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VIETNAM CASHEW MARKET REPORT Q1/2018

2

Content

Abbreviations 3 3. Cashew Market in Vietnam 40

Report Summary 4 3.1 Definitions and Classification 40

1. Business Environment 6 3.2 Process and Production Technology 45

1.1 Macroeconomic situation 6 3.3 Production 51

1.2 Legal Framework 11 3.4 Consumption 58

1.3 Impact of Trade Agreements 17 3.5 Export - Import 61

2. Global Cashew Industry 21 3.6 Price 66

2.1 Industry Value Chain 22 4. Risks in Vietnam Market 69

2.2 Production 23 5. Planning 73

2.3 Consumption 28 6. Prospects and Forecasts 76

2.4 Export - Import 31 7. Enterprise Analysis 80

2.5 Price Movement 34 Financial Statement Appendix 97

2.6 Current situation in some typical countries 36

3

Danh mục từ viết tắt

GCC Global Cashew Council

INC International Nut and Dried Fruit Council

NHHH/SBV State Bank of Vietnam

GDVC General Department of Vietnam Customs

GSO General Statistics Office of Vietnam

MARD Ministry of Agriculture and Rural Development

LLC Limited Liability Company

Vinacas Vietnam Cashew Association

VIRAC Vietnam Industry Research And Consultancy

4

Report Summary

Cashew is mainly planted in India, Ivory Coast,

Brazil and Vietnam.

The raw cashew production output is

continuously increasing by CARG = 3% during

the 2009/2010 – 2016/2017 season.

The cashew kernels production output globally

in the season 2016/2017 continues increasing

and reaches about 754.7 thousand tons

The demand for cashew kernel consumption

reaches 787 thousand tons in 2017, increasing

by 10% compared to 2016.

In 2016, cashew kernels export globally

reached about 498.1 thousand tons, decreasing

slightly compared to 2015 which was 502.4

thousand tons.

Vietnam is currently the largest exporter of

cashew kernel in the world with the exports

accounting for 56% of the global output in

2016.

In 2017, the cashew growing area is estimated

to be 240.4 thousand hectares, 252 thousand

tons of the output which was decreased by

almost 50,000 thousand tons compared to

2016.

Although Vietnam is the greatest exporter of

cashew, the industry in Vietnam still faces

challenges, for example, the domestic

production output only meets 1/3 of the

export processing enterprises.

The domestic consumption of the cashew

kernels accounts for 10% and the rest is for

export.

THE CONTENT IS INTENTIONALLY REMOVED FOR DEMO

PURPOSE

5

Report Summary

There are still opportunities for the prospects

of cashew industry in Vietnam to grow in the

next few years.

According to Vinacas, in 2017, the whole

industry makes attempt to reach 330 thousand

tons of exporting types of cashew kernel with

over $3.3 billion

In 2016, most of the enterprises have positive

growth of net revenue and the average growth

reached 13.9%.

Olam Vietnam is the largest revenue earner.


PURPOSE

Content

6

1. Business Environment

1.1 Macroeconomic Situation

1.2 Legal Framework

1.3 Free Trade Agreements


1.1. Macroeconomic Situation

7

Sources: VIRAC, GSO

Sources: VIRAC, GSO

Gross domestic product (GPD) in the first 9 months of 2017 is

estimated to increase by 6.41% compared to the same period last

year, in specific, Q1 increased by 5.15%, Q2 increased by 6.28% and

the increasing estimation for Q3 is 7.46%.

In terms of the increase by 6.41% of the whole economy in the first

9 months of this year,

Cashew is one of the key products of Vietnamese agriculture in the

global market.

GDP growth from 2011-9M/2017

GDP structure due to the current price, Sep/2017


PURPOSE



8

Sources: VIRAC, GSO

Available income and household expenditure, 2008 – 2017fMillion dong Available income has the uprising trend which is the positive driving

force for the spending on dining demand.

The continuous increase in available income and household

expenditure in the past few years has been the development

motivation for the cashew industry in the country.

Vietnam is currently

having fastest speed of growing the Middle class and Upper class in the

Southeast Asia and forecasted to reach 33 million people in 2020

Population structure divided by classes (expenditure), 2013 – 2020f

Sources: VIRAC collected, BCG

Million people


PURPOSE



9

Sources: VIRAC, MARD

In the first 9 months of 2017, the vegetables and fruits product is 1st

ranked, replacing coffee to be the main agricultural products of Vietnam

export structure.

Cashew has always been the main agricultural export product in many

years of Vietnam.


Million USD

The export structure of main agricultural

export products of Vietnam, 9M/2017

Price and cashew proportion in main agricultural products, 2010 – 9M/2017e


PURPOSE



10

Sources: VIRAC, SBV

The exchange rates of VND/USD in the first 9 months of 2017 remains

stable which is around 22,400.

• According to the national financial supervisory, in the last months of

2017, the exchange rate of VND/USD will be strongly impacted by

the demand for foreign currency resulted from high trade deficit.

• Currently, cashew of Vietnam is mainly used to export and America

is the greatest market for Vietnam.

Sources: VIRAC, Nielsen

• Consumer Confidence Index of Vietnam increased sharply in

Q4/2016 by 112 points.

Exchange rate of VND/USD, 2016-9/2017

Consumer Confidence Index, 2014 - 2016


PURPOSE

Content

11


1.1 Macroeconomic Situation

1.2 Legal Framework



1.2. Legal Framework

12

• QCVN 01-08:2009/BNNPTNT

• QCVN 01–27: 2010/BNNPTNT:

• TCVN 4850:2010

Abbreviations used to classify the cashew kernels

Descriptions English Abbreviations


PURPOSE



13

Quality classification of cashew kernels

Levels SignsNumber of

kernels/kg

Number of

kernels/lbTradenames Descriptions


PURPOSE



14

Levels SignsNumber of

kernels/kg

Number of

kernels/lbTradenames Descriptions

Quality classification of cashew kernels (continue)


PURPOSE



15

• TCCS 2013 /HĐT/VINACAS:

General technical requirements:

Quality classification requirements

Classification on raw cashew nuts

No. Cashew nuts which DO NOT pass through the tube

with hole diameter as follows

Size (Cashew nuts/kg)


PURPOSE



16

Types of export and import taxes applied for cashew industry

Group of regulations on import and export cashew


PURPOSE

Content

17


1.1 Macroeconomic situation

1.2 Legal Framework




18

Vietnam trade integration process from 1995 to present

Until the end of 2016, Vietnam has signed, implemented, and is negotiating a total of 16 FTAs. Accession to international trade agreements brings

opportunities and challenges for domestic firms.


PURPOSE



19

Vietnam – EU (EVFTA) free trade agreement

• Opportunities:

• Challenges:

• Solutions:


PURPOSE



20

RCEP trade agreement

• Opportunities:

• Challenges:

Solutions:


PURPOSE

Content

21

2. Global Cashew Industry

2.1 Industry Value Chain

2.2 Production

2.3 Consumption

2.4 Export – Import

2.5 Price Movement

2.6 Current situation in some typical countries

2. Global cashew industry

2.1 Industry value chain

22

Industry value chain

Sources, VIRAC collected


PURPOSE

Content

23



2.2 Production

2.3 Consumption


2.5 Price Movement


24

Sources: VIRAC, Cashew Handbook

In the season of 2016/2017, the cashew

planting area is estimated to reach 4,509 thousand hectares,

Cashew is mainly planted in India, Ivory Coast, Brazil

and Vietnam

Thousand hectares



2.2 Production

Global cashew planting regions

Sources: VIRAC, INC

Global cashew planting structure, 2016/2017

Global cashew planting area, 2009/2010 – 2016/2017


PURPOSE

25

Thousand tons



2.2 Production


India is the largest country of producing raw cashew with 851

thousand tons in the season of 2016/22017

Global raw cashew production output, 2009/2010

– 2016/2017

Global structure of cashew production, 2016/2017

The raw cashew production output is continuously increasing by CARG = 3%

during the 2009/2010 – 2016/2017 season


PURPOSE

The global cashew kernel production output in the season

2016/2017 continues reaches 754.7 thousand tons and increases by

4% compared to the previous season.

The main producer in season 2016/2017 is the Ivory Coast.

In the season 2016/2017, the production value

reaches about 6,720 million USD, increases by 34.4% compared to

the last season.

26

Thousand tons

Sources: VIRAC, INC


2.2 Production

Sources: VIRAC, INC Sources: VIRAC, INC

Million USD

Global cashew kernel production output, 2006/2007 –

2016/2017

Cashew kernel production structure, 2016/2017 Global cashew production value, 2006/2007 – 2016/2017


PURPOSE

In the season 2016/2017, cashew is 4th ranked in terms of production

output

However, the production value is 2nd ranked with 6,726 million USSD

27

Million USD


2.2 Production

Sources: VIRAC, INC

Sources: VIRAC, INC

Thousand tons

The global cashew industry is facing demand exceeding supply

problem.

Production value of types of raw nut in the world,

2016/2017

Production output of cashew nuts compared to other nuts, 2006/2007 –

2016/2017


PURPOSE

Content

28



2.2 Production

2.3 Consumption


2.5 Price Movement


The demand for cashew kernel consumption is estimated to reach 787

thousand tons, increase by 10% compared to 2016

The

main consumption markets are India, America, Europe and Middle East

Netherlands is now the highest cashew consumption per capita country in

the world, approximately 1.39kg/person/year in 2015.

29


2.3 Consumption

Thousand tons

Kg/year

Sources: VIRAC, INC Sources: VIRAC, INC

Sources: VIRAC, INC

Kg/year

Global cashew kernel consumption

structure, 2016e

Global cashew kernel consumption, 2011 – 2017e

Consumption per capita of some typical cashew

consumption countries, 2011 - 2015


PURPOSE

30


2.3 Consumption

Sources: VIRAC, INC

From 2010 to present, the demand has gone up by 53% and within 7 years, there are at least 4 years that the demand exceeds the supply

The increase in demand is strong in China and Europe – 2 markets which account for 70% of the consumption globally, making the export rise to a record

number in history which was 503,713 thousand tons in 2014.

Thousand tons

Consumption of dried nuts in the world, 2011 - 2015


PURPOSE

Content

31



2.2 Production

2.3 Consumption


2.5 Price Movement


In 2016, the export for cashew kernel in the world reached

approximately 498.1 thousand tons, decreased slightly compared to

2015 which was 502.4 thousand tons and the value was $3.9 billion.

The main reason which was the preference for cashew all over the world

so the consumption for the cashew

32


2.4 Export - Import

Sources: VIRAC, INC, ITC

Thousand tons

Sources: VIRAC, ITC

Million USD

Besides the uprising trend for exporting cashew, the cashew price has

also gone up strongly in the recent years.

The export value for cashew kernel in the world,

2017 – 2016e

The export output for cashew kernel in the world,

2005 – 2016e


PURPOSE

33


2.4 Export - Import

Sources: VIRAC,, ITC

Sources: VIRAC, ITC

Vietnam is now the largest cashew exporter in the world with the export

output accounting for 56% of the global output in 2016.

The second place is India with the output accounting for 17% of the global

output in 2016

America is the largest importer of cashew in the world

In Europe, Germany, Netherlands, France, Britain and Belgium are the great

importing of cashew countries

Cashew kernel import structure in the world, 2016e

Cashew kernel export structure in the world, 2016e


PURPOSE

Content

34



2.2 Production

2.3 Consumption


2.5 Price Movement


In the first 9 months of 2017, the price movement has the tendency to

increase sharply.

35


2.5 Price movement

Sources: VIRAC, CBI Ministry of Foreign Affairs

In general, manufacture cost, insurances and transportation of raw cashew

account for about 50% of the cashew kernel’s retail price in the market

Cashew price in the world, 1/2015 – 10/2017

Sources: VIRAC collected

USD/kg

Analysis of cashew’s retail price by contribution ratio,

2016


PURPOSE

Nội dung

36



2.2 Production

2.3 Consumption


2.5 Price Movement


The output of raw cashew in the season 2016/17 reached about 851 thousand

tons, accounting for 23% of the global output.

India is the largest consumption of cashew kernel country in the world, the

consumption is 25% of the total global supply

The cashew export of India is estimated to reach 176,000 tons in the season

2017/18, it increases compared to the season 2016/17 which was 155,000 tons

37

Thousand hectares


Sources: VIRAC, Cashew Handbook, INC

Thousand tons


2.6 Current situation in some typical countries - India

Cashew planting area in India, 2009/2010 – 2016/2017

The production output in India, 2009/2010 – 2016/2017


PURPOSE

38

Thousand hectares



Thousand tons


2.6 Current situation in some typical countries – Ivory Coast

Ivory Coast is 2nd ranked in producing cashew in the world,Cashew planting area in Ivory Coast, 2010 – 2017e

The production output in Ivory Coast, 2009/2010 – 2016/2017


PURPOSE

39

Thousand hectares



Thousand tons



Brazil always plays an important role which is one of the leading

countries in the world to produce, process and export cashew.

However, in the recent years, due to droughts in most states of

northeastern Brazil, their entire production system has declined.

The strong decline in production since 2012 has impacted on the

industry of processing and export

The output in 2018 is expected to be good like 2011 if the amount of

rain remains stable

The production output in Brazil, 2009/2010 – 2016/2017

Cashew planting area in Brazil, 2009/2010 – 2016/2017


PURPOSE

Content

40

3. Cashew Market in Vietnam

3.1 Definitions and Classification

3.2 Process and Production Technology

3.3 Production

3.4 Consumption

3.5 Export - Import

3.6 Price

Season of cashew

The countries in the north of the equator, including India, Vietnam and west African have

the early harvest time from the beginning of the year to mid-year.

41

3. Cashew market in Vietnam


Flowering time and harvest of cashew


PURPOSE

Some terminologies and definitions

Classification of cashew kernels

42

The components of cashew

Category Commercial terminologies Descriptions




PURPOSE

Quality tolerance

43

Percent Defective Allowable The best types Type I Type II

Sources: VIRAC collected, INC


PURPOSE



Cashew kernel type I (scorched/dessert - LB)

44

The best type of cashew kernel (white)

White pieces Scorched pieces




PURPOSE

Content

45




3.3 Production

3.4 Consumption

3.5 Export - Import

3.6 Price

46


3.2 Process and production technology

Cashew processing


PURPOSE

47

Step 1: Moisture

Raw cashew classification machine




PURPOSE

48

Step 2: Heat treatment (Steaming/Roasting): The choice is either steaming or roasting

- There are two methods for roasting which are simply direct roasting in oil the cashew shells

- Steaming

Cashew roasted machine


PURPOSE



49

Step 3: Cutting and splitting

Step 4: Drying

Cashew cut and split machine

Step 5: Silk peeling off

Step 6: Classifying

.

Cashew silk peeled off machine




PURPOSE

50

Step 7: Quality control/Fumigation

Step 8: Packaging




PURPOSE

Content

51




3.3 Production

3.4 Consumption

3.5 Export - Import

3.6 Price

The cashew productivity of the whole country in 2017 is estimated to reach

only 8.7 weight/hectare, decrease by 0.21 weight/hectare compared to

2016.

52


3.3 Production

Thousand hectares


Weight/hectare

The cashew planting area of Vietnam is having tendency to decline

continuously

In 2017, the cashew planting area

is estimated to reach 240.4 thousand hectares, the output is 252 thousand

tons which reduces by 50,000 tons compared to 2016.

Thousand tons


The planting area and productivity of cashew in

Vietnam, 2012 – 2017e

The output of cashew in Vietnam, 2012 – 2017e


PURPOSE

The main reason for the reduction of cashew planting area is the relatively low economic benefits of the cashew cultivation.

53

No. Crops Types of cashew

Average

productivity

(ton/hectare)

Unit price

(million dong)

Total revenue

(million dong)

Total

expenditure

(million dong)

Profit (million

dong)

Comparison of economic efficiency of 1 hectare when planting cashew applying intensive farming method with rubber and cassava

at Tan Lap in 2012



3.3 Production


PURPOSE

Additionally, the productivity and planting area declined due to the impact of the weather.

Currently, Binh Phuoc is the province which has the largest planting area with 134,170 ha,

accounting for 44.7% of the country’s planting area. The cashew planting area in the

regions of the province

54


Dong Nai is 2nd ranked in terms of cashew planting area, now it has 38,000 ha of planting area, accounting for 12.7% of the country’s are and decreasing

thousands of hectare compared to previous season.

The planting area of some provinces in Tay Nguyen like Đắk Lắk, Gia Lai, Kon Tum, Đắk Nông, Lâm Đồng is reducing fast, which remain only 73,000 ha in

2016,

Cashew planting area structure, 2017e


3.3 Production


PURPOSE

55

Thousand tonsThe cashew production industry in Vietnam has gained some remarkable

achievements, with 1st ranking in cashew kernel exports, 2nd ranking in

processing and 3rd in productivity and output in the world.

the domestic production output only meets 1/3

of the demands of the processing and export enterprises.

Thus, although Vietnam is a great export country, it has just participated in

simple processing, which is equal to 18% of the cashew value chain.

According to the Department of Agriculture, Forestry, Fishing and Salt

Processing, Vietnam has 345 businesses taking part in exporting cashew,


Cashew production situation, 2010 – 2017e


3.3 Production


PURPOSE

To improve the situation which the domestic production only meets 1//3 of the demand from the processing and export enterprises, making these

business face many risks because of difficulty in input quality control, Vinacas has cooperated with the Ministry of Agriculture, Forestry and Fishing

Cambodia and also this country’s enterprises to build 1-million-ton of raw material region in the coming times.

56

Quality of cashew kernel in Vietnam


3.3 Production


PURPOSE

57

Besides the production for cashew kernels, nowadays, these by-products are used by many companies to produce export products that bring in hundreds

of millions of dollars.

Some difficulties of cashew businesses in Vietnam


3.3 Production


PURPOSE

Content

58




3.3 Production

3.4 Consumption

3.5 Export - Import

3.6 Price

Cashew kernel wholes Cashew kernel butts Cashew kernel baby bits Cashew kernel powder Cashew kernel milk

Uses of cashew kernels

59


3.4 Consumption


PURPOSE

60

The domestic consumption for cashew kernel accounts for 10% and the rest

is for export. It is forecasted that the domestic consumption will rise in the

next few years.

Sources: VIRAC, VITIC

Tons

The domestic consumption of cashew in 2017 is estimated to reach

30.5 million tons

Domestic consumption of cashew kernel, 2012 – 2017e


3.4 Consumption


PURPOSE

Content

61




3.3 Production

3.4 Consumption

3.5 Export - Import

3.6 Price

In the first 9 months of 2017, the processing and export enterprises reach

258.4 thousand tons of cashew, the exports is 2,561 million tons.

The cashew export of Vietnam continues to be 1st ranked in the

world when accounting for 50% of the raw processing cashew and above

60% export cashew kernel globally.

62


3.5 Export and Import – Export

Thousand tons

Sources: VIRAC, GDVC

Million USD

Value and output of cashew exports in Vietnam,

2013 – 9M/2017e


PURPOSE

In terms of exported cashew categories,

63


There are 80 countries which import cashew of Vietnam currently, in

specific, America is the largest importer with 35% of the output,


Output structures of cashew exports by type,

9M/2017e

Market structures of cashew exports by output, 9M/2017e




PURPOSE

In the first 9 months of 2017, top 20 of cashew export businesses have

exported 111,604 tons, accounting for 43.59% of the total exports of

the whole industry

64

Tons

Sources VIRAC, GDVC


Cashew export structures, 9M/2017e

Top largest cashew export enterprises in Vietnam, 9M/2017




PURPOSE

65

Thousand tons


Million USD


Cashew imports of Vietnam in September/2017 reduced strongly compared

to the previous month of the same period last year due to the decline of

the cashew material supply.

Until the end of September, Vietnam has imported over 1.1 million tons of

raw cashew with the total imports reaching above $2.18 billion, increasing

40.8% in terms of weigh and 81.2% of value compared to the same period

in 2016.

The value and imports of cashew in Vietnam, 2013

9M/2017e

Cashew import market by value, 9M/2017e


3.5 Export and Import – Import


PURPOSE

Content

66




3.3 Production

3.4 Consumption

3.5 Export - Import

3.6 Price

67


3.6 Price

The cashew farmers are excited due to the high purchase price in 2017 with

50,000 VND/kg of dry and warehousing nuts averagely (the average price in 2016 is 38,000 VND/kg).

In particular, the dry cashew kernel which is purchase in Binh Phuoc in the first 9 months of 2017 is averagely 54,000 VND/kg, increasing by 35%

compared to the same period in 2016.

It is forecasted that the price in the last months of 2017 and the beginning months in 2018 will remain high

Source: VIRAC collected

VND/kg

Price of dry cashew in Binh Phuoc, 1/2014 – 8/2017


PURPOSE

Price of export cashew:

Import price:

68

Sources: VIRAC, GDVCSource: VIRAC collected

USD/ton

Average import cashew price, 1/2013 – 9/2017 Export price FOB HCM, 11/2016 – 9/2017


3.6 Price


PURPOSE

4 Risks in Vietnam market

Content

69

Risks due to the dependence on materials

Risks when importing cashew

Competitive risks in cashew export market

70

4. Risks in Vietnam market


PURPOSE

Interest rate risks

Weather risks

Economic risks

Environment risks

Other risks

71



PURPOSE

72


Strengths Weakness

Opportunities Threats


PURPOSE

5 Planning

Content

73

74

On February, 13th, 2015, Ministry of Agriculture and Rural Development has enacted the decision 579/QĐ-BNN-TT in regard to approving of

development plan for cashew industry up to 2020 and the orientation to 2030.

Development goals

Development plan up to 2020 and orientation to 2030

5. Planning


PURPOSE

75

2. Planning for cashew processing

5. Planning


PURPOSE

6 Prospects and Forecasts

Content

76

6. Prospects and Forecasts

Prospects

77

- Cashew industry in the world

- There are a lot of opportunities for the prospects of cashew industry in Vietnam to grow in the next few years


PURPOSE

6. Prospects and Forecasts

Forecasts

78

- Cashew industry in the world

Global cashew council (GCC) has forecasted the total global output of the season 2017/2018 will reach 7.4 million tons of fresh cashew, which is equal to

3.322 million tons of raw cashew

- Forecast for Vietnam cashew industry

In 2017, the whole cashew industry will make efforts to export 330 thousand tons every types of cashew kernel with the exports of $3.3 billion

In 2018, Vinacas sets goal for reaching the exports $3.5 to $3.7 billion of the whole industry

It is predicted that the domestic material price will remain high in the last months of 2017 and the beginning months of 2018 due to the shortage of

processing and export material.


PURPOSE

6. Prospects and Forecast

Forecast

79

Forecast in 2018 shows the loss of revenue of cashew output, being

reduced after the difficulties in weather in 2016 and 2017

In 2020, VIRAC predicts that the production output will increase slightly

and reach about 300 thousand tons due to the recovery of cashew

planting area

Thousand tons

Source: VIRAC

Thousand tons

In regard to cashew export in the next few years, it is predicted that

Vietnam will still remain 1st ranked country in exporting cashew in the

world. The forecast of VIRAC is the growth of Vietnam cashew export

output by 2.2%/year averagely from 2017 to 2020.

Forecast for cashew production output in

Vietnam, 2012 – 2020f

Forecast for cashew export output in Vietnam, 2013

– 2020f


PURPOSE

Content

80

7. Enterprise analysis

81

7. Introduction of enterprises

Top of cashew processing and export enterprises of Vietnam

Names Addresses Total asset in

2016 (billion

VND)

Net revenue in

2016 (billion

VND)


PURPOSE

OLAM VIETNAM LLC

82

Hoang Gia Luan Trade – Service LLC


PURPOSE

Introduction of enterprises

83

Hanoi Trade Corporation - HAPRO

Hanoi Trade Corporation operates in some fields

Export:

Import :

Import market


PURPOSE


84

Long Son Joint Stock Company

Annual revenue:

Total number of employees:

Rank:

Main business sectors:.

Additional business:

Long Sơn has 8 big factories which

producing cashew


PURPOSE


85

Thao Nguyen Co., LTD

Total number of employees:

Main business sectors:

Production and business capacity of Thao Nguyen LTD mainly includes:

Export market consists of:


PURPOSE


86

Hoang Son I Joint Stock Company

Address:

Main business sectors

Material sources

Export market:

Manufacture factory: Quality standard:

Main products:


PURPOSE


87

Hai Viet LLC

Headquarter address:


Rals International Vietnam Co., LTD

Address:


Exports:

Phuc Vinh Manufacture – Trade LLC


PURPOSE


88

Long An Processing and Export Joint Stock Company (LAFOOCO)


PURPOSE


Content

89

7. Enterprise Analysis

7.1 Profitability

7.2 Operability

7.3 Performance efficiency

7.4 Profit Ratio

90


PURPOSE

Billion VND

Source: VIRAC

In 2016, most of the enterprises in the industry have positive growth of net revenue and the average growth reaches 13.9%.

Olam Vietnam is the largest revenue enterprise in the industry due to the big-scaled operation with 10 agriculture processing factories in the Middle and

the Southern, is one of the greatest corporations that exports cashew, pepper and instant coffee in Vietnam


7.1 Profitability

Net revenue, 2015 - 2016

91

Billion VND

Source: VIRAC

In 2016, most of the enterprises have their gross profit margin reduced compared to 2015

Gross profit margin, 2015 - 2016


7.1 Profitability


PURPOSE

Content

92


7.1 Profitability

7.2 Operability


7.4 Profit Ratio

93

Source: VIRAC

It can be seen that the common point of the enterprise in the industry is the main way to have the capital which is to borrow when the ratio between

debt and total asset is very high, above 70%, especially with the export business which have the rate above 90%

Repayment ability, 2015 - 2016


7.2 Operability


PURPOSE

94

Source: VIRAC


PURPOSE

Hai Viet và Phuc Vinh is 2 companies with the highest pay ratio because they have the least debt in the top of cashew enterprises, which use mostly equity

capital

Pay ratio, 2015 -2016


7.2 Operability

Content

95


7.1 Profitability

7.2 Operability


7.4 Profit Ratio

96

Source: VIRAC


PURPOSE

Hoang Gia Luan Company has the fastest fixed asset turnover in the industry

On the contrary, Olam VN, Hapro, Hoang Son I have lower fixed asset turnover than the average level of the industry.



Fixed asset turnover, 2015 - 2016

Content

97


7.1 Profitability

7.2 Operability


7.4 Profit Ratio


PURPOSE

98

Source: VIRAC

Thao Nguyen và Long Son are the two companies which have the highest profit ratio in the top of cashew enterprise. ROA of Thao Nguyen in 2016

reached 22%, meanwhile the ROE in 2016 was 14.3$

Rals International VN has the lowest profit ratio in the top of enterprise while ROA in 2016 was -44.4%, ROE was -2579%.

In general, the profit ratio of cashew enterprises in 2016 increased slightly compared to 2015.

7. Enterprises analysis

7.4 Profit ratio

Profit ratio, 2015 - 2016

Top cashew export enterprises having reputation in 2015 due to the Ministry of Industry and Trade

99

Appendix

No. Name Exports (kg) Units for selection

Sources: VIRAC, Ministry of Industry and Trade


PURPOSE

Content

100

Appendix for financial statement

Appendix

Financial Statement

101

Olam Vietnam LLC

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS

I. Cash and petty cash

II. Temporary investments

III. Accounts receivable

1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS

A. CURRENT LIABILITIES

I. Current liabilities

1. Loan and Current liabilities

2. Taxes and accounts payable to the state

II. Long-term liabilities

1. Loan and Long-term liabilities

2. Long-term accounts payable

B. OWNER'S EQUITY

TOTAL LIABILITIES AND OWNER'S EQUITY

BUSINESS RESULTS REPORT

Unit: VND 2015 2016

Net revenue from sales and services

Cost of goods sold and services

Gross profit of goods sold and services

Profit from financial activities

Financial cost

Interest expense

Cost of goods sold

Administration cost

Net profit from business activities

Gross profit before tax

Current corporate income tax expense

Deferred corporate income tax expense

Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016

I. Cash flow from operations

Depreciation of fixed assets

Gain (Loss) from unrealized exchange rate differences

Net Cash flow from operations

II. Cash flow from investing

Shopping, building fixed assets and other long-term

assets

Net Cash flow from investing

III. Cash flow from financing

Net cash flow from financing

Net cash flow during the year


PURPOSE

Appendix

Financial Statement

102

Hoang Gia Luan Trade – Service LLC

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

Appendix

Financial Statement

103

Hanoi Trade Corporation - HAPRO

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

Appendix

Financial Statement

104

Long Son Joint Stock Company

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

Appendix

Financial Statement

105

Thao Nguyen LLC

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

Appendix

Financial Statement

106

Hoang Son I Joint Stock Company

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

Appendix

Financial Statement

107

Hai Viet LLC

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

Appendix

Financial Statement

108

Ral International Vietnam Ltd

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

Appendix

Financial Statement

109

Long An Processing and Export Joint Stock Company (LAFOOCO)

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

Appendix

Financial Statement

110

Phuc Vinh Manufacture – Trade LLC

BALANCE SHEET

Unit: VND 2015 2016

A. CURRENT ASSETS




1. From customers

IV. Inventory

B. LONG-TERM ASSETS

TOTAL ASSETS








B. OWNER'S EQUITY



Unit: VND 2015 2016





Financial cost

Interest expense

Cost of goods sold

Administration cost





Profit after tax

CASH FLOW STATEMENT

Unit: VND 2015 2016







assets






PURPOSE

REPORT DISCLAIMER

111

Report Disclaimer:

This document has been prepared in good faith on the basis of information available at the date of publication without any independent verification. VIRAC has

produced this report for private circulation to professional clients only. All information and statistical data herein have been obtained from sources we believe to

be reliable and made to ensure the accuracy of the contents of the pages of the report at the time of preparation. Such information has not been independently

verified and VIRAC makes no representation or warranty, whether express or implied, of any kind with respect to the document and its contents, information and

materials. The content found in this report is proprietary to VIRAC and is provided solely for your personal and non-commercial use. You agree that you will not

use this report for any purpose that is unlawful and that you will not reproduce the report or redistribute it outside your organisation, or place it on a website for

public access without the express written permission of VIRAC.

SHOULD YOU NEED ANY ASSISTANCE, PLEASE CONTACT US:

VIETNAM INDUSTRY RESEARCH AND CONSULTANT (VIRAC JSC.,)

6 th Floor, Anh Minh Building, 36 Hoang Cau, O Cho Dua, Dong Da, Hanoi, Vietnam

Website: http://virac.com.vn/

Email: [email protected] | Tel: +84 463289520

Thank you !

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