VIETNAM COFFEE MARKET REPORT Q1/2018

Transcription

1 VIETNAM COFFEE MARKET REPORT Q1/2018

2 Content Abbreviations Production 37 Summary Consumption Business environment Export Import Macroeconomic situation Price Legal framework Planning World market Prospects and forecasts Production Enterprise Analysis Consumption Profitability Vietnam coffee market Operability Classification of coffee produced in Vietnam Performance efficiency Process and production technology Profit Ratio 84 2

3 Abbreviations ICO International Coffee Organization MARD Ministry of Agriculture and Rural Development SBV State Bank of Vietnam GDVC General Department of Vietnam Customs GSO General Statistics Office of Vietnam USDA United States Department of Agriculture Vicofa Vietnam Coffee - Cocoa Association Vinastas Vietnam Standards and Consumers Association VIRAC Vietnam Industry Research And Consultancy 3

4 Summary World coffee production in the 2014/2015 season decreased by 2.29% over the 2013/2014 season Vietnam currently grows two main types of coffee: Arabica and Robusta. Arabica is the most widely grown seed in the world, accounting for 63.22% of the total world coffee production. Domestic consumption of coffee in the period e with CARG of 7.9%, in which consumption of ground roasted coffee accounts for about two thirds of output, the remaining one third is instant coffee. 4

5 Summary In 2016/17 season, total quantity of imported coffee were estimated at 1 million bags, increasing from 640,000 bags in the previous season, The purchase of coffee from the farmers is mainly done by local traders, 5

6 Content 1. Business environment 1.1 Macroeconomic situation 1.2 Legal framework 6

7 1. Business environment 1.1. Macroeconomic situation Gross domestic product (GDP) in 2017 is estimated to increase by 6.81% compared to 2016, GDP growth rate, Coffee is one of the main agricultural products of Vietnam in the world market. Structure of GDP at current price, 2017 Source: VIRAC, GSO Source: VIRAC, GSO 7

8 1. Business Environment 1.1. Macroeconomic situation Million VND Disposable income and household expenditure, f Increased tendency of disposable income is a positive factor driving demand for eating. Disposable income and increasing household expenditure over the years are the driving force behind the development of the domestic coffee industry. Source: VIRAC, GSO Million peoplle Structure of population by stratification (expenditure), f Vietnam is currently the country with the fastest growing rate of middle and upper class in Southeast Asia and is expected to reach 33 millions of people by Source: VIRAC, BCG 8

9 1. Business environment 1.1. Macroeconomic situation Export structure of major agricultural products of Vietnam, 2017 Milion USD Value and proportion of coffee in main agricultural exports, Source: VIRAC, MARD Source: VIRAC, MARD 9

10 1. Business environment 1.1. Macroeconomic situation VND/USD Exchange rate, In VND/USD exchange rate remained relatively stable around VND 22,400 Source: VIRAC, SBV Consumer confidence index in Vietnam increased sharply in Q3/2016 with 116 points, Consumer confidence index, 2014 Q3/2017 Source: VIRAC, Nielsen 10

11 Content 1. Business Environment 1.1 Macroeconomic Situation 1.2 Legal Framework 11

12 1. Business Environment 1.2. Legal Framework On 9 April 2012, the Ministry of Finance issued Circular 55/2012 / TT-BTC guiding the valuation of coffee gardens, tea gardens associated with processing establishments when equitization took effect from May 25,

13 1. Business Environment 1.2. Legal Framework On May 31st, the Ministry of Agriculture and Rural Development issued Decision No / QD-BNN-TT promulgating the process of replanting Robusta coffee 13

14 1. Business Environment 1.2. Legal Framework National standard for green coffee 14

15 1. Business Environment 1.2. Legal Framework National standard for roasted coffee 15

16 1. Business Environment 1.2. Legal Framework National standard for ground coffee 16

17 1. Business Environment 1.2. Legel Framework Import and export taxes applicable to the coffee industry 17

18 1. Business Environment 1.2. Legal Framework Special Consumption Tax 18

19 Content 2. World Coffee Industry 2.1 Production 2.2 Consumption 19

20 2. World Coffee Industry 2.1 Production Thousand bags World production of coffee by season, 2007 / / 2017 World coffee production in the 2014/2015 season decreased by 2.29% over the 2013/2014 season, Source: VIRAC, ICO World coffee production in the 2016/2017 season reached at millions of bags, equivalent to 9.23 million tons, increase 1.52% over the 2015/2016 season. 20

21 2. World Coffee Industry 2.1 Production Structure of coffee production by types of nut, 2016/2017 Brazil is the largest Arabica producer in the world. Source: VIRAC, ICO Arabica production structure, 2016/2017 Colombia is the world's second-largest Arabica producer with production of Colombian Milds was million bags, accounting for 16.29% of the world's total arabica production. Source: VIRAC, ICO 21

22 2. World Coffee Industry 2.1 Production Structure of coffee production by region, 2016/2017 Production structure by country, 2016/2017 Source: VIRAC, ICO Source: VIRAC, ICO 22

23 Content 2. World Coffee Industry 2.1 Production 2.2 Consumption 23

24 2. World Coffee Industry 2.2 Consumption Thousand bags World coffee consumption by season, 2012/ /2017 Source: VIRAC, USDA According to the International Coffee Organization (ICO), consuming coffee in the world is increasing with expectation of demand over the next five years grow up by 25%. 24

25 2. World Coffee Industry 2.2 Consumption Europe is the largest coffee consuming region in the world Structure of world coffee consumption by region, 2016/2017 Asia is the second largest coffee consuming region in the world, account fof 21.62% of total coffee consumption. While being the largest producer and exporter in the world, South America has a much lower consumption of coffee. Structure of coffee consumption by country, territory, 2016/2017 Source: VIRAC, USDA Source: VIRAC, USDA 25

26 Content 3 Vietnam coffee market 3.1 Classification of coffee produced in Vietnam 3.2 Process and production technology 3.3 Production 3.4 Consumption 3.5 Export Import 3.6 Price 26

27 3. Vietnamese Coffee Market 3.1 Coffee Classification Currently, Vietnam cultivates two main types of coffee: Arabica and Robusta. Arabica Moka: Catimor: Robusta 27

28 3. Vietnamese Coffee Market 3.1 Coffee Classification Comparison between Arabica coffee and Robusta coffee Characteristics Arabica coffee Robusta coffee 28

29 Content 3 Vietnam coffee market 3.1 Classification of coffee produced in Vietnam 3.2 Process and production technology 3.3 Production 3.4 Consumption 3.5 Export Import 3.6 Price 29

30 3. Vietnam coffee market 3.2 Process and production technology Coffee beans production process Roasted coffee production process Instant coffee production process 30

31 3. Vietnam coffee market 3.2 Process and production technology Coffee beans production process Step 1: Coffee sorting machine 31

32 3. Vietnam coffee market 3.2 Process and production technology Step 2: Shelling machine Raoeng milling machine 32

33 3. Vietnam coffee market 3.2 Process and production technology Step 3: Step 4: Step 5: Hand-drying oven Rotary dryer 33

34 3. Vietnam coffee market 3.2 Process and production technology Step 6: Engelber Dry Milling Equipment Step 7: Step 8: Smout polishing machine Step 9: 34

35 3. Vietnam coffee market 3.2 Process and production technology Production process of roasted coffee beans Step 1: Step 2: Step 3: Standing roaster Step 4: 35

36 3. Vietnam coffee market 3.2 Process and production technology Production process of instant coffee from roasted coffee powder Extraction Condensation Drying Repatriation technology 36

37 Content 3 Vietnam coffee market 3.1 Classification of coffee produced in Vietnam 3.2 Process and production technology 3.3 Production 3.4 Consumption 3.5 Export Import 3.6 Price 37

38 3. Vietnam coffee market 3.3 Production According to the Ministry of Agriculture and Rural Development, the country now has 22 provinces and cities with 105 districts growing coffee, Structure of coffee growing area in Vietnam, 2016/17 Thousand hectares Planting coffee area in some provinces, 2014/ /18e Source: VIRAC Source: VIRAC 38

39 3. Vietnam coffee market 3.3 Production Dak Lak, Lam Dong, Dak Nong, Gia Lai are currently the key coffee growing areas of the country. Some provinces of Vietnam growing coffee Suitable altitude for growing Robusta and Arabica coffee Source: VIRAC 39

40 3. Vietnam coffee market 3.3 Production Ground roasted coffee processing factories and capacity, 2017e Thousand tons / year Dak Lak is the largest coffee producing area in Vietnam Source: VIRAC, Processing Department Thousand tons / year Instant coffee processing facilities and capacity, 2017e Source: VIRAC, Processing Department 40

41 3. Vietnam coffee market 3.3 Production The coffee production output of Vietnam in the past years has many changes. Coffee production output of Vietnam, 2012/ / 18e Thousand bags 60kgs Source: VIRAC, USDA Coffee production structure of Vietnam, 2016/2018e Source: VIRAC, USDA 41

42 Content 3 Vietnam coffee market 3.1 Classification of coffee produced in Vietnam 3.2 Process and production technology 3.3 Production 3.4 Consumption 3.5 Export Import 3.6 Price 42

43 3. Vietnam coffee market 3.4 Consumption Domestic consumption of coffee in the period e Domestic coffee consumption in Vietnam, 2012/ /18e Thousand bags 60kg However, compared to the average consumption of coffee in the region and in the world, the consumption of domestic coffee in Vietnam is very low, Source: VIRAC, USDA 43

44 3. Vietnam coffee market 3.4 Consumption In the period , retail coffee output in the domestic market of Vietnam Thousand tons Coffee retail sales in Vietnam, Billions VND Source: VIRAC, Euromonitor Retail value of coffee in the market, Source: VIRAC, Euromonitor 44

45 3. Vietnam coffee market 3.4 Consumption According to Market Intello's coffee consumption survey, Using habits of instant coffee, 2016 Types of coffee used at home, 2016 Source: VIRAC, Marketintello The habit of using roasted coffee, 2016 Source: VIRAC, Marketintello Source: VIRAC, Marketintello 45

46 Content 3 Vietnam coffee market 3.1 Classification of coffee produced in Vietnam 3.2 Process and production technology 3.3 Production 3.4 Consumption 3.5 Export Import 3.6 Price 46

47 3. Vietnam coffee market 3.5 Export Import Import Vietnam is currently importing small quantities of fresh and roasted coffee beans and ready-made coffee from China, Laos, Indonesia, Brazil, USA... Thousand bags 60kg Import of ground roasted coffee in Vietnam, 2012/ / 18e Source: VIRAC, USDA Vietnam's coffee import market by value, 2016/2017 Import structure of coffee in Vietnam, 2016 / 2017e Source: VIRAC, GDVC Source: VIRAC, USDA 47

48 3. Vietnam coffee market 3.5 Export Import Import Top coffee importing enterprises, 2016 / 2017e Some of the largest coffee importing enterprises, 2016/2017 Source: VIRAC, GDVC 48

49 3. Vietnam coffee market 3.5 Export Import Export Volume and value of Vietnamese coffee exports, 2010/ / 17e Thousand tons Millions USD Export structure of coffee by type, 2017 Source: VIRAC, Ministry of Industry and Trade, Vicofa Source: VIRAC, MOIT 49

50 3. Vietnam coffee market 3.5 Export Import Export In 2017, coffee exports reached 1.4 million tons, Million USD Monthly coffee exports, USD./ton Average export price and export volume of coffee by month, 2017 Sources: VIRAC, MARD Thousand tons Sources: VIRAC, GDVC 50

51 3. Vietnam coffee market 3.5 Export Import Export In the 2016/2017 season, Germany is the largest coffee importer of Vietnam, Structure of coffee export market by output, 2016 / 2017e Source: VIRAC, GDVC Export market structure of coffee, 2017 Source: VIRAC, GDVC 51

52 3. Vietnam coffee market 3.5 Export Import Export Top Coffee Exporting Enterprises, 2016 / 2017e Some of the largest coffee exporting enterprises, 2016/2017 Source: VIRAC, GDVC Source: VIRAC, GDVC 52

53 Content 3 Vietnam coffee market 3.1 Classification of coffee produced in Vietnam 3.2 Process and production technology 3.3 Production 3.4 Consumption 3.5 Export Import 3.6 Price 52

54 3. Vietnam coffee market 3.6 Price Domestic price: VNĐ/kg Price of domestic Robusta raw coffee, 10/ /2017 Sources VIRAC collects 54

55 3. Vietnam coffee market 3.6 Price Generally in 2017, coffee export price increased slightly in the first eight months and increased sharply in September, then fell sharply in the last three months of the year. USD/ton Coffee export price, 10/ /2017 Sources: VIRAC collects 55

56 3. Vietnam coffee market 3.6 Price The average export price of coffee to 10 markets reached the highest level in 2017 Markets Average export price in 2017 (USD/ton) Compared to 2016(%) Average export price of Dec/2017 (USD/ton) Compared to Nov/2017 (%) Compared to Dec/2016 (%) Sources: VIRAC, GDVC 56

57 3. Vietnam coffee market 3.6 Price Vietnam is the world's second largest coffee exporter with international quality standards, but its export price is only 65-85% of the coffee export price of other countries as the coffee enterprises in the country have not identified long-term business plan, and coffee is mainly sold at the beginning of the season, 57

58 3. Vietnam coffee market 3.6 Price 58

59 Content 4 Planning 7

60 4. Planning On February 2, 2012, the Prime Minister issued Decision No. 124 / QD-TTg approving the overall planning for agricultural production development to 2020 with a vision to Accordingly, the coffee plant planning as following details:. On August 21, 2012, the Ministry of Agriculture and Rural Development issued Decision No / QD-BNN-NT approving of planning for developing Vietnam's coffee industry up to 2020 with a vision to Development Goals : Planning Orientation: 60

61 4. Planning 61

62 Content 6 Prospects and forecasts 7

63 6. Prospects and forecasts Prospects 63

64 Content 7. Enterprise Analysis 64

65 Enterprises' Overview Top coffee producing enterprises of Vietnam Name Address Total assets in 2016 (Billion VND) net revenue in 2016 (Billion VND) 65

66 Enterprises' Overview INTIMEX GROUP JOINT STOCK COMPANY 66

67 Enterprises' Overview OLAM VIETNAM COMPANY LIMITED 67

68 Enterprises' Overview NESTLÉ VIET NAM COMPANY LIMITED 68

69 Enterprises' Overview PHUC SINH JOINT STOCK COMPANY 69

70 Enterprises' Overview 2-9 DAK LAK IMPORT EXPORT COMPANY LIMITED (Simexco DakLak) 70

71 Enterprises' Overview JOINT STOCK COMPANY - TIN NGHIA CORPORATION 71

72 Enterprises' Overview TRUNG NGUYEN GROUP JOINT STOCK COMPANY 72

73 Enterprises' Overview Vinacafé Bien Hoa Joint Stock Company 73

74 Enterprises' Overview Vinh Hiep Co., Ltd Minh Tien Coffee Export Import Co., Ltd 74

75 Content 7. Enterprise Analysis 7.1 Profitability 7.2 Operability 7.3 Performance efficiency 7.4 Profit Ratio 75

76 7. Enterprise Analysis 7.1 Profitability The net revenue of companies in 2016 was higher than those in 2015 and the average growth rate is 20% because of the high growth of Vietnam coffee industry in the last 3 years. Billion VND Net revenue, Source: VIRAC 76

77 7. Enterprise Analysis 7.1 Profitability In 2016, companies in the industry have gross profit growth compared to that in Therein, Trung Nguyen has the highest gross profit margin in the industry with 41.3% in Billion VND Gross profit margin, Source: VIRAC 77

78 Content 7. Enterprise Analysis 7.1 Profitability 7.2 Operability 7.3 Performance efficiency 7.4 Profit Ratio 78

79 7. Enterprise Analysis 7.2 Operability The repayment capacity of enterprises, Source: VIRAC 79

80 7. Enterprise Analysis 7.2 Operability Vinacafe Bien Hoa and Trung Nguyen are two enterprises with the highest pay ratios in the sector because they are the two enterprises that have the least loan of the top coffee businesses, they mainly use equity capital. These are also two main businesses with domestic production and supply. Pay Ratio, Source: VIRAC 80

81 Content 7. Enterprise Analysis 7.1 Profitability 7.2 Operability 7.3 Performance efficiency 7.4 Profit Ratio 81

82 7. Enterprise Analysis 7.3. Performance efficiency Total asset turnover, 2016 Phuc Sinh JSC has the largest total asset turnover with 6.22 rounds. Source: VIRAC THE CONTENT IS INTENTIONALLY REMOVED Fixed asset FOR turnover, DEMO 2016 Source: VIRAC 82

83 7. Enterprise Analysis 7.3. Performance efficiency Billion VND Financial Cost, 2016 Source: VIRAC Billion VND Enterprise Cost Managment, 2016 Source: VIRAC 83

84 Content 7. Enterprise Analysis 7.1 Profitability 7.2 Operability 7.3 Performance efficiency 7.4 Profit Ratio 84

85 7. Enterprise Analysis 7.4. Profit Ratio Profit Ratio, 2016 Source: VIRAC 85

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