PREFACE Vietnam tea exports in recent years has made good development, earning $ 200 million in 2010, although in the context of business operations facing many difficulties, still the tea industry exported 130,000 tons of tea by the official way in 2011, earning 204 million USD In 2012 there were praiseworthy achievements of Vietnam tea export industry: the total exports of tea of Vietnam reached 146.7 thousand tonnes, earning $ 224.6 million, increased by 9.6% and 10.1 % of turnover compared with 2011 However, the export price of Vietnam tea is still very low, only 50-60% of the general price level in the world That is the problem that the tea industry needs to pay special attention.One of the reasons that caused the export price of Vietnam tea low is most of the tea product lack credibility in quality, especially in the areas of food safety and hygiene The fact that Vietnam tea industry is facing significant challenges such as low competitiveness, specificly product quality are not homogeneous, low added value, the distributing system is not complete , the brand is still faint, Therefore the analysis, assessment and putting forward solutions to improve the competitiveness of Vietnam tea products is a matter of necessity Stemming from the above reality, this thesis studies on “Potential of Vietnam tea in the internation market” to help Vietnam tea exporting enterprises develop comparative advantages, overcome disadvantages, in order to improve the efficiency of tea exports Structure of the thesis consists of chapters Chapter I INTRODUCTION 1.1 Background of the research Vietnam tea industry now primarily focuses on exports, with 80% of the tea sold on the world market As Vietnam tea industry mainly focuses on the world market and due to over-reliance on a few major export markets Vietnam tea industry stands a chance of meeting market risks So in the near future, the market diversification is urgently required for Vietnam tea industry According to many experts, Vietnam tea industry is facing the risk of losing export markets and low export efficiency Tea industry targets by 2015, the total volume of the country's tea exports will reach 200,000 tons of tea with high quality, high value and food safety, with a turnover of $ 440 million USD, creating jobs for about million people, the average revenue is 35 million dong / Thus, to achieve the above objectives, it requires the evaluation of Vietnam tea export industry, analyses of the influencing factors Thereby building possible strategy to help improve the efficiency of Vietnam tea export products 1.2 The purpose of the study To improve the efficiency of Vietnam tea export industry - To build the factors affecting the export competitiveness of Vietnam tea industry - To identify issues need addressing during the developing period of Vietnam tea export - To explain the causes and offer solutions to improve the efficiency of tea exports 1.3 The significance of the study This study helps businesses growing, producing, processing and trading tea improve product quality, and promote the image of Vietnam tea brand on the world market then enhance the competitiveness and create firm room stand for Vietnam tea products on the world market The results of the study have a positive impact on the process of forming orientedly developing policies, strategies to for Vietnam tea industry to increase export turnover, production and business growth and profitability for tea growers 1.4 Subjects and scope of research 1.4.1 Subjects of study Subjects of this dissertation is a theoretical basis and practical competitiveness of Vietnam tea exporters 1.4.2 Scope of Research The scope of this dissertation is to focus on analyzing the factors affecting the export competitiveness of Vietnam tea industry Scale: mainly research on Vietnam tea exporting enterprices into the importing countries having the medium importing scale of 250 tons of tea / year Time: time for surveying and collecting data is updated to 2012 Chapter II Review of the literature and related research works The research topics on tea plants mainly research on the field of engineering, such as breeding, propagation, irrigation, processing equipment, fertilizer, food safety, plant nutrition; processing technology, production organization and management in safe and highly-qualified tea production However, with the growing demand of the tea industry, some researchers explored other areas to include economic themes Scientific research project: "Orientation - solutions to develop tea production in 2010" of Dr.Nguyen Kim Phong - General Director of the Vietnam Tea Corporation, Ministry of Agriculture and Rural Development In his study the authors made recommendations to the Government on the organization, management and policies to encourage the production of tea in our country However, research studied the macro issues, the authors have not mentioned deeply solutions to develop the tea industry in our country in the current period Scientific themes of the "Producing and exporting tea - Situations and Solutions" of Dr Nguyen Sinh Cuc The author put forward synchronizedly conducting to promote producing and exporting tea The work was completed in 2001 Since then, along with the trend of international and regional economic integration, the national economy including manufacturing force and economic institutions have considerably changed Therefore, such solutions given by the authors are no longer appropriate "Current situation and solutions to develop tea industry", summary record of a conference held by the Vietnam Tea Association on 09/07/2005 In this conference many shortcomings of the tea industry have been discussed thoroughly However, specific solutions to address the development of the tea industry how much were not mentioned much In Thesis Master in Political Economy "Vietnam tea industry development in the process of international economic integration, author " Nguyen Thi Thu Nga analyzed, assessed the operational status of Vietnem tea industry in recent years, then propose solutions to better develop the tea industry in the process of international economic integration But the the author focus only on researching the situation and solutions to develop Vietnam tea industry in general Tran Cong Thang (2004), head of the project "Participation of the poor in the agricultural value chain: Study for the tea sector." This project focuses on analyzing activities of the tea value chain and interests of the poor when they participate in the value chain and strengthen their capacity to support the market development for the poor through research and development of trade networks and trade promotion policies PhD Nguyen Thi Nhieu (2006), head of the project "Market-Marketing research in Vietnam's tea export." The project focuses on analyzing characteristics and development trends of the world tea market, and marketing elements in tea export; researching marketing experience for tea export of some countries; and proposing marketing solutions of Vietnam's tea export by 2015 It can be said that the projects above research the tea sector either from the view of export competition or the view of each production facility, but there are no projects systematically doing research on potential of Vietnam tea in the internation market The thesis is expected to systematize the theoretical framework of planning the world market entry strategy for a sector The thesis will generally outline the world tea market and Vietnam’s tea production and export situation On the background of this picture, it shows the basics on the world market penetration of Vietnam tea during the last time; identifies strengths, weaknesses, opportunities and threats for Vietnam's export tea; determines potential of Vietnam tea in the internation market 3.1 Methods of data collection, processing and analysis 3.1.1 Subjects of survey · Tea exporting countries (including Vietnam) have export scale of 250 tons or more Tea importing countries have import scale of 250 tons /year or more · The leading experts and leaders of big enterprises to identify the weight of components of the competitiveness of Vietnam's tea export · Vietnam’s tea-exporting enterprises: However, because of limited time and funding, this research only focuses on surveying in 20 Vietnam tea exporting enterprises, including 15 enterprises with the largest export output in 2010 and enterprises with medium scale of export 3.1.2 Sources of data 3.1.2.1 Sources of secondary data of the research are collected from web sites and publications: · Results of research works by scholars at home and abroad; · Workshop documents and reports of Vietnam Tea Association; · Statistics of the General Statistics Office, General Department of Vietnam Customs; · Statistics of World Development Indicators, FAO, CIA, United Nations Commodity Trade Statistics Database, Economic Freedom Dataset List of these documents are presented in the references 3.1.2.2 Source of primary data Information is required to be collected: Determine the weight of the components of competitiveness of Vietnam's tea export Analyze and evaluate the world market entry of export enterprises Determine the competitiveness of Vietnam tea-exporting enterprises Subjects of Investigation Leaders of Tea Association and tea experts; Vietnam's tea exporting enterprises with the biggest export output in 2010 and some enterprises with medium-scale of export Method of investigation: Interview is made by questionnaires 3.1.3 Methods of data collection, processing and analysis Starting from the objectives and contents of the research identified, the thesis has taken steps of collection, processing and analysis as following: Step 1: Based on the objectives and subjects of survey stated above, the secondary data are collected Step 2: Descriptive statistical indicators such as average, max and value, variable range are used in combination with the results of the research works of domestic and foreign scholars in the past to analyze and assess the status of supply and demand, import and export of tea in the world market; research the experience lessons of successful tea-exporting countries in the world; analyze and assess the status of Vietnam’s tea export Step 3: Analyze the characteristics and competitive advantages of tea-exporting countries in the world and group tea-exporting countries Step 4: Analyze the factors affecting the import scale and price of tea-importing countries and to segment the world market for tea products Step 5: Conducting survey and collection of primary data and using the matrix method for evaluation of internal elements of Thompson - Strikland are to analyze the competitiveness of Vietnam tea-exporting enterprises Step 6: Investigation and collection of primary data in combination with the source of secondary information is conducted to analyze and evaluate the world market entry strategy of Vietnam tea in recent years and assess the strengths, weaknesses, opportunities and threats for Vietnam’s export tea sector Step 7: based on the results from the above analysis, propose the appropriate competitive strategy for Vietnam tea industry and offer solutions to enhance the efficiency of the tea export industry 3.1.4 Way to use the measuring scale There are levels: - Very Important - Important - Normal - Unimportant - Very unimportant Chapter IV PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 4.1 Research on the production, export and import situation of tea in the world So far, the tea is produced in 39 countries in all continents: Table 4-1: Tea cultivation areas of each continent during 2000-2009 (1000 ha) Continents 2000 2001 2002 2003 2004 2005 2006 2007 2008 Africa 224 228 243 241 245 255 256 262 270 276 Americas 47 45 45 44 43 43 45 44 47 46 Asia 2105 2133 2183 2216 2314 2408 2444 2607 2600 2665 Europea 2 2 1 1 1 Australia 7 7 7 7 2384 2415 2479 2507 2611 2714 2753 2921 2925 The World 2009 2996 Source: FAO (2011a) Tea exporting countries are divided into different groups by the criteria on scale in export volume and tea export prices of each country and different types of tea.Next tea exporting countries are grouped according to criterion on whether they grow tea or not.Such grouping is to identify specific differences in competitive advantage between groups of countries exporting tea Table 4-3: List of countries exporting tea according to groups Australia Denmark Argentina Azerbaijan Chile Hungary Sri Lanka Kenya Austria France Bangladesh Brazil Czech Republic Italy China Belgium Japan Ecuador El Salvador Israel Côte d'Ivoire India Canada Sweden Ethiopia Georgia Korea Kazakhstan Germany Switzerland Iran Guatemala Malaysia Kyrgyzstan Hong Kong Madagascar Jordan Oman Lithuania Ireland Malawi Mexico Poland Russia Macau Morocco Viet Nam Romania Saudi Arabia Holland Mozambique Thailand Singapore Niger Turkey Spain UAE Pakistan Uganda England Rwanda Zambia America Zimbabwe Yemen Syria Egypt Tanzania Burundi Source: author's Calculations South Africa Kuwait Tea is a popular drink, consumed in almost every countries around the world The importation and consumption of tea is largely dependent on consumption habits After conducting cluster analysis, the countries importing tea are divided into market segment, each segment has the characteristics of the economic and social environment, different levels of competition Table 4-6: Results of the world market segmentation Estonia Belarus Georgia Cyprus Belgium Canada Austria Danish Taiwan Holland Hong Kong Ireland Finland France Singapore Australia Mexico Korea Na Uy Latvia Greece Iran Kuwait Portugal Lithuania Spain Sweden Switzerland Italy Namibia Guatemala Oman Kazakhstan Azerbaijan Iraq Egypt Macedonia Qatar Sri Lanka Turkey Source: Author’s calculations Ghana Fiji Jordan Argentina Algeria Bahamas Guinea Indonesia Lebanon Brazil Chile Hungary India Bahrain Guyana Bolivia Ba Lan Czech Republic Afghanistan Saudi Arabia Armenia Campuchia Costa Rica Israel Honduras Kyrgyzstan Macao Kenya Malaysia Maldives Morocco Nam Phi Malta Malawi Syria Moldova Mozambique Thailand New Zealand Nigeria Trinidad and Tobago Panama Philippines Tunisia Peru Sudan Uruguay Romania Tajikistan Slovakia Yemen Ukraine Zambia Niger Gambia Senegal Mauritania Japan Mali Côte d'Ivoire Mongolia Turkmenistan Uzbekistan England Germany America Russia Pakistan China UAE 4.2 The situation of Vietnam's tea production According to the Vietnam Tea Corporation, so far there are 35 tea-growing provinces with an area of 136 thousand hectares However it is concentrated in 10 localities mainly in mountainous region, northern midland, province of Nghe An and Lam Dong The number of enterprises producing tea with industrial scale is about 700 enterprises There are 230 businesses directly exporting tea to foreign countries and to more than 100 countries in the world The number of workers in the tea industry is 1.5 million people 4.3 The situation of Vietnam's tea export The export volume of Vietnam tea in the period of 1996 - 2010 the growing rate is quite high, about 14.1% / year The volume of tea exports 2010 was times higher than in 1996, from 20.8 thousand tons in 1996 to 132 thousand tons in 2010 Table 4-8: Structure of types of tea exports in Vietnam (2008-2011) Year 2008 2009 2010 2011 Green tea under Tea on the Green Black tea under Black tea on 3kg 3kg 3kg 3kg Quantity Density Quantity Density Quantity Density Quantity Density (tons) (%) (tons) (%) (tons) (%) (tons) (%) 4,366 4.1 31,770 30.1 4,715 4.5 64,559 61.2 3,874 3.3 40,735 35.2 6,097 5.3 65,020 56.2 4,812 4.6 33,490 32.0 5,352 5.1 61,075 58.3 2,750 2.0 38,613 28.7 5,651 4.2 87,518 65.1 Source: United Nations Commodity Trade Statistics Database In 2011, Vietnam exported tea to 107 countries and territories Although exported to so many countries and regions , the export market of Vietnam tea mainly focuses on a number of countries such as Pakistan, Russia, Taiwan, India, China, the U.S., Iraq (see Table 4-10) Table 4-10: The major tea exporting markets of Vietnam (million USD) National Pakistan Russia Taiwan India China The U.S Indonesia Iraq UAE Germany 2008 2009 2010 Turnover Density Turnover Density Turnover Density (%) (%) (%) 29.5 26.7 31.8 23.8 38.2 25.9 10.2 9.3 11.9 8.9 16.4 11.1 19.1 17.3 19.7 14.8 21.5 14.6 8.2 7.4 1.5 1.1 3.4 2.3 7.6 6.9 17.5 13.1 6.7 4.6 1.6 1.4 2.5 1.8 3.1 2.1 1.7 1.5 3.9 2.9 3.3 2.3 4.5 4.1 0.2 0.1 0.9 0.6 1.4 1.3 4.5 3.3 7.8 5.3 4.0 3.6 3.2 2.4 5.3 3.6 Source: United Nations Commodity Trade Statistics Database 2011 Turnover Density (%) 46.0 25.5 27.4 15.2 24.5 13.6 9.6 5.3 7.2 4.0 5.8 3.2 5.7 3.2 5.6 3.1 3.6 2.0 3.5 2.0 4.4 The penetration situation into the world market of Vietnam tea The development orientation of Vietnam tea industry in the near future is to improve quality, food safety and high added value, and combine development of modern processing with investment of traditional technology; produce specialty teas, special tea with high quality suitable for sacle of each material region, each locality Specifically, in the near future, the tea industry targets to develop tea cultivated area of 130 thousand hectares in 2010 to 135 thousand in 2015 and 2020 is 150 thousand Tea industry will not expand much areas but focus on keeping steady tea cultivated area, improving productivity, quality, and improve tea export prices equal to the average price of the world About the market will strive to export about 70% of the total tea production and domestic consumption is 30% Exports consists of 47% black tea, 20% new tea products of high value and 30% high quality green tea Turnover will reach $ 300 million and $ 440 million in 2015 and 2020 Production will reach 200 thousand tons and 250 thousand tons in 2015 and 2020 4.5 Assessment of the competitiveness of Vietnam tea exporting enterprises Integrated calculations from the survey results, the matrix reflects the competitiveness of Vietnam tea exporting enterprises was built as follows: Table 4-17: Matrix of competitiveness of Vietnam tea exporting enterprises Competitive capacity factors Price competitiveness Management capacity Production technology capacity Human resources Organization capacity for export Capacity of business relationship development Research and development capacity Marketing capability Financial capability 10 Capacity of commercial dispute resolution 11 Brand competitiveness Total Source: survey of author 3.78 2.93 2.89 2.84 2.71 2.67 Weights Competitive capacity 0.077 0.079 0.080 0.073 0.069 0.072 Score Competitive capacity factor 0.2926 0.2323 0.2309 0.2074 0.1878 0.1917 2.64 2.42 2.36 2.27 0.109 0.123 0.111 0.074 0.2867 0.2976 0.2622 0.1686 2.21 0.132 1.000 0.2925 2.6503 Score According to the convention ranking the average competitiveness, the survey results calculated the absolute competitiveness of Vietnam tea exporting enterprises is T = 2.6503 [...]... efficiency In the value chain of the tea industry exports, the unit leader of the chain should be the major tea exporting companies and these major tea exporting companies such as Russia, Pakistan should set up some branches in the large tea import market of Vietnam The branches established in foreign markets are the bridge to collect market information, a tea- importing and supplying to overseas markets... Attach importance to the copyright registration in the domestic and foreign markets in order to avoid being in the dispute over the ownership of the brand 5.5.1.6 Solutions to build linkages between agents in the value chain of the tea industry Linkages should be developed between agents in the value chain of the tea industry is farmers - scientists - entrepreneurs in the value chain to ensure adequate,... expansion of existing ones, need to apply advanced techniques in harvesting, processing, preservation, processing according to international standards in the direction of - Upgrading the existing processing factories, expanding scale commensurate with processing needs - Constructing some processing factories located in the planned area of materials Installing the line of advanced, modern technology Ensuring... boost production in an industrialized and mordernized manner, thereby improve the efficiency of tea production 5.3 Choosing strategies for Vietnam tea export To survive in the competitive environment which is increasingly fierce, Vietnam tea industry must determine the competitive advantage of the industry to be able to compete and sustainable gain a foothold in the world tea market According to Michael... prices for these products 5.4.3 Distributing strategy for Vietnam tea products For distributing channels for tea ingredients, need to strengthen the links and cooperation between enterprises in the tea industry on a voluntary basis and to ensure the interests of all parties involved In the value chain of the tea industry need to perform deep specialization and cooperation to ensure increase in productivity,... exports and domestic tea at all critical stages of the farming system (planting, tending, harvesting, storage raw materials) in the processing factory (lines, equipment, process technology, industrial hygiene), and export - Invest in the construction of quality control system, particularly chemical residues in tea products in the region, on a scale of the country, in the form of fixed and mobile stations,... fit the needs of each market (color, taste, smell ) - Focus on designing models, packaging types of tea that is consistent with the requirements of each market 5.5.1.5 Solution for branding for Vietnam tea products To have database to build brands, the tea industry as well as Vietnam tea exporting enterprises need to conduct researching on customers to understand their feelings for tea products, the. .. improve the competitiveness of the tea products, need to apply advanced techniques in harvesting, processing, preservation according to international standards Perform the planting process, clean processing follow the standards such as Global Gap, VietGap… 5.5.1.2 Processing solutions To improve the competitiveness of Vietnam tea products on the world market, in addition to the construction of new factories... recruit accordingly 5.5.2.2 Financial Solutions Making use of the advantages of land and the hills ecosystem, improving operational efficiency in the businesses, improving quality, thereby increasing profits and add to the capital investment from the profits Calling foreign investments, joint ventures, by which, put varietis, new technique, modern equipments , advanced management skills into production... products of Vietnam 5.4.1 Strategy for Vietnam tea products On the product strategy for the export products of Vietnam tea, the most important thing right now is the tea industry must improve the quality of the tea, which can classify the raw product by different levels, different tea varieties to provide for the proper market segment requirements For deep-processing products, high added value, in addition