the other hand enterprises must have the plan for
export in the future accordingly.
Vietnam is currently implementing an export-oriented strategy. This is a strategy
focused on creating export products that are more suited to the needs of global
markets based on the well-being of the needs of the national market. With this
strategy, the State has specific development policies for each period in order to
encourage all individuals and economic organizations to participate in export
activities, including foreign trade enterprises.
Encouragement of export activities is reflected in policies and measures related
to the creation of goods for export, creating favorable conditions for export,
financial support for exporting enterprises. (Amornkitvikai, 2012)
1.4.1.2. The Current Exchange Rate
The exchange rate is the price of a foreign currency in the domestic currency or
the relative value of the currency and the foreign currency. In the export business,
enterprises must pay attention to this factor as it involves the exchange of foreign
currency into the local currency of enterprises, thus directly affecting the export
efficiency of the enterprise.
In case the exchange rate is larger than the foreign exchange rate for export, the
enterprise may carry out export activities. Conversely, In case the exchange rate is
less than the foreign exchange rate of export, the enterprise should not export. In
order to know the exchange rate, the enterprise must be controlled by the
government's current exchange rate mechanism and monitored daily,
(Amornkitvikai, 2012).
1.4.1.3. Ability To Produce Exports
This capability ensures the source of goods for enterprises, manifest in the goods
can be produced with volume, quality specifications, designs, suitable for foreign

10
markets or not. This determines the competitiveness of the items when the company
offers to sell in the international market.
In case a country with a scientific and technological level develops, it is possible
to create a variety of commodities of international standard and high-priced and
aesthetic models. This is a very favorable condition for enterprises to participate in
export activities. In contrast, weak domestic production, with their monotonous and
rudimentary items, will limit their competitiveness and expand exports.
At present, in our country, the production capacity of export goods is still low,
the export items are simple and quality not up to international standards. This is a
difficulty for foreign trade enterprises when engaged in export activities,
(Amornkitvikai, 2012).
1.4.1.4. The Competitiveness of Domestic Exporters
Competition on the one hand has the effect of promoting the rise of businesses,
on the other hand it also squeezes and "drowns" the weak business. The level of
competition here represents the number of exporters of the same or similar goods.
At present, Vietnam has the policy of encouraging all businesses and all economic
sectors to participate in export, leading to the explosion of the number of enterprises
engaged in export activities, thus sometimes leading to competition. healthy. This is
a challenge for today's foreign trade enterprises, (Amornkitvikai, 2012).
1.4.1.5. Development of Technical Facilities
This is an element of the infrastructure for export. It includes the development of
transport systems, the transmission level of the communication system. These
factors can enhance or limit the trading capacity, expand the export market of the
business, enhance or restrict the transportation services of export goods of
enterprises.
The above are objective factors affecting the export activities of enterprises. In
addition, there are many other factors that businesses need to grasp and understand
it, (Amornkitvikai, 2012).
1.4.2. Internal Factors

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1.4.2.1. Human Resource
Humans are always placed at the center of all activities. The export of special
goods must emphasize the human element because they are the creator and direct
operator of the activities. The level and capacity of the export business will
determine the performance of the enterprise.
Employees are those who directly carry out the work of the goods export
process. Therefore, the level and capacity of their export activities will determine
the efficiency of the work, which determines the business performance of the whole
business. (Behyan, 2015)
1.4.2.2. Financial Ability
One of the most important factors affecting the enterprise's export is capital.
Apart from human factor, management organizations must have capital to realize
the export targets set by the enterprise. Financial capacity can limit or expand the
capabilities of the business because capital is the premise for all business activities
of the enterprises.
The financial capacity of enterprises is reflected in the current capital size and
ability to mobilize capital of enterprises. Financial capacity can limit or expand
other capabilities of the business, as capital is the premise for all business
operations of the business, (Behyan, 2015).
1.4.2.. Organization and Management
It is the direct influence of the leaders to the officials and employees to organize
the production and export of goods. Establishing the organizational structure of the
executive apparatus as well as the way managers leading plays a decisive role in
business efficiency. An enterprise with a rational structure of how to run business
will determine the business performance in general and export activities in
particularly.
This is a very important factor that determines the success of your business.
Because the level and ability of business management of the board of directors
allows businesses to have the right business strategies, ensuring businesses can take

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advantage of the opportunities of international markets on the basis of their inherent
ability, (Behyan, 2015).
1.4.2.4 Material Facilities
The material facilities of enterprises are indispensable factors in the operation of
each enterprise, which is the foundation for the production and business process of
enterprises. The investment facilities are reasonable not only help enterprises save
costs but also help enterprises have conditions to evidence the material to limit risks
to customers and contribute attraction with customers. In addition, modern technical
facilities are also conditions for enterprises to improve the quality of products as
well as working conditions and productivity of enterprises, (Behyan, 2015)

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CHAPTER 2: THE ACTUAL SITUATION EXPORTING
CASHEW NUT OF CAO PHAT CO., LTD TO
NETHERLANDS MARKET
2.1 Overview of Cao Phat Company
2.1.1 History and Development of the Company
CAO PHAT CO., LTD is a limited liability company with two or more members
established on 31 August 2007 under Business Registration Certificate No.
4902001766 issued by Department of Planning and Investment of Ba Ria - Vung
Tau. Established on September 5, 2007. Established under the Business License No.
3500813224 as amended by Department of Planning and Investment of Ba Ria -
Vung Tau Province on 14 November 2013.
Company name:
 Company name in Vietnamese: CÔNG TY TNHH CAO PHÁT
 Company name in English: CAO PHAT COMPANY LIMITED
 Abbreviated name: CAO PHAT CO., LTD
 Logo:
 Head Office: 200 – 202 Binh Da – Da Bac Road. Vinh Binh hamlet, Binh
Gia commune, Chau Duc District, Ba Ria Vung Tau Province.
 Tel: (84-64) 3982280
 Fax: (84-64) 3982281
 Transaction Office: 606/38/24 National Highway 13, Hiep Binh Phuoc
Ward, Thu Duc District, Ho Chi Minh City.
 Tel: (84-8) 36101447
 Fax: (84-8) 73010646
 Email: info@caophat.com.vn
 Website: www.caophat.com.vn
 Legal representative: CAO THÚC UY Position: Director

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 Capital: 1,500,000,000 VND
Recognizing that Vietnam's cashew export development trend has been
increasingly effective and promising, it is also challenging with the growing
imbalance in the supply of raw materials. For the processing of exports, Cao Phat
Co., Ltd is the company dare to send employees to other countries to seek raw
materials market and become one of the enterprises actively in organizing
purchasing import raw materials to supply raw materials in domestic market in the
early years of establishment.
To meet the growing demand, the company has been diversifying its activities
such as domestic trading, import and export, warehousing, investment in industrial
tree land, expansion of factory, drying yard, raw material warehouse with a land
area of 45,000 m2, investment in machinery, equipment and processing technology
are all changed and investment in the direction of mechanics. With the strengths,
Cao Phat has created good quality products, ensuring food hygiene and safety to
meet the requirement of customers, given the name of cashew nut of Cao Phat is
present in most of the world's large cashew nut consumption countries such as:
France, Australia, China, Netherlands, ...
One of the right paths and successful results for Cao Phat Company during the
way of establishment and operation is the promotion of the internal force of the
workforce throughout the company. Every year, Cao Phat Company always devotes
an appropriate proportion of capital accumulated from profits to focus on investing
in new equipment, applying new technologies to production, maintaining and
improving the quality management system follow ISO and HACCP.
The company has invested billions of VND for the upgrading, the construction
of spacious workshops, modern machines and equipment, the working conditions of
the workers have been significantly improved. The regime related to workers such
as labor contract, social insurance, health insurance, accident insurance, mid-shift
meal, the bonus system on holidays, Tet. In addition, the annual program of
performances, sport, sightseeing, tourism in and out of the country. In addition, Cao

15
Phat regularly organizes training courses to raise the level of professional skills for
managers, technicians and laborers. There is a reasonable reward system, reasonable
treatment and more harmonious relationship between employers and employees,
making the development in all aspects of the company.
Currently, Cao Phat Company Limited is a member of many prestigious
organizations and associations in Vietnam and abroad: Vietnam Cashew
Association (VINACAS), Non-profit Organization (SEDEX), The Association of
Exporters of Ba Ria-Vung Tau, the American Food Industries Association (AFI),
the European Food Association (CENTA).
Over the past 11 years of development, with more than 1,000 employees, with
the slogan "Good taste of cashew nuts connecting people", the company is
constantly striving to bring high quality products to the market. Cao Phat Company,
holding firmly the title of Prestigious Exporter, one of the leading companies in the
food processing industry of the province, to increase its competitiveness in the
international market.
2.1.2 Functions and Duties of the Company
2.1.2.1 Functions of the Company
Cao Phat investments in production, processing, trading and services in the
cashew industry.The company trades in materials, machinery and equipment for
cashew nut production, transportation, warehouse leasing, Purchasing, Processing,
Manufacturing. On the other hand, Cao Phat aslo expands production to solve more
and more jobs for employees, generate revenue for the company to stabilize,
improve the lives of staff.
2.1.2.2 Duties of the Company
Cao Phat’s business always complies with the regulations of the limited liability
company, management, operation and maintenance of the company, production
planning business. The company must do proper business registration with state
agencies, as well as understanding the market demand, supply ability to build and
implement effective business plan, as well as plan to invest in stable supply of

16
inputs. moreover, the company has to complete obligations to the government such
as implementation, compliance with tax obligations and budget remittances in
accordance with Vietnamese law. In addition, the company also implements the
dependent accounting system, statistical report, periodical report according to the
regulations of the company and the government, as well as observing the
regulations on recruitment, fulfillment of obligations and rights of employees in
accordance with the provisions of the Labor Code, ensuring the signing of contracts
with employees. To prioritize the use of domestic workers, respect the rights of
trade union organizations in accordance with the law on trade unions. And Cao Phat
implements the regulations of the govermnet on the protection of natural resources
and environment and national security.
2.1.3 The Organizational Structure
Cao Phat Company Limited is a legal economic organization with its own seal
and allowed to open accounts in Vietnam and foreign currencies at any bank.
At present, the company has staff team with profestional knowledge,
experienced, high responsibility and enthusiasm in work. Cao Phat Co., Ltd is a
manufacturing company, so it requires quite a lot of procedures. To achieve high
productivity not only due to the skill of the workers, but also the way of
organization of the company is also important. Therefore, Cao Phat Company
Limited has organized the company's apparatus as follows:
Diagram 1.1: Organization of management apparatus of Cao Phat Company

17
Organization management chart of the company is designed according to
functional structure. In the organization, there is two separate systems: the
management system and the service business system. Two of the system
organization always coordinate and support each other to ensure the progress of the
work as well as the development of company. Because of that, command
information from upper levels and feedback from subordinates are always quick,
accurate and efficient.
2.1.3.1. Roles of Board of Director
The board of director plays an important roles and responsibilities in the
company. Essentially, he has the right to hire all emplyees, as well as assessing the
overall direction and strategy for his company. Moreover, they act on behalf of the
shareholders to run the day to day affairs of Cao Phat. The board of director is
accountable to the shareholders. Each year the company will hold an annual general
meeting at which they provides a report to shareholders on the performance of Cao
Phat. Vice director of production, CEO and director of finance are directly
controlled by the board of director.
2.1.3.2. Roles of Sales Department
Sales department is one of the most important department in Cao Phat. The
sales staff are in charge of looking for the sales opportunities with the existing and
new customers to sell Cashew. Whenever, Cao Phat has a meeting, they will
organize effective presentation to their customers for their target products. The sales
manager takes responsibilities to identify the target budget for each year with
following-up percent of the budget realization each quarter of year. To do this, th
sales manager has to definite business opportunities with each customer to be
considered in the target budget or forecast list. Moreover, they should development
the rapports with all existing and new customers to know their future plan as well as
co-ordination with im-export department to reach the strategic goals.
2.1.3.3. Roles of Im-export Department

18
Im-export Department plays an important role in managing and carrying out
external activities, as well as analyzing, expanding and introducing products to
forign markets. They are in charge of exploiting and importing goods to supply raw
materials and goods for production, business and management. they also tak care fo
import and export activities of products manufactured and distributed by Cao Phat.
2.1.3.4. Roles of Accounting Department
This is an important department in Cao Phat. There are some specific roles
that the accounts maintain great relationships with vendors. the essential roles and
duties of virtually any accounting staff include some working as: Firstly, they have
to make money out. It means that they are in charge of making payments and
keeping the bills paid. Secondly, they have to make money in. It means that they are
in charge of processing incoming payments. Thirdly, they have to make payroll to
make sure that everyone gets paid on time. Fourthly, they have to do report. It
means that they are preparing financial reports such as profit and loss, balance
sheets and budgets. Lastly, they have to control finance.
2.1.3.5. Roles of Administration Organization
General Administration Department occupies an important in Cao Phat. The
department is incharge of providing comprehensive administrative planning,
leadership and organization, as well as development of all departments in the
company. They also evaluate performance of all department heads and their
operations. In addition, administering all laws and policies established is their
responsibilities in Cao Phat.
The corporate structure of Cao Phat is designed or adapted to facilitate the
implementation of the current strategic goals of cashew exports. However, when the
structure of too many levels of management will lead to the distance between the
decision-making place with the object of administration is extended, the speed of
decision-making is slow and can be bureaucratic. On the other hand, Cao Phat's
management hierarchy has always employed a lot of staff and this has led to high
decision-making costs and has resulted in low quality decisions due to "noise".

19
information. Modern governance models aim to reduce the number of management
levels, especially establishing direct relationships between managers and
employees.
2.1.4 Types of Cashew Nut Export to Netherlands market
With the target towards to deep processing Cao Phat Company has invested in
modern equipment to reduce costs. Along with that, the human resources and
natural resources are also factors supporting the export industry in general and Cao
Phat Company in particular, is growing stronger. The cashew nuts are produced
through the modern production line system, which is collect-handed through
experienced workers. Cao Phat always proud of their products when exported to the
Netherlands market. With the nutritional value and available usese of the cashew
nut as follows:
Cashew nuts to Netherland customers are the nuts have to go through the
harshest selection process to pick the best nutritious nuts, because Netherland
consumers are always care about the quality in the products they use.
To meet the demand, Cao Phat Company is currently exporting to the
Netherlands market with the following key products:
Cashew nut WW240 Cashew nut WW320

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 Number of seed/LB (Pound):
220-240
 Name: White cashew nut,
whole grains
 Feature: White or ivory white,
no black or brown
 Number of seed/LB(Pound):
300-320
+ Name: White cashew nut, whole
grains
 Featre: White or ivory white, no
black or brown
Cashew nut WW450 Cashew nut SW
 Number of seeds / LB (Pound):
400-450
 Name: White kernel, white
cashew nut
 Features: White, light yellow,
ivory white, or pale gray ash.
 Maximum number of seeds: 320
seeds/ LB (Pound)
 Moisture content not more than
5% by volume
 Features: Cashew nuts are
yellow, light brown, pale ivory, light
gray ash or ivory.
Cashew nut WS Cashew nut LP
The longitudinal pool as a half of
the nut was split along its length,
The large fragments do not
penetrate the 4.75mm hole, the kernel

21
making the two nuts separated and
each leaf did not break more than 1/8
of the nut and ivory white.
of the scab, wrinkled, sharpened, dark
brown or black spots, may be wrinkled,
young or brown spots or surface spots
are not too 60% affected.
2.2 The Actual Situation Exporting Cashew Nut
2.2.1 Analysis Revenue, Cost, Profit Table
this is the summary of Cao Phat business during four years from 2014 to 2017.
Table 2.1: Results of production- business of the Cao Phat in 2014-2017
Unit: Billion VND
Year Total revenues Total costs Total profits
2014 731,2 684,23 46,97
2015 901,22 835,86 65,36
2016 1304,12 1190,8 113,32
2017 1340,13 1210,3 129,83
Source: Sale Department
Table 2. 2: Total revenues 2014-2017
Year 2014 2015 2016 2017
Total revenues 731,2 901,22 1304,12 1340,13
Difference between
2014-2015
170,02
(23%)
Difference between
2015-2016
402.9
(45%)
Difference between
2016-2017
36.01
(3%)
The total revenues increase through every year from 2015 to 2017. In 2015, total
revenue increases by VND 170,02 billion, accounting for 23% while total revenue

22
increases by VND 402,9 billion, accounting for 45% in 2016. This year have a big
sales ever. Moreover, In 2017, total revenue only increases by VND 36,01 billion,
accounting for 3%. During three years, the total revenue always increase. However,
the total revenue in 2017 is not good like previous years.
Figure 2. 1: Total revenue 2014-2017
.
Table 2. 3: Total costs 2014-2017
Year 2014 2015 2016 2017
Total costs 684,23 835,86 1190,8 1210,3
Difference between
2014-2015
151,63
(22%)
Difference between
2015-2016
254.94
(42%)
Difference between
2016-2017
19.50
(5%)

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The total costs increase yearly from 2015 to 2017. In 2015, total costs increase
by VND 151,63 billion, accounting for 22% while total costs increase by VND
254,94 billion, accounting for 42% in 2016. This year, the company spend a lot
because of having a big sales ever. Moreover, In 2017, total costs only increase by
VND 19,50 billion, accounting for 5%. During three years, the total costs always
increase.
Figure 2. 2: Total costs 2014-2017
Table 2. 4: Total profits 2014-2017
Year 2014 2015 2016 2017
Total profits 46,97 65,36 113,32 129,83
Difference between
2014-2015
18,39
(39%)
Difference between
2015-2016
47.96
(73%)
Difference between
2016-2017
16.51
(34%)

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The total profits also increase yearly from 2015 to 2017. In 2015, total profits
increase by VND 18,39 billion, accounting for 39% while total profits increase by
VND 47,96 billion, accounting for 73% in 2016. This year, the company get a big
profits ever. Moreover, In 2017, total profits only increase by VND 16,51 billion,
accounting for 34%. During three years, Cao Phat always get profits. However, the
profits in 2017 is not good when comparing to previous years.
Figure 2. 3: Total profits 2014-2017
2.2.2 Analysis the Results of Export to the Netherlands Market
The Netherlands is the first sights of the company to take steps further deeper
into difficult markets in particular EU and Europe in general. Therefore, in recent
years the consumption and profit brought from Holland continued to increase,
marking the very positive achievements and opening up new opportunities. In 2010
Cao Phat's cashew nut is not yet on the Netherlands market, but then in 2011 - the
year of the beginning of the opportunities, the revenue earned from the Netherlands
market is 550,490 USD and increasing year by year (Appendix 1).
Up to now, sales volume, revenue, profits from the Nethelands market and the
rest of the world market all very good growth. Netherlands is the largest market of
companies today. Export sales in 2014 of the companies bring more than $ 21
million profit from the Netherlands. However, due to the food safety and hygiene

25
barriers and other regulations of the EU, the products exported to the Netherlands
have been carefully checked (Appendix 1).
In summary, the Netherlands is a potential market, yielding a profit every year,
always showing a positive profit margin showing that the company is doing well in
the Netherlands market
2.2.3 Analysis Result Exported by Export Structure of Netherlands Market
The provinces of South Holland, North Holland, Noord - Brabant of Netherlands
are the three main export of the company over years, increasing both in output and
sales. Over many years, by 2017, the country with the highest output is South
Holland, reaching 1,155.28 tons, up 201% against 2016 and bringing in 199.45
billion VND of revenue. The next is North Holland in 2017 reached 649.25 tons
brought about 126.30 billion VND. So far, cashew nuts of Cao Phat Co., Ltd have
been present in most of Netherlands provinces. According to the results of the
above statistics, it is seen that the Netherlands market is increasingly expanding
(Appendix 2).
Table 2. 5: Export Quantity 2014-2017
Unit: Tons
Year 2014 2015 2016 2017
Export Quantity 69.87 284.87 1,478.19 2,514.54
Difference between
2014-2015
215
(308%)
Difference between
2015-2016
1193.19
(419%)
Difference between
2016-2017
1,036.35
(87%)
Export quantity increases year by year from 2015 to 2017. In 2015, Export
quantity increases by 215 tons, accounting for 308% while export quantity in 2016
increases by 1,193.19 tons, accounting for 419%. The year 2016, Cao Phat has

26
exported much cashew to the Netherlands. Moreover, In 2017, the quantity
increases by 1,036.35 ton, accounting for 87%. During three years, Cao Phat always
export more and more cashew to the Netherlands.
Most of the orders are usually priced between $ 9,5592 and $ 8.5379 per kg. In
general, the orders are signed by the familiar partners, the price will be less change,
only if there is a deficit or surplus on the market to push price up or pull price down.
The products of company to Netherlands are high quality, so the price that the
company signed is usually high, (Appendix 3)
In 2014, the company signed contract with the highest unit price between 9.5592
- 9.0486. In 2017 at prices from 10,070 to 9,5593 USD / kg is quite high compared
with the general market that the company exported 843,368.86 tons of goods
brought to $ 8,179,763.73. Prices range from $ 9.5592 to $ 9.0486 per kg, up 51%
to 537,872.30 tonnes and 50% to $ 5,091,298.12, (Appendix 3)
In general, the price of the company is not much fluctuation, mainly in the range
from 8.5379 to 9.5592 USD / kg and stable over the years, (Appendix 3).
Table 2. 6: Export Revenue 2014-2017
Unit: USD Million
Year 2014 2015 2016 2017
Export Revenue 0.54 2.78 14.07 22.09
Difference between
2014-2015
2.24
(410%)
Difference between
2015-2016
11.28
(405%)
Difference between
2016-2017
8.03
(71%)
Source: Sales Department
Export Revenue also increases year by year from 2015 to 2017. In 2015, Export
Revenue increases by USD 2.24 million, accounting for 410% while export
Revenue in 2016 increases by USD 11.28 million, accounting for 405%. On the
other hand, In 2017, the export revenue increases by USD 8.03 million, accounting

27
for 87%. During three years, Cao Phat always export more and more cashew to the
Netherlands.
2.2.4 Analysis Result Exported by Product Categories
In all of kind cashew nuts exported to Netherlands over these years, cashew nut
WW320 always has the largest export volume. The highest is in 2017 reached 1,504
tons accounting for 60% of total output and 58% of total revenue, second place is
cashew nuts WW240 reached 513 tons accounting for 20% of total output and 22%
of total revenue. Specifically, In 2010 the cashew nut of the company has not yet
reached Netherlands market, (Appendix 4). In 2014, cashew kernel of WW320 type
reached 28,778.4 kg, reached 41% of output and 43% of revenue, reached for 12%
of output and 10% revenue. Cashew kernels WW320 is the highest yield and
turnover, second is cashew kernel WW240 and lowest cashew nut WS1. (Appendix
4).
2.2.5. Analysis Result Exported by Type of Export
Direct export achieved the highest revenue, followed by export via intermerdiary
and final is processing export. Specifically, in four years from 2014 to 2017, there
were 5,565.04 tons of cashew nuts exported by direct way while 3,966.17 tons by
export via intermerdiary and 183.17 tons by processing export, (Appendix 5).
However, for Netherlands market, the company has not yet made any orders in
the method of entrusted processing. The company is focusing on investing in direct
export.
In summary, up to now, the export business of the company quite successful. The
company has actively sought new customers, expanded business to many markets in
different continents, diversified forms of export, in which the direct export form
brings the most revenue to company. By direct export the company can be much
more active in negotiating such as negotiating on price, payment method ...
2.2.6 Payment and Commercial Terms for the Netherland Markets
The three main payment terms that Cao Phat uses for their customers in the
Netherlands are Letter of Credit (L/C), Document against Payment (D/P) and

28
money transfer (T/T). In which T/T is used most, accounting for 39%, for the
customers who have good relationship with Cao Phat. They believe together, so
they are ready to pay 100% value of invoice when buying cashew. On the other
hand, L/C is also used much, accounting for 32%, for almost the customers in the
Netherland because it is very safe payment terms for both of sellers and buyers.
Moreover, Cao Phat also uses D/P, accounting for 29%, for Netherlands cusotmers
to make sure that they can save time and money when doing business. However, it
is risky for Cao Phat with this payment term because the shipments are also on the
ways to importers’
Table 2. 7: Payment terms
Payment terms L/C D/P T/T
% 32% 29% 39%
Source: Im-export Department
To commercial terms, Cao Phat sells cashew to the Netherlands with CFR term
most, accoutning for 58%. in this way, Cao Phat take advantage of choosing the
logistics agencies to make sure that they are good logistics with competitive prices.
in addition, the company also sells products with FOB and CIF, acoounting for 21%
for both terms. With FOB, Cao Phat has no chance to choose logistics agencies
because the customers will choose for them while CIF terms gives the company
more chances to deal with shipping agencies and insurance companies.
Table 2. 8: Commercial terms
Commercial terms FOB CFR CIF
% 21% 58% 21%
Source: Im-export Department
2.3 Factors affecting export business activities of Cao Phat Co., Ltd
2.3.1 External factors
2.3.1.1 The Imports and Exports between Vietnam and the Netherland
The Netherlands is Vietnam's largest export market in the EU. Export turnover
to the Netherlands increased annually, average 18-25% per year.

29
In the year 2017, the two-way trade turnover of Vietnam-Netherlands reached
7.77 billion USD (up 16.2% compared with 2016), of which Vietnam exported to
the Netherlands 7.11 billion USD (increase 18 , 3%) mainly of computers,
telephones, textiles, footwear, cashew nuts, machinery, seafood ... (Thuy, 2018)
Vietnam's exports to the Netherlands in 2017 are the largest in terms of
computers, electronic products and components, reaching $ 2.06 billion, accounting
for 29% of total exports of goods. to the Netherlands, going up 17.6% compared
with 2016; followed by the $ 1.22 billion (accounting for 17.1%, going up 15%);
footwear reached USD 582.86 million (8.2%, going down 2%); textiles and
garments 601.51 million (accounting for 8.5%, going up 11.8%); Cashew nut
reached $ 541.81 million (representing 7.6%, going up 41.6%). In 2017, exports of
all key commodities to the Netherlands will grow compared to 2016; In addition,
there are some groups of goods but turnover is not high, but compared with 2016,
such as: Camera, video camera and components increased 123 %%, reaching $ 8.34
million; toys, sports equipment increased 82.3%, reaching $ 32.19 million; Rubber
products increased 56.3% to $ 13.99 million. (Thuy, 2018)
Imports from Vietnam account for only 1.06% of the Netherlands’ imports (€
372.6 billion) in 2016. This is important for Vietnam's exports to the EU market.
Thus, the Netherlands can be considered a potential market and a gateway for Cao
Phat.
Table 2. 9: Cashew nuts export in 2017
Unit: USD
Item December, 2017
(+/-%)
December, 2017
comparing to
November, 2017 2017
(+/-%) 2017
comparing to
2016
Cashew nuts 42,187,129 -4.83 541,811,946 41.62
Source: General Department of Customs
In 2016, the Netherlands is the second largest exporter of agricultural products
after the United States, reaching 92 billion euros, of which more than a quarter (to
25.5 billion euros) is re-exported in which the Netherlands imported more cashew

30
nuts from Vietnam in 2017 comparing to 2016, increasing by 41.62%. This is good
news for Cao Phat to choose the Netherlands as their target market.
2.3.1.2 Culture- Society
Economic conditions is still remaining difficulties but the goverment still
arranged increased resources from the State budget at the same time promote
socialization to develop culture, society and ensure social security.
Over the past year, the cultural sector has successfully organized many national
celebrations and a series of cultural events with the theme of sea islands, with many
important meanings, and many cultural activities. The ceremony was also attended
by the masses.
This year, the whole sector actively promotes the movement "All people
exercise their bodies following the example of Uncle Ho" combined with the
organization of the Congress of physical training and sports at all levels: ASIAN,
The 7th Southeast Asian Games in Myanmar, The World Heavyweight Champion
in Dubai, The Vietnamese delegation won a total of 71 gold medals, 85 silver
medals and 92 bronze medals at international competitions.
2.3.1.3 Policies
Of reviewing policy, the implementation of incentives for frequent on 1.5
million and the completion of the new construction, repair of about 48 thousand
homes for the people, including 13,500 homes from social sources.
In 2017, 1.18 million new jobs were created, 83,000 people went to work
abroad, up 32.6% over the previous year. Labor conditions and labor relations have
improved. The number of people participating in social insurance increased.
Implement good unemployment insurance policy.
Implement the “Sustainable poverty reduction” program, focus on supporting
poor households to develop production, access basic social services and invest in
infrastructure development in special difficult areas. Flood prevention policies,
housing for the poor, low income people are concerned. Effectively implement
preferential credit policies for poor students. The rate of poor households in 2017

31
will decrease by 1.8 - 2%, especially the poor districts will decrease by 4%. Over
2.6 million people receive regular social allowances. Poor children, ethnic minority
children and disadvantaged areas are supported with expenses for study and living.
Promptly implement emergency relief activities and overcome the consequences of
natural disasters.
The protection and care of people's health has been strengthened. The quality of
medical examination and treatment is improved. To continue investing in building
and upgrading many hospitals. Overcrowding in many hospitals is improving. To
actively reform administrative procedures, reduce waiting time for medical
examination and treatment; More timely response of the patient through the hotline.
To attach importance to the work of preventive medicine, epidemic prevention.
Development of marine health island. Promote non-public health development.
Strengthen price management, quality of medicines and inspect health facilities.
The rate of participation in health insurance is about 72%. Implement financial
autonomy for public health service units. To step by step adjust the prices of
medical services according to the target.
2.3.1.4 Technologies
The Goverment will support enterprises to implement the tasks of scientific
research, the program of scientific and technological innovation. Improve
operational efficiency of the fund for science and technology. Accelerate the
construction of high-tech zone. Enhance protection of intellectual property rights
and the development of science and technology market. Support enterprises
involved in research, transfer, technological innovation, promote the
commercialization of research results. Encouraging enterprise search, technology
transfer resources, advanced technologies from abroad. Creating favorable
conditions for the pilot building organizational models advanced science and
technology.
2.3.1.5 Natural Factors
Our country has many favorable natural conditions for economic development:

32
-Geographic location: the intersection of international transport route, from
North to South, from East to West. Is the bridge between the Indian and Pacific
oceans, continental Europe, Asia and Autraulia, advantages for the development of
the relationship, the international trade.
-Thick rivers system fixtures: Mekong River, the Red River ... created the fertile
Delta region of fertile, big water flow, high silt content ... These are favorable
conditions for the resident populations, agricultural development, convergence of
residents from ancient times.
-Monsoon climate: hot, humid climate, much rain makes the flora and fauna in
our country is very rich and diverse. High temperature, moisture conditions for
year-round green vegetation, agricultural development.
-Sea: is important roads, the supply of marine resources such as seafood,
minerals as a condition to develop the marine industry such as oil, fishing,
aquaculture, marine tourism and marine transportation.
-Natural resources: Biology is relatively abundant, is home to many rare plant
and animal types. In addition, rich mineral resources are also the source of supply of
raw material, fuel for the industry.
2.3.1.6 Others (Suppliers, Competitors, Alternative Products, Customers)
a. Suppliers
The land area of cashew growing in Vietnam is shrinking due to the people
cutting off the cashew to grow higher economic value crops such as rubber, pepper,
cocoa ... The weather changes oftenly affects the quantity and quality of the crop,
resulting the imbalance between supply and demand in the country, which can not
meet the demand for cashew nut processing plants in the country.
To ensure sufficient material for production, Cao Phat Company Limited has
imported raw materials from abroad. Since 2010, the company imported more than
60% of raw materials, mainly from Africa, Cambodia, Indonesia and some other
countries. Especially now the company is directly supplying raw materials from
Africa such as Ghana, Benin, ...

33
Table 2. 10: Suppliers
Supliers Vietnam’s Africa’s Cambodia’s Indonesia’s Others’
% 39 29 15 9 8
Source: Planning Department
Figure 2. 4: Supliers provide raw cashew nut of Cao Phat Company 2017
b. Indonesia- Competitors
Competition has the effect of promoting the rise of enterprises but on the other
hand it also drowned the weak enterprises. The level of competition here is reflected
in the number of exporters in the same industry or other substitutes. At present, the
government of Vietnam has the policy of encouraging all new businesses to export
has led to the explosion of the number of export enterprises therefore sometimes
there is unfair competition.
In a market economy, competition is indispensable. Particularly, the cashew nuts
export industry has a long history, the ability to enter the industry is intense so
competition is inevitable. Currently in the world market, the company is also facing
many enterprises with high competitiveness such as: Tan Mondial Pte Ltd, Gelfruit
Italia Srl, Udensi Global Trading Companies Ltd, OLAM Vietnam Co., Ltd.

34
In the international market for many years, China has emerged as a formidable
competitor thanks to the strong work force and the ability to host raw materials.
Apart from China, there are also strong competitors like India, Brazil and Africa, …
- Alternative products:
Currently, Cao Phat Company is supplying cashew nut products to many
different markets. However, with the nutritious ingredients in the kernel as well as
the cost of products, nuts such as peanuts, almonds, walnuts, etc. These nuts can
also be used for snacks or add to the dish to enhance the flavor. In addition to the
benefits of making good food, there are also many health benefits and have been
scientifically proven. Therefore, these nuts can become substitutes for cashew nuts
offered by the company.
- Customers:
The customer is the object that the company should serve and the factors that
determine the success or failure of the company. Cao Phat Co., Ltd is in the form of
business both export production and domestic sales, so right from the beginning of
the company has formed a customer-friendly system. Cao Phat has made a good and
impressive image for consumers, partners, distributors and suppliers, thanks to good
quality products from Cao Phat Company. Modern machines to ensure the products
are created with the best quality at the lowest cost to customers.
The company's products have crossed the fence control of critical food safety the
importers from different continents of the world, especially Europe. So far, the
company's products have approuched customers in many places in the world such as
USA, Australia, Holland, China, EU market, ...
Figure 2. 5: Export customers of Cao Phat in 2017

35
List of foreign clients are Trade Development International BV, CATZ
International BV, Jas Trading BV, Intersnack Nederland B.V., International Food
Partners B.V., Tricon Commodities, C.G Hacking & Sons Ltd., Barrow Lane and
Ballard Ltd., Sunrise Commodities INC, The Richard Franco Agency, Inc, Kraft
Foods,…. (Appendix 5)
2.3.2 Internal factors
2.3.2.1 Human resource
a. Age structure
Cao Phat always focused on additional high-quality human resources for the
growing apparatus personnel, timely meet the demands of the competitive process
and development as today. Cao Phat realized that people are valuable assets of the
company and to promote the effectiveness of this valuable assets, Cao Phat plans to
incorporate training, human resource development, workers to save time for the
operation, the ability to stand machine, sense of energy and raw materials, improve
workmanship, ...
Table 2. 11: Human resource structure by age
Age Number (person) Percentage (%)
20 - 30 782 56%
31 - 40 367 26%

36
41 - 50 198 14%
51 - 60 39 3%
Total 1,386 100%
Soucre: Human Mangagement Department
Figure 2. 6: Structure by age of employees in 2017
According to the data, we see: The labor force of the company has a relatively
young age. Mostly aged 20-40, accounting for 56% of the company's total human
resources. Because of the characteristics of the company is both production and
business, the main force of the company is at this age is very suitable, because this
age is dynamic, creative and sensitive in the work. It is a favorable condition for the
company to grow.
In addition to the age group of 41 to 50, the age group can be said to be
experienced in both production and business, which is a necessary age to support
and supplement the 20-40 age group. Age is also a small percentage of 3%, this is
the long-term commitment to the company has long understood and experienced in
the company's production
b. Academic Level

37
The number of employees with upper university, university, college, technical
professional level rose rapidly over the years. A review on the university and
college level by the end of 2017 has 215 employees accounted for 15.5% mainly
holding senior positions to grassroots leaders. According to the level of technical
profestional and unskill labors always occupy more than 50% of employees in the
company, it is the direct labour force production of cashew nuts.
Table 2.12: Academic level and sex of Cao Phat employee in 2015-2017
Sort by
2014 2015 2016 2017
Numb
er
%
Numb
er
%
Numb
er
%
Numb
er
%
Academic
level
Upper university 3
0.36
%
3
0,3
%
3
0,3
%
3
0,2
%
University 130
15.74
%
136
14,8
%
165
13,9
%
212
15,3
%
College 250
30.27
%
269
29,3
%
310
26,1
%
314
22,7
%
Technical
professional
133
16.10
%
157
17,1
%
287
24,1
%
382
27,6
%
Unskill Labor 310
37.53
%
352
38,4
%
425
35,7
%
475
34,3
%
Sex
Male 482
58.35
%
584
63,7
%
596
50,1
%
741
53,5
%
Female 344
41.65
%
333
36,3
%
606
50,9
%
802
57,9
%
c. Positions
The positions meet academic level because people in board of directors have Upper
university degrees, university degrees and Technical professional skills. Moreover,
the managers who are the key employees who have university degrees, however
there are two people having college degrees because they have experience when
having been working for Cao Phat for a long time. In additon, the staffs also have
bachalors and college degrees to meet their work well while securities and loborers
who have no high degrees also have cahnce to work in Cao Phat because their
works are rather simple.
Table 2. 13: Positions
Academic Board of Managers staffs securities laborers

38
level directors
Upper university 3
University 5 16 115
College 2 267
Technical
professional
3 4 150
Unskill Labor 352 21 331
2.3.2.2 Finance
Enterprises processing agricultural products in general and processing cashew
nuts in particularly have a huge dificulty in accessing of loans from banks,
especially foreign exchange. In recent years the bank tightened limits borrowing
and lending interest rates in VND is high and loan terms are also heavily dependent.
That has led some businesses to buy dollars on the free market and take risks due to
exchange rate differences.
Recognizing the importance of capital support from banks Cao Phat Co., Ltd.
has based on its reputation as well as its internal strength to build good relationships
with banks. At present, the company is supported by three major banks, Saigon
Bank (SHB), Military Bank (MBBank) and Saigon Thuong Tin Commercial Joint
Stock Bank (Sacombank) check document, …(Appendix 6)
2.3.2.3 Company Culture
Cao Phat Company builds a good corporate culture that clearly defines
regulations and rules the working hours for employees as well as staffs. In the
process of work always create a cheerful atmosphere, help reduce stress, reduce the
gap between upper and lower levels, between the leadership and staff. In Cao Phat,
management does not mean putting employees into a rigidly permissive framework.
Sometimes employees can come late without penalty, but above all those employees
must complete their work and reach the goal of the month.
The company always made their employees feel like the company is the second
home of the staff when they come to work to help employees feel comfortable,

39
emotional spirit in a working day. Employees and leaders of the company often eat
lunch together, the distance between the boss and the employee is shorter,
In addition, there are compulsory regulations such as no smoking at work, no
using alcoholic beverages in the company, absolute lack of arrogance, bullying,
causing troubles in communication. For the boss, subordinate, colleagues or
customers always politely, courteously behave.
At Cao Phat Company, the Board is often called "Gia Phat Cao Phat". The
distance between the boss and staff is shortened. Because everyone is used to be
with a sincere, straightforward, well-informed, and receptive leader. If employees
have questions that can not be unscrewed, then when the leader will explain clearly,
friendly to develop together for a common purpose. This has created a beautiful
image in the customer's mind and business environment of " Cao Phat Family".
2.3.2.4 Material Facilities
The company has continuously upgraded, modernized production technology to
the most modern export kernel is guaranteed in both quantity and quality.
Production parts such as raw cashew, dried, peeled silk, final products are equipped
with modern production equipment and synchronous.
In 2007, from the early days of establishment, the company has successfully
applied the cashsew nut steamer machine, which helps to reduce environmental
pollution, low human use, and high productivity.
In 2008, the company has invested in automatic peeling machine, improving the
separation machine to increase productivity, reduce costs, protect the environment,
food hygiene and safety also in this year the company equipped with metal
detectors, sorting machines, coloring machines and modern machines according to
international standards.

40
Table 2.14: Machinery and equipment of Cao Phat in 2017
No. Equipments Quantity Unit Specifications
1
Sorting cashew
machine
5 PCS
Capacity: 1200 - 1800 kg / hour
Pore size: 14 - 23.5 mm
Power Consumption: 3KWh - 380V / 50Hz
2 Autoclaves 3 PCS
Capacity: 800 - 1200 kg / 15 minutes
Full crack rate: 98 - 100%
Power Consumption: 3KWh - 380V / 50Hz
3 Steamer 3 PCS
Capacity: 800 - 1200 kg / hour
Power consumption: 5KWh - 380V / 50Hz
4
Drying cashew
machine
6 PCS
Capacity: 1200 - 1800 kg
5
Automatic shell
cutting machine
5 PCS
Capacity: 1000 - 1200 kg grain / hour
Full coverage rate: 80 - 90%
Rate of tank: 2 - 8%
6
Manual cutting
equipment
250 PCS Power Consumption: 3KWh - 380V / 50Hz
7
Silk shredder
10 PCS
Capacity: 350 - 500 kg per hour
Clean rate: 75 - 90%
Rate of tank: 4 - 12%
8
Agro-coloring
machine
1 PCS Power consumption: 5KWh - 380V / 50Hz
9
Metal detector
1 PCS
Capacity 5kg - 100kg
Power consumption: 5KWh - 220V
10
Packing
machine
1 PCS
Capacity: 120 - 180 bp
11 Compressor 3 PCS Power Consumption: 3KWh - 380V / 50Hz
12
Weighing
station
1 PCS Weight can weigh 80 tons
13
High voltage
power station 1 PCS
Capacity: 8000 - 5600 KVA
Voltage Rating: 35Kv / 10Kv, 6Kv, 0.4Kv-50Hz
14
Generator
1 PCS
Continuous output: 562 KVA
Backup capacity: 625 KVA
Fuel Consumption: 91 liters / hour
Voltage (V) / Frequency (Hz): 220V / 380V / 50Hz
15
Forklift
1 PCS
Weight can be lifted: 3000 tons
Height can be lifted: 3m
Source: Technology Department

41
2.4 Evaluation
2.4.1 Achievements
From the early days of entering Netherlands market until now, the company has
overcome many barriers, including the most important and difficult issue of food
hygiene and safety standard- HACCP.
The material and technical infrastructure for production and business has been
greatly improved. Technical skills of workers are also improveving. The quality of
cashew nut is also more secure, less waste, creating more prestige of quality for
foreign customers in accordance with the development orientation of the company
moved to 95% export.
2.4.2 Limitation
The problem of supply of raw materials is always the concern of many
businesses. As the weather conditions are unpredictable and the complex evolution
has affected the cashew crop as the supply of raw materials is often instability, the
company also can not reserve too many raw materials.
The most modern equipment and fully automatic labour saving operation is what
enterprises are fighting for their factory. However, due to limited financial
condition, the company has invested but not enough to expanding.
The company has not organized professional marketing to research and
marketing cashew nuts to new markets, so it is quite difficult to find new partners.
Funding for marketing, advertising, product introduction, market research, brand
promotion is quite limited.
Brand building, development and promotion is a strategy that needs long-term
investment, but the company has no specific plans. The company don’t participate
in fairs to actively seek customers and understand their needs, as well as have
conditions to know their competitors, the opportunity to raise their brand and
expand the market.

42
In summary, the export of cashew nuts of the company is affected by the world
market, price and different types of export at different times require the company to
be flexible in market research and product quality.

43
CHAPTER 3: POTENTIAL DEVELOPMENT, THE ORIENTATION TO
DEVELOP EXPORTING CASHEW NUT TO NERTHERLANDS AND
RECOMMENDATIONS WITH CAO PHAT CO., LTD

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