bhs bien hoa sugar joint stock company công ty cổ phần đường biên hòa

Bien Hoa operates a cane sugar mill and produces raw sugar, refined sugar, liqueurs and wine, ramen noodles and microorganism fertilizer.Next section on situation analysis.. In September

Đào Huyền Trang

Table of contents

2Company description, mission, focus, structure 3

c Competitive analysis 11

d Overall marketing strategy (the sales plan) 18

i Product strategy and descriptionii Pricing strategy

iii Promotion strategyiv Place/ distribution strategy

1.Executive summary

This report contains three main parts

The beginning is description, mission, focus, structure about Bien Hoa sugarcompany The company was founded in 1969 and received its current name in 1994 Bien Hoa operates a cane sugar mill and produces raw sugar, refined sugar, liqueurs and wine, ramen noodles and microorganism fertilizer.

Next section on situation analysis This section includes SWOT analysis of both the company and the company's products, analysis of competition and analysis of the company's customers

The third part is an analysis of the company's marketing It includes the market and its target audience, the company's competitive advantages over its competitors, and its marketing goals And finally the overall marketing strategy, also known as the sales plan It includes strategies that describe 4Ps: product, price, promotion and place

2.Company description, mission, focus, structure

- Bien Hoa Sugar Joint Stock Company (VN:BHS) is a sugar companylocated in Biên Hòa of Đồng Nai Province in Vietnam The company was founded in 1969 and received its current name in 1994 The company was equitized in 2001 as a joint stock company Bien Hoa operates a cane sugar mill and produces raw sugar refined sugar, , liqueurs and wine, ramen noodles and microorganism fertilizer Over the past 23 years of

establishment and development, the Company has made endless efforts on the way towards the goal of "Sustainable development with Vietnamese sugarcane" Although the Sugar industry had to go through great cyclical ups and downs, TTC Sugar still fulfilled the mission of a leading company, step by step making a big transformation on the way to conquer the regional market In September 2017, the company officially completed the largest M&A deal in the history of Vietnam's Sugar industry between Thanh Thanh Cong Tay Ninh Sugar Joint Stock Company and Bien Hoa Sugar Joint StockCompany, becoming the industry leader in all aspects With the advantage oftechnology, production capacity and quality human resources of TTC Sugar;resonating with the long-standing brand, distribution system, customer portfolio as well as the value chain of the Sugar industry that TTC Sugar owns, can be said to create a perfect combination Making good use of the

resonance power and promoting economies of scale from the mergers has helped TTC Sugar to expand and scale up production output, increasing the efficiency of the operations factory; thereby optimizing production costs, boosting sales volume and expanding market share, covering more small and medium segments in potential market niches and target markets such as the South West and the North and especially boosting exports The company currently owns 6 potential export markets, of which TTC Sugar is the only Sugar Company in Vietnam to export sugar to the US so far.- Mission: “To provide fresh agricultural products and to build a sustainable production and consumption”.

- Focus: Focusing resources on the main field of activity is sugar production and trading.

- Structure:

Administrative Council

- Chairman of the Board of Directors: Nguyen Thi Hoa

- Members of the Board of Directors: Tran Que Trang, Henry Chung, Vo Tong Xuan, Le Quang Hai

Board of Directors / Chief Accountant:

- General Director: Tran Que Trang

- Permanent Deputy Director: Tran Quoc Thao

- Deputy General Director: Nguyen Quoc Viet, Nguyen Thanh Khiem- Factory Director: Phan Minh Nhat Le Dinh Nghiem

- Supporting team director: Ms Ho Nguyen Duy Khuong- Sales Director: Ms Duong Thi To Chau, Mr Trinh Duc Vu- Production director: Nguyen Thanh Cuong

- Chief Financial Officer: Nguyen Hoang Tuan, Vo Minh Cong- Chief Accountant: Ngo Thi Thanh Hang

Control Board:

- Head of Supervisory Board: Mr Le Van Hoa

- Members of the Supervisory Board; Luu Dang My Quynh, Nguyen Thuy Van

3.Situation analysisa.Company SWOT analysis

- Owned farms of 100% mechanized

- 9 Factories with advanced technology, sugarcane crushing capacity of up to 37,500 TCD

- 4 Factories capable of refinery from raw Sugar - 1 Factory operating all year round

- 1 Factory with the largest capacity in the country 2 Diversified products with self-contained value chain

- 13 Sugar products with 47 trade marks, meeting all customer needs - Clean Sugar products, manufactured by European technology according to ISO 9001 and ISO 22000 standards

- 4 By-products, contributing 7% of Revenue

- Well established brand name, products on consumer’s top of mind 3 Widespread business network, convenient distribution system- 4 Distribution channels

- B2B and B2C with both substantial advantages - Exports at 6 big markets, ready to expand new markets - Convenient storage and distribution locations enable to supply domestic and export customers easily

4 Qualified staff

- The Management with many years of experience in the Sugarcane Industry

- Clear and detailed strategic directions

- IFC and Deloitte in CG and strategic consultancy

- Proactively satisfying international standards in CG, information disclosure and financial management

-Weakness:

- High refinery, transportation costs as compared to other countries in theRegion and in the world, leading to high production costs

- Science and technology not yet widely applied

- Low Sugarcane and CCS quality

- The Sugar Industry’s value chain not yet fully utilized

- Unexpected profit margin for By-products

- High interest expenses due to post M&A expansion

- The world Sugar prices are expected to rebound thanks to

macroeconomic conditions, stable consumption output while production

output have been decreasing

- Demands for biofuel have been increased

- When the ATIGA becomes effective, the Company has the opportunity to accessing the market of 650 million people in Southeast Asia, accessing to cheap raw Sugar without tax imposed on amount exceeding the quota of exemption

- Vietnam has high economic growth, especially the rise of the MAC

- Young population structure leads to high demand for energy

- Sugar consumption per capita is low and forecasted to grow strongly

- Energy demand is increasing given the shortage of petroleum product supply

- The Government has plans to subsidize prices for electricity producer from Bagasses, which are expected to rise to 7.5 cents/KWh from 5.8 cents/KWh

- The Government tightens its surveillance against smuggling, trade frauds, increased tariffs on liquid Sugar and quality control

- The ATIGA is extended until 2020, for the Company to improve production capacity and lower production costs

- Consistent domestic inventories

- Complicated situation of Sugar smuggled to affect the Sugar prices

- Thai Sugar, smuggled Sugar, liquid Sugar at low prices to put great pressure on domestic Sugar one

- Low profitability as compared to other crops, significantly affecting theraw material supply

- Climate change, unusually bad weather, drought, floods, causing low sugarcane quality and CCS Not being loyal farmers with Sugarcane due to profitability.

b.Product/ service SWOT analysis

● Diversified products with extremely large production scale● Quality guaranteed, meeting all the needs of customers● Have a clear sales direction

● The long-standing brand, the products that are interested by consumers,the number of single customers and large customers are always stable, equivalent to stable profits.

● Extensive business network, convenient distribution system● Meet international standards

● Low Sugarcane and Commercial Cane Sugar quality

● Although machinery and equipment have been invested and upgraded, the technology is still outdated compared to the region and the world, so the cost is still high , making it difficult to compete in the economy integration● Marketing activities are not effective, leading to low profits for By-products

● World sugar prices are expected to rebound thanks to stable

macroeconomic conditions while decreasing production output.● The legal policies of the State are giving preferential treatment to businesses

● The natural soil conditions are favorable to create momentum for production

● Domestic demand for sugar is increasing● Potential for large population size

● Bank interest rates and exchange rates soared

● Competition is weak when compared to the region and the world● More and more substitutes were introduced, strongly competing in the domestic sugar market

● Requirements for quality and food safety

● Climate change and unusually bad weather reduce the quality of sugar● Low price imported sugar

● Inventory

c.Competitive analysis

1.Bourbon Tay Ninh Sugar Joint Stock Company

- The market share is 7%- 100% foreign capital use- Strength:

• New machinery and equipment systems, using advanced technology, large capacity (pressing capacity of 8000 tons of raw sugarcane / day) can meet

the upcoming development trend of the sugar industry.

• Factory location is located in the raw material area, helping to reduce transportation costs Stable material source In addition, the Company has itsown power plant, both meeting the needs of electricity production, while selling electricity to increase income

• Debt to equity ratio is only about 2.2%, so the company is not under pressure to pay interest from banks In addition, the accumulated money from fixed asset depreciation and annual profit is very large, ensuring investment in large projects for the company.

• Lean, simple organization of human resources, reducing personnel risks as well as reducing management costs.

• Most of the Company's idle money is used for short-term financial investments With the current stock market situation, financial investment will face many risks.

• The company has quite a few large investment projects, but progress is slow It is expected that the main income of the Company in the next 2 yearswill mainly come from sugar sales.

2.Lam Son Sugarcane Joint Stock Company

- Account for about 10% market share- Strength:

● Sugar production costs fluctuate at VND 9,600 / kg (about 26% lower than industry average) due to chain ownership production is modern and hasa lower purchase price for sugarcane than other businesses other listing business.

● Production activities are highly efficient with the best sugar / cane efficiency in the country is 114.61 kg sugar / 1 ton of sugarcane.● Owning a stable raw material area because it creates a good relationship with farmers.

- Weakness:

● Raw materials areas are difficult to mechanize.

● Although the net revenue from sales increases year by year but● The company's gross profit tends to decrease due to the decrease in strong selling price to increase competitiveness with smuggled sugar, mainlyfrom Thailand with very low prices.

3.Potential rival

● Foreign companies pouring into the market in our country like imported sugar from Thailand, Indonesia, are almost cheaper than

domestic product prices.

● Specifically among them are Thailand:

(1) Thailand has higher yield and quality of sugarcane: The sugarcane material area of Vietnam produces sugarcane with an average yield of 65 tons of sugarcane / ha, lower than 77 tons / ha of Thailand The reason is that the natural conditions in Vietnam are not as favorable as Thailand as well as the development of sugarcane varieties suitable for the raw material regions in the country.

2) Thai sugar cane raw material price is low: The production cost of domestic sugar enterprises is higher than that of your country Sugar production costs sugar cane from Vietnam is currently at about 13,000-15,000 VND / kg, 30% - 40% higher than Thailand (only takes from 8,000 VND- 9,000 VND / kg of sugar).

(3) Sugar mills in Thailand have economies of scale over Vietnam.

d.Customer analysis

Sugar is an indispensable spice in daily life activities:

- Consumption is stable for single and infrequent consumers, who buy with small quantities

- Major customers (soft drinks, milk, coffee, food, ):● PepsiCo

● CocaCola

● Trung Nguyen Instant Coffee● VINACAFÉ BIEN HOA

● YAKULT VIETNAM● Acecook Vietnam● Nestle

● Vinamilk● LOTTE Vietnam

● SAIGON BEVERAGE (TRIBECO)● Cholimex Food

=> Businesses buy in large and stable quantities, they are the main customers which company is targeting.

- The company proactively developed export markets in order to diversify markets, create sustainable steps for the Bien Hoa Sugar brand in the future The lines of organic sugar, liquid sugar, big - bag sugar, have met the standards and have been exported to over 21 countries in the MiddleEast, Europe, Asia, and even conquered the fastidious market - North America.

4.Marketing analysisa.Market and target customer

Bien Hoa Sugar Joint Stock Company is a pioneer in the sugar industry witha history of 45 years of development and has built up a strong brand name inthe Vietnamese market Now, Bien Hoa Sugar is leading the country in business output of sugar and is the company with the diverse sugar product in the country for both industrial customers and consumers, and at the same time achieving the best quality

Including products for consumers have dozens of different types that are suitable for many customers such as Bien Hoa Daily, Pure, Pure Gold, Minineral, Value Vitamin A, Bien Hoa Pro Alum, Bien Sugar Hoa Pro Baking; types of Joy bag sugar (6 grams, 8 grams), BH Joy sugar tablets (500 g), BH Joy Shaker sugar 300g….

Bien Hoa Sugar is a supplier of production sugar for leading food and pharmaceutical companies in Vietnam such as Vinamilk (VNM), Vinacafe (VCF), Hau Giang Pharmaceutical (DHG), Pepsi, Ajinomoto

Targeted customer:

- The product lines of Bien Hoa sugar are developed for all ages except for those suffering from diabetes For the simple reason, everyone needs sugar in most foods

Bien Hoa Street divides target customers into two groups:+ Group of individual customers (B2C)

+ Group of institutional customers (B2B)

b.Differential/ competitive advantage

- The best of Bien Hoa sugar on the market today, specifically as it is the only company in the country with a diversified product chain (sugar, industrial sugar, pocket sugar, alum sugar, pellet sugar, vitamin sugar, baking sugar, stick sugar, brown sugar ) to meet the diverse needs of customers and is the business with the most complete distribution system compared to other companies in the same industry The selling price of BienHoa sugar is always higher than that of other businesses, but still accepted by customers and consumers thanks to the highest quality affirmed for manyyears.

- Bien Hoa Sugar Factory is the only entity that owns a technology refining sugar factory, which can produce year-round with high quality and stability without depending on raw material areas like other

Japanese-sugar companies This is one of the advantages that helps the company assert the quality of its brand name for many years.

- In addition, the company is located adjacent to the major consumption areas of Binh Duong Industrial Park - Ho Chi Minh City - Dong Nai, so the sales team can reach and serve customers very quickly at the same cost transportation is low and competitive, especially in the period when transportation costs are increasing at the present The company focuses on measures to lower costs of products, increase competitiveness, expand consumption market share, thereby increasing profit margins in the context of low sugar prices in the market.

- Currently the company has 2 sugar factories with a capacity of 6,500 tons / day in Tay Ninh and Tri An (Dong Nai), a sugar refining factory of 400 tons / day also in Dong Nai and a raw material area of 11,000 hectares, of which 1,000 ha owned by the company, yield around 70 tons / ha This is considered the equivalent of average yield in Thailand (75 tons / ha), the world's leading sugar exporter.

- Bien Hoa's strategy is to focus on improving the investment

management process for raw material areas through selection of seeds, soil preparation, fertilization, care techniques, especially investment in irrigationsystems suitable to the conditions each area to increase productivity while reducing costs The company also invests in an automatic harvesting machine with a capacity of 800 tons of sugarcane / day, which will help reduce labor, limit material loss and also increase post-harvest sugar quality.- In addition, the product diversification strategy continues to be maintained In particular, promoting new products such as bag sugar,