Guanxi 貿易公司商業企劃書 - 政大學術集成

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(1)國立政治大學商學院國際經營管理英語碩士學位學程 International MBA Program College of Commerce National Chengchi 治 University. 大. 學. ‧ 國. 立. 政. 碩士論文. er. io. sit. y. ‧. Nat. Master’s Thesis al. n. iv. GuanxiC貿易公司商業企劃書 hengchi Un Guanxi Trading LLC Business Plan. Student: Astrid Fabiola Mejía Sánchez Advisor: Prof. Jack Wu 中華民國一百年六月 June 2011.

(2) Guanxi 貿易公司商業企劃書 Guanxi Trading LLC Business Plan 研究生：阿斯特麗指導教授：吳文傑. Student: Astrid Fabiola Mejía Sánchez Advisor: Prof. Jack Wu. 國立政治大學. 政治大商學院國際經營管理英語碩士學位學程立碩士論文 ‧. ‧ 國. 學 A Thesis. y. Nat. io. sit. Submitted to International MBA Program. er. National Chengchi University. n. a. v. in partial lfulfillment of the Requirements ni C. hengchi U. for the degree of Master in. Business Administration. 中華民國一百年六月 June 2011 i.

(3) ACKNOWLEDGEMENTS First of all, I would like to thank God for all the blessings in my life. Without him, none of this would be possible. To my dear family and to my old and new friends, who have been there for me through thick and thin; I appreciate all your love and moral support. As well, I am truly grateful to Professor Jack Wu, my advisor, and to the other Professors of the IMBA program for imparting their wisdom and for instilling us with their. 政治大 patience and kindness, with special regard to Ms. Lichi Ho for all her support. 立. entrepreneurial spirit. I would also like to thank the Administration staff for all their. ‧ 國. 學. I would also like to thank my scholarship sponsor, the International Cooperation and Development Fund (ICDF), for the opportunity they gave me to study my master’s degree. ‧. abroad in the beautiful island of Taiwan.. n. er. io. sit. y. Nat. al. Ch. engchi. ii. i Un. v.

(4) ABSTRACT Guanxi Trading LLC Business Plan By Astrid Fabiola Mejía Sánchez. 政治大 trading companies in the world. Along with other players in the international market, they 立 have significantly contributed to the expansion of trade and to the economic development Japan’s sogo shosha institutions and South Korea’s chonghap sangsa are among the top. ‧ 國. 學. of their countries.. ‧. In countries like Taiwan, Japan and Korea, trading companies were part of the driving force that propelled their global economic effort and they were an integral part of the economic. y. Nat. er. io. sit. miracles that transformed their economies forever.. International trade benefits countries by improving the living standard of the population,. n. al. Ch. i Un. v. lower prices for consumers, improved efficiency in production and a greater variety of goods.. engchi. This business plan is focused on analyzing the feasibility of Guanxi Trading LLC, an export trading (ETC) company based in Honduras, with efforts oriented toward boosting the Honduran economy by trading with Taiwan. In doing so, it intends to replicate the success of trading companies worldwide in improving the economies of their nations. By trading with Taiwan, Guanxi Trading LLC also aims to enter the rising Asian market and increase its global presence in hope of helping in the development of the Honduran economy.. iii.

(5) TABLE OF CONTENTS ACKNOWLEDGEMENTS.......................................................................................................ii ABSTRACT .............................................................................................................................iii CHAPTER I.- EXECUTIVE SUMMARY ............................................................................... 1 1.1 Statement of Purpose ...................................................................................................... 1 1.2 Background ...................................................................................................................... 1 1.3 Business Model ................................................................................................................ 2. 政治大. 1.4 Target Market................................................................................................................... 4. 立. 1.5 Financial Forecasts........................................................................................................... 4. ‧ 國. 學. CHAPTER II.- COMPANY OVERVIEW ................................................................................ 6 2.1 Company Introduction ..................................................................................................... 6. ‧. 2.2 Business/Revenue model ................................................................................................ 7. Nat. sit. y. 2.3 Service Description ....................................................................................................... 10. n. al. er. io. 2.4 Team.............................................................................................................................. 17. i Un. v. 2.5 Location ......................................................................................................................... 19. Ch. engchi. 2.6 The Opportunity ............................................................................................................ 20 2.6.1 SWOT Analysis....................................................................................................... 21 2.7 Entry and Growth Strategy ........................................................................................... 22 2.8 Competitive Advantages ............................................................................................... 24 2.9 Promotion Strategy ........................................................................................................ 25 2.10 Pricing .......................................................................................................................... 25 2.11 Logistics ....................................................................................................................... 26 2.11.1. Importing/Exporting Process to Honduras ........................................................ 26. 2.11.2. Importing/Exporting Process to Taiwan ............................................................ 30. iv.

(6) 2.11.3 Customs, Transportation, Insurance and Payment Issues ..................................... 33 CHAPTER III.- MARKET ANALYSIS AND POTENTIAL ................................................ 36 3.1 Industry Overview......................................................................................................... 36 3.2 Market Analysis and Potential ...................................................................................... 37 3.3 Role of Small and Medium Sized ETC’s in Taiwan’s Economic Transition ................ 42 3.4 Overview of FTA between Honduras, El Salvador and Taiwan ................................... 44 3.5 Background on Commercial Relations between Honduras and Taiwan ....................... 45 3.6 Competitive Environment ............................................................................................. 50. 政治大. 3.7 Target Market/Product Scope ....................................................................................... 51. 立. 3.7.1 Initial Target field: Honduran Exports to Taiwan ................................................... 51. ‧ 國. 學. 3.7.2 Initial Target field: Taiwan Exports to Honduras ................................................... 60. ‧. CHAPTER IV.- FINANCIAL PROJECTIONS ...................................................................... 68 4.1 Initial Capital Requirements .......................................................................................... 68. y. Nat. io. sit. 4.2 Projected Income Statement .......................................................................................... 70. n. al. er. 4.3 Projected Balance Sheet ................................................................................................. 76. Ch. i Un. v. 4.4 Projected Cash Flow ...................................................................................................... 78. engchi. 4.5 Business Ratios .............................................................................................................. 79 CHAPTER V. – RISK ASSESSMENT .................................................................................. 82 CHAPTER VI.- CONCLUSION ............................................................................................. 85 CHAPTER VII.- BIBLIOGRAPHY ....................................................................................... 86 CHAPTER VIII.- APPENDIX ................................................................................................ 90. v.

(7) Tables and Figures Table 1: Selected Indicators of Taiwan’s Economy, 1952-96.............................................. 40 Table 2: Indicators of Structural Changes ............................................................................ 42 Table 3: Trade Balance with Taiwan .................................................................................... 45 Table 4: Top 25 Exports from Honduras to Taiwan ............................................................. 46 Table 5: Top 25 Imports by Honduras from Taiwan ............................................................ 47 Table 6: Honduras’ Coffee Exports ...................................................................................... 52 Table 7: Coffee sales breakdown.......................................................................................... 54 Table 8: Taiwan’s Cigar Imports .......................................................................................... 55 Table 9: Cigar sales breakdown............................................................................................ 57 Table 10: Taiwan’s Cocoa Imports ...................................................................................... 58 Table 11: Cocoa sales breakdown ........................................................................................ 59 Table 12: Cup-sealing machine sales breakdown................................................................. 61 Table 13: Scooter sales breakdown ...................................................................................... 63 Table 14: Honduras’ TV Imports ......................................................................................... 65 Table 15: LCDs sales breakdown ......................................................................................... 65 Table 16: Honduras’ Laptop Imports ................................................................................... 66 Table 17: Laptop sales breakdown ....................................................................................... 67 Table 18: Initial Capital Requirements ................................................................................. 69. 立. 政治大. ‧. ‧ 國. 學. sit. y. Nat. n. al. er. io. Table 19: Sales and Profit Distribution ................................................................................ 71 Table 20: Pro Forma Income Statement ............................................................................... 72 Table 21: Annual Staff Payments ......................................................................................... 73 Table 22: Depreciation Calculation ...................................................................................... 74 Table 23: Pro Forma Balance Sheet ..................................................................................... 77 Table 24: Pro Forma Cash Flow ........................................................................................... 78 Table 25: Payback Period ..................................................................................................... 79 Table 26: Ratios .................................................................................................................... 80 Table 27: Net Present Value ................................................................................................. 82 Table 28: Breakdown of Wages for 2012-2014 ................................................................... 90. Ch. engchi. i Un. v. Figure 1: SWOT Analysis .................................................................................................... 21 Figure 2: Basic Process Diagram.......................................................................................... 26 Figure 3: Porter’s Five Forces .............................................................................................. 36. vi.

(8) CHAPTER I.- EXECUTIVE SUMMARY. 1.1 Statement of Purpose This business plan has been developed in order to evaluate the feasibility for the start-up of an export trading company based in Honduras, Guanxi Trading LLC. The present will also serve as an operational framework and plan for the first three years that the company will be in business.. 政治大. To achieve this objective, a partnership will be formed, where the two founding. 立. entrepreneurs need a start-up capital of US$58,211 which will be provided jointly in equal. ‧ 國. 學. parts by the two founding partners.. This business plan will also serve to demonstrate the enormous potential that there is for. ‧. trading between Honduras and Taiwan.. er. io. sit. y. Nat 1.2 Background. al. n. iv n C U all the competitiveness that takes h eembrace Globalization is a reality and we must n g c hit. iWith place in the local markets, companies must look for other alternatives. Trade exists because one group or country has a supply of some commodity or merchandise that is in demand by another.1 International trade offers a window of opportunities for companies and many of them are overlooked. The reality is that most small to medium sized companies are not exporting their products. This may be due to lack of overseas market knowledge, fear of the whole export process, lack of financial means, etc.. 1. How to Start an Import/Export Business. www.entrepreneur.com. 1.

(9) The international trade industry is very susceptible to economic downturns. The risks involved in international trade are high, and not every company is able to manage the deal effectively. Imports are just as important as exports for growth and job creation. Honduras must open its doors to the world; show the international community what it has to offer and at the same time, look for viable ways to boost its economy. That is where Guanxi Trading LLC comes into play. We aim to help companies export and import products between Taiwan and Honduras. In other words, we are taking a piece of Honduras to the Asian market, and bringing a piece of Asia to Honduras.. 政治大 countries produce goods more efficiently than others, and thus citizens should be able to 立 According to the absolute advantage theory which supports free trade among markets,. buy cheaper products from abroad. Companies in Taiwan may have what companies in. ‧ 國. 學. Honduras need to improve their services or products, and vice-versa, or at a much lower cost and Guanxi Trading LLC helps these companies exploit these opportunities and. ‧. minimize threats.. y. Nat. sit. Only firms that are not in liquidity constraints are bound to immerse themselves into the. al. er. io. international arena. But this is not the only problem for small and medium business in. v. n. Honduras; they also lack the technical knowledge for handling the hassles that are involved for exporting and importing.. Ch. engchi. i Un. The idea of Guanxi Trading LLC arose due to the founder’s recognition of this opportunity gap between Honduras and Taiwan; there is no single company that is dedicated to trading between these two countries and the Free Trade Agreement (FTA) signed between the two countries provides a world of trade opportunities among them.. 1.3 Business Model Guanxi Trading LLC will be a facilitator of export and import needs of small and medium sized companies in Honduras and Taiwan. We will be the intermediary between buyers and. 2.

(10) suppliers and will provide all the necessary arrangements for getting their desired products across from one point to the other.. Simply stated, we find the product that buyers need from overseas; we purchase it and then ship it abroad. We take title to the goods that we import and the income we receive is the trading margin, which is the difference between the manufacturer’s selling price and the price we offer it at.. To facilitate buyers in their search for products from the foreign market, we will have a. 治政 we receive the quote request, we’ll contact our supplier大 for lead times and additional details. 立a specific product not found on our catalog, they can make Additionally, if a buyer needs website through which buyers will send quote requests on our selection of products. Once. ‧ 國. 學. the request and our team of experts will find an adequate supplier to meet their needs.. ‧. We’ll be the immediate contact of the suppliers and buyers we work with. In other words, there are no direct transactions between suppliers and buyers. Once the order has been. y. Nat. sit. placed by the buyer, depending on the credit terms we have provided the buyer with, an. al. n. account.. er. io. advance payment will be demanded from the buyer which will be passed to our local bank. Ch. engchi. i Un. v. Later, part of this payment will be transferred to our overseas office for subsequent payment to the supplier, if our supplier demands advanced payment. A payment agreement will be issued from the buyer to our behalf for the rest of the payment.. Since our local office makes the purchase and takes title to the goods, we will ship directly to the foreign port, where immediately after it is cleared for customs, the product will be invoiced again by us and then sent to the buyer.. Once the buyer has approved the receipt of the goods, we receive the rest of the payment to our account and then we will make the final payment to our supplier.. 3.

(11) Guanxi Trading LLC will be both demand and supply driven. As supply driven, we will help manufacturers and producers who wish to sell their products abroad. As demand driven, we will help buyers locate overseas the products they wish to purchase. Because of the nature of our business, bootstrapping will be part of our business model, where we will to the greatest degree minimize our investments. For this, to pay our suppliers we will use the cash paid in advance by our customers and to the least extent use our own capital funds.. 1.4 Target Market. 立. 政治大. As mentioned, Guanxi Trading LLC will start operations in trading products between. ‧ 國. 學. Honduras and Taiwan. It will initially operate with two offices; one in San Pedro Sula, Honduras and the other one will be located in Taipei, Taiwan.. ‧. y. Nat. Guanxi Trading LLC will start by exporting coffee and coffee related products, tobacco and. sit. tobacco related products and cocoa and cocoa preparations from Honduras to Taiwan.. n. al. er. io. From Taiwan to Honduras, we will initially start trading cup-sealing machines, scooters and entertainment devices.. Ch. engchi. i Un. v. Therefore, the initial target market in Honduras will be distributors of electronics, motorcycles and food and beverage equipment. The initial target market in Taiwan will be distributors and factories in need of the raw materials and finished goods we export, such as coffee roasters and producers of coffee and cocoa related products.. 1.5 Financial Forecasts The financial forecasts show that Guanxi Trading LLC is a feasible start-up company with high potential for growth and success within the international trade industry in Taiwan and. 4.

(12) Honduras. It is estimated that the start-up will be profitable by the six month of the first year of operations. Due to the difficulty of being granted a bank loan for start-up companies in this industry, a short-term line of credit will be requested until later in the year, in addition to a small amount in the second year. Net profits are forecasted to increase by 18% and 36% for the second and third year, respectively. Starting from the first year, 20% of profits will be paid to each investor and the rest, 60%, will be reinvested in the company for future growth and expansion.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 5. i Un. v.

(13) CHAPTER II.- COMPANY OVERVIEW. 2.1 Company Introduction Guanxi Trading LLC is an export trading company that is scheduled to begin operations on January 1, 2012. Guanxi Trading LLC will be a limited liability company based in Honduras. It will be incorporated in Honduras as Empresa Comercializadora Guanxi, S. de R.L. and it will be established as a partnership.. 政治大. Additionally, a branch office will be established in Taipei, Taiwan in order for us to be in. 立. direct contact with suppliers as well as to serve those local companies who wish to import. ‧ 國. 學. goods from Honduras.. ‧. As an export trading company, we have to abide by the Law of Distribution Representatives and Agents of National and International Companies in Honduras and by. y. Nat. sit. the regulations of the Taiwan International Trade Commission Ministry. These laws aim to. al. er. io. regulate the commercial and contractual relations established between local and foreign. n. companies and the natural or legal persons engaged in representing them in the country, or. Ch. i Un. v. in charge of distributing their products or placing the purchase orders for their products, in. engchi. addition to guaranteeing favorable conditions to the consumers.. According to Law of Distribution Representatives and Agents of National and International Companies in Honduras, it is required to hold a license for executing trade transactions. For this, the following documents must accompany the application form: . Power conferred by a member of the Honduran Bar Association. . Certification of Sole Trader by the Commercial Registry. . Registration record from the Chamber of Commerce, as well as solvency record of fee payments. 6.

(14) . Payment records of income tax, municipal and National Tax Registry. . Photocopy of the company’s incorporation documents. Establishing a branch office in Taiwan subjects the head office in Honduras to the jurisdiction of the Taiwan courts. The other founding partner will be appointed as designated agent and branch manager.. The Department of Commerce of Ministry of Economic Affairs (MOEA) reviews. 治政大 7 to 9 weeks. Additionally, Registration of a branch office in Taiwan takes around 立 importing and exporting licenses must be issued by the Bureau of Foreign Trade (BOFT). applications for company registration of branches of foreign companies in Taiwan.. ‧ 國. 學. and the business entity must comply with the Statute for Investment by Foreign Nationals.. ‧. There is no minimum requirement for establishing the branch office, but the capital still needs to be examined and certified by a local Certified Public Accountant (CPA) and cover. y. Nat. n. er. io. al. sit. at least the incorporation cost.. Ch 2.2 Business/Revenue model. engchi. i Un. v. With globalization nowadays, people need to think outside their comfort zone and seek new opportunities elsewhere. That’s where Guanxi Trading LLC can help: we will help bridge the trade process between Honduras and Taiwan.. Guanxi Trading LLC will help buyers in their search for their desired product overseas. Once we have found a suitable and reliable partner, we will purchase the products and ship them off to the foreign country, where we will finally deliver the products to the buyer.. 7.

(15) We are a market oriented company; thus, we organize ourselves and our activities according to the needs of the host countries; in this case, Honduras and Taiwan, rather than focusing on a single line of products. Because of the difference in languages between both countries, and being that most small to medium business owners are not proficient in the English language, much less in Mandarin Chinese or in the other hand Spanish, Guanxi Trading LLC is the suitable business partner for handling a company’s business abroad.. Guanxi Trading LLC enables companies to enter new markets with their most competitive. 治政大 they can take advantage of the therefore, increasing their sales. With this increased demand, 立 economies of scale in production. products. With this, we give suppliers the chance to exploit other business opportunities. ‧ 國. 學. By working with us, producers and manufacturers also benefit from our networks, as well. ‧. as from our expertise in areas such as finance, technology, logistics and procurement, marketing and legal affairs.. sit. y. Nat. On the other hand, the buyers we work with get full reassurance that their products will be. io. n. al. er. in compliance with the agreed terms of quality and delivery. We serve as a one-stop. i Un. v. shopping facility, searching hastily for the client’s desired merchandise. We will prove to. Ch. engchi. customers the tradeoff between purchasing through us and them handling all the tedious and costly business transactions themselves.. Our business model will be focused on bootstrapping, which will focus to the greatest extent possible to use other people’s resources, for example, from the advanced payment received from our customers, we will use this to pay the suppliers whenever advanced payment is demanded.. With focus on maximizing the value of our service offering, our business model will depend tremendously on an online collaboration platform that brings us together with potential and recurrent buyers who wish to purchase products in Taiwan or Honduras. This. 8.

(16) is done through Private Technology Exchange (PTX), which is an online model that permits execution of trade transactions and information sharing regarding products, demand, availability, etc. Detailed Process: 1.. When a buyer spots a product from our online catalog, he creates an online account. in our website. 2.. He then selects the quantity from our pre-established quantity lots, which were. established in conjunction with our suppliers. 3.. If the client needs any additional requirements, he can let us know through our. 政治大 After the quote request 立is issued, an automatic confirmation is sent to the buyer and. webpage or contact us directly. 4.. ‧ 國. 學. to our team of executives. 5.. We immediately look over the order and contact the supplier to know availability.. 6.. We contact our network of shipping lines and later let the buyer know the estimated. ‧. departure date, lead time, shipping arrangements, payment details, etc. If approved by the buyer, we go ahead and process the transaction. Partial payment. sit. y. Nat. 7.. io. future.. n. al. er. will be required in advance from our buyers and their credit terms will be revised in the. 8.. i Un. v. We purchase the product locally and then handle all the shipping arrangements for. Ch. engchi. sending the products to the foreign country. Payments to our suppliers will be executed through local bank transfers. 9.. As importers, we then coordinate with our customs agent the receipt of the goods.. 10.. After the goods have been cleared from customs, we issue another invoice and. coordinate the final delivery of the goods to the buyer.. All new buyers will be required to make payments in advance. Later, depending on the purchase volume, credit risk and payment behavior; we can change the buyer’s payment terms to a period which is favorable for us and accepted by our supplier.. 9.

(17) Our website will also provide a tracking service, so customers can see at any time the status of their order. As well, a payment tracking service will also be available on our website so buyers easily have access to an up-to-date balance of their account.. Guanxi Trading LLC seeks to reduce transaction costs through economies of scale and in making the most efficient use of our capital and of that of our customers. For this, we will work on seeking exclusivity based agreements with manufacturers in order to obtain a secure position in the foreign market.. 2.3 Service Description. 立. 政治大. An export trading company is an entity that manages the trading process for a third party.. ‧ 國. 學. However, Guanxi Trading LLC will be more than an export trading company. We aim to be facilitators. We plan to be the most reliable, outsourcing solution to handle a company’s. ‧. trading needs. We will offer a wide array of services to save time and effort for companies. sit. y. Nat. doing business abroad.. er. io. By purchasing locally, we take advantage of favorable pricing; and because we handle the. al. n. iv n C fact that we take title of the goods, we the risk and responsibility for the goods h ealson assume gchi U. flow of the products, we are able to have a better control of the trading process. Due to the. we export, which removes all risk from the suppliers and buyers and thus, facilitate their international business transactions.. Among the most frequent mistakes made by new exporters, we can include failure to get qualified export counseling, handling and covering all the legal and insurance requirements, selecting the right overseas agents or distributors, lack of knowledge of the foreign market, among others. These factors makes them unaware of any needed product modifications to meet the other culture’s preferences and regulations, as well as failure to print labels and warranty messages in locally understood language, thus failing to accurately cater to the foreign market.. 10.

(18) Although there are many public and private organizations in Honduras and Taiwan which are destined to aid small producers to export their products and helping producers to increase their exports, most of them only provide market information and guidance on the initial steps of the process, yet companies are left to handle the rest by themselves. However, Guanxi Trading LLC will enable suppliers to avoid this due to us handling all the export procedures.. With this in mind, Guanxi Trading LLC will offer the following services: -. International sales force: We will aid buyers and suppliers to meet their import/export. -. 治政 Market information: We will provide the most up大 to date information on the foreign 立 market and industry.. -. Overseeing marking and packaging: We will aid suppliers to prepare the necessary. needs.. ‧ 國. 學. labeling requirements for the products destined to the overseas market.. ‧. -. Marketing mix: We will assist and support with the promotion strategies in the. sit. y. Nat. overseas market.. er. io. By doing business through us, buyers and suppliers will avoid the hassle that is involved in. al. n. iv n C procedures of logistic coordination in U across to the foreign market: h order i product e n gto cgeththe. international trade. Because we take control of the goods, we will handle the following. -. Legal requirements and documentation: We will assess all the requirements and regulations to deliver the products with ease.. -. Quality Control and Shipping: We will determine the best shipping method for the products and follow the complete process until the merchandise reaches its destination.. -. Distribution and Warehousing. International sales force. 11.

(19) Guanxi Trading LLC will bring together international buyers and sellers. We already have an extensive knowledge of suppliers in both countries and we will continually search for opportunities in each region based on any demand and supply gaps we perceive.. We will aid in finding overseas buyers for the products of the small and medium companies we work with, who in most cases, don’t have the capability to market and retain distribution channels abroad.. As well, we will handle the negotiation of the commercial terms and allocation of the order. 政治大. of the goods to reliable and adequate suppliers in order to find the best price/quality ratio for our buyers.. 立. ‧ 國. 學. Claims and after-sale services will also be managed through us. Because credibility and reputation needs to be the basis of our business, we will ensure quality in our work and. ‧. take all the necessary precautions to make sure things run smoothly. However, due to the nature of our business, unexpected events and situations out of our control may arise, but. y. Nat. al. er. io. sit. we will make sure all claims are dealt with quickly and efficiently.. v. n. As mentioned, we will do our utmost to build long-lasting relationships with our customers.. Ch. i Un. We guarantee to handle the necessary arrangements for after-sale services which include quality complaints, returns, etc.. engchi. In addition, we will work closely with manufacturing companies in order to transform a buyer’s prototype or design into a sample that meets the buyer’s specifications.. Market information. One of our main roles will be to spot business trends and opportunities in both markets. We will regularly attend trade shows to be up-to-date with the latest trends in products. By doing so, we will also be in constant contact with suppliers and be seeking for new ones.. 12.

(20) We will also collect information on potential customers and assess their reliability. As well, we will regularly visit suppliers in order to cultivate a close relationship. Through this, we will also obtain the latest samples of their newest merchandises.. At Guanxi Trading LLC we will also focus our efforts on collecting information regarding the economy, culture and political aspects of the markets we do business in, as well as product prices, market demand and supply conditions, shipping data and other relevant information in order to minimize risks and provide market trend information to the suppliers we work with.. 治政大will be at the forefront of Guanxi Information collection, diffusion and data analysis tools 立 Trading LLC’s development. ‧ 國. 學 ‧. Overseeing marking and packaging. y. Nat. sit. Because each country has different regulations concerning consumer products, we will. al. er. io. assist the manufacturer to make the necessary product or packaging adaptations needed to. v. n. meet the overseas market requirements or preferences. We will continuously inform. Ch. i Un. manufacturers and producers about new technical developments and packaging method requirements in the foreign country.. engchi. Marketing mix We will focus on the marketing and sales aspects of our suppliers’ products through our extensive network. Through this, we will ensure that the products are well known across the market and therefore increase the product’s salability.. We will also act as advisers to our suppliers in order to receive the best quality, pricing and after-sales service for their products, thus increasing our chances for success in the overseas. 13.

(21) market, and therefore creating a mutually beneficial relationship. By working closely with our suppliers, we will ensure a better working relationship; therefore, avoiding any conflict or potential rivalry between us.. When buyers purchase through us, they will avoid the hassle of having to deal with a supplier from overseas. Same goes for a supplier, since they avoid any non-payment risks and still get a sales increase because Guanxi Trading LLC will assume the risk of nonpayment with foreign companies. Suppliers also avoid the difficulty of having to handle the shipping arrangements.. 治政大 aspects of the cycle is the In international trading, one of the main and most complicated 立 one place to another. Thus, by working with us, suppliers transportation of the goods from ‧ 國. 學. and buyers avoid the need of having to make these arrangements by themselves.. ‧. Guanxi Trading LLC will handle the following business operations:. sit. y. Nat. n. al. er. io. Legal requirements and documentation. Ch. i Un. v. Because time is money, Guanxi Trading LLC helps customers save both by taking care of. engchi. all the export documentation needed to get the goods from one country to the other. We take care of all the legal requirements needed for a company’s goods to be exported from one place to another.. Among our tasks, we prepare: -. Export license: legal document which allows products to be shipped.. -. Commercial invoice: bill for the goods from the seller to the buyer.. -. Bill of Lading: contract between the buyer of the goods and the carrier.. -. Consular invoice: detailed statement of goods shipped certified by the consul at the point of shipment. 14.

(22) -. Certificate of origin: a document containing an affidavit to prove the origin of imported good and which is used to support the tariff treatment claimed. -. Shipper’s Export Declaration: a form required for all shipments, prepared by the shipper, in this case, us, indicating the value, weight, destination, and other basic information about an export shipment. -. Export Packing List: specifies the material in each individual package and indicates the type of package, as well as the individual net and gross weights and measurements for each package. 政治大. This way, the suppliers don't have to issue export documents; Guanxi Trading LLC will issue those.. 立. ‧ 國. 學. Quality Control and Shipping. ‧. y. Nat. One of our main functions is to help small and medium companies reduce transaction costs.. sit. Therefore, we will work as architects of transport and work closely with freight forwarders. n. al. er. io. and shipping companies to deal with the movement of goods from one country to another. i Un. v. in order to select the best method of transportation in relation of cost, time and quality of service.. Ch. engchi. By bundling the products of our suppliers, we will be able to achieve lower shipping costs and thus, keeping products with competitive pricing, which is beneficial to all parties involved. And because we will handle all the export documentation required, we will save our buyers and suppliers tremendous amount of time and effort.. Our trusted network of partners includes: . Odyssey International Co., LTD. . Sercogua Honduras, S.A.. . Transportes Consolidados, S.A. 15.

(23) . Maersk Line. . Evergreen Marine Corp.. . Local postal offices: This will be used for small shipments, generally for samples sent from one place to another.. . DHL. . UPS. Odyssey International Co, LTD is a cargo consolidator in Asia which has offices in Taipei and offer services from Asia to Central America. Sercogua Honduras S.A. is Odyssey. 政治大 we can obtain better pricing and also form a strong working relationship. 立. International Co. LTD partner agent in Honduras. By handling all shipments through them,. ‧ 國. 學. As an alternate cargo consolidator we can use the services of Transportes Consolidados, S.A. and in emergencies, use the services of large shipping lines such as Maersk Line and. ‧. Evergreen Marine Corp.. y. Nat. al. er. io. the best option since better pricing can be obtained.. sit. Because we initially start with a moderate flow of goods, seeking a cargo consolidator is. n. iv n C Depending on the size, weight, delivery h e ntime h i U and shelf life of the goods being g crequired transported, we will consult with our network of reliable freight forwarders in order to get the best pricing options and delivery time to meet our customer’s needs.. By handling the shipping arrangements ourselves, we are able to closely follow up on our customer’s orders, give them timely feedback and avoid any delays in delivery which might be produced if every supplier handles their own shipments.. Aside from handling shipping arrangements, we will provide quality inspections prior to shipping in order to ensure that the manufacturer’s products and packaging meet the quality and specifications previously agreed which match the buyer’s standards.. 16.

(24) When sales and thus, shipments increase, Maersk Line and Evergreen Marine Corp. will be considered as first options for overseas transportation since full container loads will be needed.. Distribution and Warehousing. Guanxi Trading LLC will focus on more than just doing one-time sales. We contemplate doing long-term business with our customers. As part of our strategy, we will carefully. 治政大 suppliers to ensure good quality of work. 立. choose the appropriate product and market to trade, and we will carefully choose our. ‧ 國. 學. We will have a well-designed process of delivery service to our customers, which consists of transportations services and location of warehouses to control the delivery of goods. For. ‧. this, we search for warehousing solutions for short-term storage of the goods being transported. This is part of our post-sales services after the products have arrived to their. y. Nat. er. io. al. sit. destination and have been cleared in customs.. v. n. All of our services and arrangements with our customers and suppliers will be pointed out. Ch. i Un. in a memorandum of understanding (MOU) in order to avoid any discrepancies along the. engchi. business process. This will be useful in clarifying matters and avoiding misunderstandings afterwards.. However, due to the nature of the business, unexpected events may occur, so constant communication with the other party will be greatly enforced.. 2.4 Team Founders & Management. 17.

(25) As mentioned, Guanxi Trading LLC will be a private company, arising from the entrepreneurial effort of its founders. Astrid Mejía, being a Honduran citizen and knowledgeable of the Honduras market, will be in charge of the Honduran office. However, we are still in the lookout for a suitable partner, ideally a Taiwanese citizen, who will be based in Taiwan to handle the Taiwanese market. As founders and head of offices, they will ensure that everything can keep itself on track and ensure the business runs smoothly. The founders will handle the marketing and sales aspects of the business. They will be in charge of identifying potential buyers and suppliers, approaching them and learning about their needs and policies, and thus, getting more. 政治大. business. And so, they will be responsible for maintaining and updating the data base of customers and suppliers.. 立. ‧ 國. 學. They will also handle vendor relations and vendor development, negotiating business terms such as price, quality control, delivery date, and after-sales service according to the buyer’s. ‧. needs and standards.. y. Nat. sit. They also will be well informed and will be kept up-to-date with their particular country’s. n. al. er. io. economies, policies, culture, etc. and regularly share with each other this information.. Key Operating Executives. Ch. engchi. i Un. v. These positions constitute the backbone of our business. The main duties and responsibilities include handing legal and export documentation, arranging shipping, warehousing, insurance, payment follow-up, among others. Without the proper care and handling of these duties, our business can be severely scarred.. Our staff has extensive experience in international trade and therefore, understands how to manage cultural differences in business practices.. 18.

(26) Due to the nature of our business, we rely heavily on our staff. Because we won’t have many fixed assets to offer as collateral, we are very dependent on our staff’s skills and expertise, as well on our company’s reputation and track record, so our key focus will be to hire and retain the best in the market.. Initially, we will start with 2 Key Operating Executives; one for each office.. Accounting Specialist This will be a full-time position in which the person will handle the duties of all the. 政治大 bank accounts, verify the accuracy of invoices and other accounting documents or records, 立 update and maintain accounting journals, ledgers and other records detailing financial business transactions and handle the company’s payroll.. 學. ‧ 國. accounting procedures of the headquarters. Among the assigned tasks will be: to reconcile. ‧. The head of the Taipei branch will also be in charge of the accounting procedures of the. y. sit. io. er. finances.. Nat. branch office and will work closely with the Accounting Specialist for reconciliation of the. al. n. iv n C Additionally, we will outsource ourhcleaning services, e n g c h i Utransportation, customs brokerage,. Initially, there will be a total of 5 full-time employees in Guanxi Trading LLC.. and legal services for each office.. 2.5 Location Guanxi Trading LLC will start operations with two offices; one in San Pedro Sula, Honduras, which is the industrial capital of Honduras; and the other one in Taipei, Taiwan. San Pedro Sula is the ideal place to establish the office in Honduras because it is very close to the Port of Puerto Cortés, the main seaport in Honduras. The other office will be a branch located in Taipei, a short distance from the Keelung Port.. 19.

(27) The rented office in Honduras will be a few minutes away from the seaport, enabling faster communication and faster transactions. Initially, the branch office will be located near the Taipei World Trade Center (TWTC), which is at the heart of Taipei’s bustling business district. This rented office space is ideal because it is in the same area where the Central American Trade Office (CATO) and Taiwan External Trade Development Council (TAITRA) are located, facilitating communication and cooperation among us. Both of these entities focus on trade development and promotion of Taiwan.. 治政 sent abroad. With this, hands-on follow-up will be大 made to the trade process, thus 立our customers. delivering a better service for Both offices will be in charge of managing the import and export process of the products. ‧ 國. 學. By having offices in both countries, we will be able to obtain better prices and commercial. ‧. terms for our customers, as well as obtaining faster and more reliable credit information on buyers located in both countries and enabling us to form good working relationships with. y. Nat. sit. buyers and suppliers. Being close to our customers and suppliers will enable us to work. n. al. er. io. closely together and provide a better service to meet their needs.. 2.6 The Opportunity. Ch. engchi. i Un. v. The Free Trade Agreement (FTA) between Honduras, El Salvador and Taiwan provides a world of opportunities for trading between Honduras and Taiwan. Preferential treatment has been granted to products from both countries, thus enhancing their competitiveness in the foreign market.. Being that there is no company focused solely on the Honduran and Taiwanese markets, Guanxi Trading LLC will be the first of its kind. By providing complete import and export solutions to buyers and suppliers, Guanxi Trading LLC will be the indispensable business. 20.

(28) partner of small and medium Honduran and Taiwanese companies wishing to expand their markets in the foreign country. Considering the structure of Honduras and Taiwan’s economies, we can acknowledge that the goods offered by each country are quite diverse, which implicates high degrees of complementarities between both economies. Taiwan could be an important source of inputs for the production of industrial goods and of finished products. At the same time, Honduras could become a top supplier of agro industrial products for Taiwan, as well as an even bigger receiver of foreign direct investment from Taiwan.. 立. 學. ‧ 國. 2.6.1 SWOT Analysis. 政治大. Figure 1: SWOT Analysis. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. 21. i Un. v.

(29) 2.7 Entry and Growth Strategy As mentioned, we will run a start-up business in the Honduran and Taiwanese markets. Initially, we will start working with a few product categories, which we have identified to have great potential in the overseas market.. Guanxi Trading LLC will enter into talks with FIDE, which is a non-profit, private institution that was created over 20 years ago to promote investment in Honduras. FIDE also provides assistance with the development of exports. FIDE works hand-to-hand with. 政治大 legislation leading to improve the business climate in Honduras. 立. the Government and other private institutions for the promotion and development of a new. ‧ 國. 學. FIDE manages a program called Honduras Does Export, which provides technical and commercial assessment to current and potential exporters of Honduras. Their objective is to. ‧. accompany Honduran businesses in the export process, providing relevant information for. y. Nat. decision making and guiding them during their search for international markets. Working. er. io. buyers.. sit. close to FIDE will enable us to be in constant communication with new exporters and. al. n. iv n C organization that aim to work closely h ewenwill gchi U. Another important. with is the Central. American Trade Office (CATO), located in Taipei, Taiwan. This organization was established in 1997 with the aim of promoting and enhancing bilateral relations, business cooperation and investment development between Taiwan and its diplomatic allies in Central America.. As well, we aim to work closely with the Government of both countries in order to assist in developing and implementing the country’s trading objectives and assessing its feasibility. In further ventures, we will propose and aim to get Government imports to be channeled through us, working as agents.. 22.

(30) Additionally, we will make our best efforts to maintain healthy, continuous relationships with other Government agencies, such as embassies, chambers of commerce, export promoters, product associations, etc. and seek for their constant support on behalf of our customers. Also, we will seek for their support in providing information about the role of trading companies in order to promote confidence and remove misconceptions that small producers may have about letting a third party handle their export business.. As well, we will be in constant contact with the Government to be informed of relevant events and trade fairs, in addition to promoting workshops for information sessions and as a. 治政 encouraging exports of small and medium companies. 大立. way of reassuring small companies that a trading company is a cost-effective way of. ‧ 國. 學. However, uncertainty arises in terms of the extent to how Government institutions are willing and able to help, especially in areas such as funding and simplification of processes.. ‧. As our business grows, both offices, in Honduras and Taiwan, will have a showroom in. y. Nat. n. al. er. io. producers.. sit. order for our clients to take a closer look at the top-products offered by each country’s. Ch. i Un. v. First we will focus on building long-lasting relationships with our supplier and buyers, and. engchi. in expanding our product offering. Once we have accumulated enough capital, expanded our networks and built up trust and reputation in the international market, we plan to expand to other Asian markets, starting with South Korea and Mainland China, as well, to other Latin American countries, initially with our neighbors in Central America.. Guanxi Trading LLC will also focus on continuous market search for eco-friendly products to export to Honduras in order to aid in boosting an environmentally friendly mentality among the population.. Taiwanese producers are known for their OEM services, thus, another strategy worth looking out for is the possibility of developing our own brands of products and penetrating. 23.

(31) international markets by ourselves. This can be accomplished once we have expanded our networks even further and have enough capital and expertise to carry out this strategy.. 2.8 Competitive Advantages. 政治大. Guanxi Trading LLC will create value to its customers by providing the services that most companies lack knowledge in or don’t have the necessary tools and facilities to execute by. 立. themselves.. ‧ 國. 學. Because we will aim to quickly lay the groundwork in the foreign market, we will aim to. ‧. have an extensive network by which buyers can benefit from by having faster, quality products at a competitive price. Suppliers benefit from an increase in sales and avoidance. y. Nat. al. er. io. sit. of having to handle the shipping process and risk of non-payment from buyers.. n. Suppliers will incur in fewer costs and less time and efforts needed in order to build their. Ch. i Un. v. international presence. Suppliers will also benefit from our expertise and avoid the. engchi. difficulties that may arise in their attempt to crack into the foreign market by themselves and in overcoming language and cultural barriers. Because we won’t be a typical trading company, we will provide customers with other services, such as providing our suppliers with updated information on market trends through which we will be able to establish and maintain a close relationship, therefore ensuring supply of products that meet the buyer’s needs. For our buyers’ sake, we will avoid them the hassle of having to find a reliable supplier for their needed product and we avoid them the trouble of the whole shipping process.. 24.

(32) Because Guanxi Trading LLC will start off as a small company, we will be able to provide fast response to events presented unexpectedly, have low overhead costs, more flexibility, and customizable services with personalized attention that most big companies are not able to provide. Fair practices will be the basis of our company culture. In order to reinforce a mutually beneficial, long-term relationship with our manufacturers and gain their trust, as is needed in any business transaction, especially in Taiwanese networks, we will maintain an open and transparent policy as a way to avoid any inconvenience among our customers and suppliers. We will abide by transparency, trust, openness and fair play and so, we equally. 政治大. expect our customers to do the same.. 學. ‧ 國. 立 2.9 Promotion Strategy. ‧. As mentioned before, we will strive to regularly attend international trade shows in order to. io. y. er. and through this, build brand recognition among the industry.. sit. Nat. promote ourselves among the wide array of suppliers and buyers that attend these events. al. n. iv n C Honduras and Taiwan, as they arehwidely distributed e n g c h i Uand targeted to our market niche.. As well, we will advertise in local import and export trade magazines and online portals in. Through this, we can penetrate and promote ourselves directly and effectively into our selected markets.. 2.10 Pricing Guanxi Trading LLC will act as agents in the supply chain, and thus, the profit we receive is based on the trading margin, which is the difference between the manufacturer’s selling price plus the freight charges and the price we offer it at. This will usually be around 6 – 15% over the total costs per unit, but will also depend on the market price of the good, being that we still want to maintain a competitive price to pass on to the buyer. The shifting 25.

(33) of coffee and cocoa prices are largely determined by the supply/demand of the market, and thus are the most fluctuating of all of our initial trade offerings.. We anticipate price increases of around 5% for every product category each year, taking into account inflation and currency exchange fluctuations.. 2.11 Logistics Guanxi Trading LLC will focus on importing and exporting products between Honduras. 政治大. and Taiwan with high appeal and salability and we will handle all the transactions from supplier to buyer.. 立. ‧ 國. 學. Our basic process is shown in the following diagram: Figure 2: Basic Process Diagram. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. i Un. v. In the following section, we cover basic importing/exporting requirements for each country.. 2.11.1 Importing/Exporting Process to Honduras 26.

(34) Honduras is a resource-scarce economy in some areas, therefore it is necessary to import raw materials and other goods which it lacks, and it exports primarily agricultural products. However, it must export finished products in order to accumulate enough foreign exchange and boost the economic development of the country. However, it does have some natural advantages over Taiwan in producing certain goods due to its climatic conditions and land distribution.. Honduras, as is the case of Taiwan, is a well-respected trade partner. Both are members of. 治政大 against them on the WTO’s disputes by country. 立. the World Trade Organization (WTO) and neither of them have direct complaints listed 2. ‧ 國. 學. As an initial step to start an importing/exporting company in Honduras, you need to be legally constituted and then proceed to issue an importing/exporting license, which is. Nat. sit. y. ‧. issued by the Center for Export Procedures (CENTREX).. er. io. Importing Process in Honduras. al. n. iv n C In Honduras, the import proceduresh are handled by theUGeneral Directorate of Regulations engchi and Institutional Development, along with the General Directorate of Public Health and the Service for Agricultural and Livestock Health (SENASA).. The intervention from a customs broker is required when CIF imports exceed US$1000 in value. To execute an import transaction, the importer must present a declaration for each shipment received, including the class, quality, details of the merchandise, and including the following documents: 2. Disputes by Country/Territory. World Trade Organization. [online] Available:. http://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm. 27.

(35) . Bill of lading or equivalent document. . Commercial invoice. . Declaration of customs value. . Single customs declaration or import policy. . Certificate of origin. . Phytosanitary certificate: for products of vegetable origin. . Zoosanitary certificate: for products of animal origin. 政治大 working day. Once it has been approved, the importer has four working days to remove the 立. The Customs Administration has the obligation to review the import request within one. merchandise from the customs custody. There is a possibility to request for immediate. ‧ 國. 學. withdrawal in the case for perishable products, live animals or press material.. ‧. Regarding tariffs, Honduras, as member of the Central American Common Market. y. Nat. (CACM), adopts the Central American Tariff System, which uses as a base the. er. io. sit. Harmonized Commodity Description and Coding System nomenclature of eight digits.. al. n. iv n C U requirements; labels are just Directorate (SRD). General goods h have e nnogspecial c h i labeling Labeling requirements are set by the Ministry of Health through the Sanitary Regulations. required to have basic information such as manufacturer, country of origin, expiration date, health warnings, etc. However, special requirements do apply to some food products and pharmaceuticals, such as translation into Spanish.. Stick-on labels are allowed to fully comply with Honduran labeling requirements on product information, but not to indicate the manufacturing or expiration date, because they can be easily altered.. Exporting Process from Honduras. 28.

(36) There are no known export subsidies provided by the Honduran government. 3 This means that local farmers and producers have no incentive from the Government to export their products. However, Guanxi Trading LLC will work closely with local farmers and producers to motivate them to enter the foreign market and thus, increase their sales and productivity.. To be able to export, an exporting license must be granted by CENTREX, in which an exporter code will be granted and must be used on all procedures regarding export permits.. 政治大. For all exports exceeding US$3000 in value, an Export Declaration must be issued by CENTREX.. 立. ‧ 國. 學. Additionally, for food and plant related exports, the following are the requirements demanded by the Ministry for Agriculture and Livestock (SAG):. ‧. Zoosanitary certificate, which is issued by the Division of Food Control, a section. y. Nat. . sit. of the Ministry of Public Health. This is required for all products and sub products of. er. al. n. . io. animal origin (live animals, dairy products, seafood and meats). Cost is around US$13.. v. Phytosanitary certificate: for all exports of plant products and sub products. Cost is. around US$13.. Ch. engchi. i Un. These certificates are issued by the Center for Export Procedures (CENTREX), for which an extensive list of documents is required for approval of the certificate.. Additionally, the Central Bank of Honduras (BCH) demands the following: -. Export Declaration Form. -. Income Declaration Form. Coffee exports must have the following documents: 3. 2011 Investment Climate Statement – Honduras. U.S. Bureau of Economic, Energy and Business Affairs. March 2011.. 29.

(37) -. Commercial invoice, original and copy. -. Photocopy of the contract agreement. -. Photocopy of shipping instructions. -. Photocopy of notice of sale from the Honduran Coffee Institute, IHCAFE, which is the institution that is responsible for the development of the coffee industry in Honduras. -. Request for extension of the export certificate and certificate of origin. -. Pink slip copy of the export certificate issued by IHCAFE. -. Certificate of origin type “O” from IHCAFE. -. Export certificate from the International Coffee Organization (ICO). 學. ‧ 國. -. 政治大 Photocopy of the national tax registry (RTN) 立. Additionally, to be able to export coffee from Honduras, Guanxi Trading LLC must be a registered member of IHCAFE.. ‧ y. Nat. For exports of any type of samples with no commercial value, a request must be made to. n. er. io. al. sit. CENTREX for registration statement and export control.. Ch. 2.11.2 Importing/Exporting Process e ntogTaiwan chi. i Un. v. Because of the lack of limited land and natural resources, Taiwan depends a lot on the import of a wide range of agricultural and food and beverage products from different countries. Taiwan has an acquired advantage over Honduras. It’s developed IT industry has made it one of the largest exporters of manufactured products and the quality of their goods has made them increasingly attractive to overseas markets.. Importing Process in Taiwan. 30.

(38) A private trader, such as ourselves, must be registered as an importer with the Bureau of Foreign Trade (BOFT) and comply with numerous legal requirements. Additionally, we must apply for import licenses depending on the types of products being imported.. Customs regulations and import procedures are managed by the Directorate General of Customs, which is a division of the Ministry of Finance. The Taiwanese tariffs are based on the Nomenclature of the Harmonized system of Name and Codification of Goods.. 治政大 by TRADE-VAN Services electronically, thanks to an electronic filing system operated Information Corporation that立 allows Taiwan customs to process import customs clearance The form used for import declaration may be submitted to Customs either manually or. ‧ 國. 學. and duty payment.. ‧. Customs levies duties on import goods in accordance with Customs Laws, Customs Import Tariff and other relevant regulations. Under the automated Customs system, cargo. y. Nat. sit. clearance is categorized into three types, namely C1 - free of paper and cargo examination,. al. n. examination.. er. io. C2 - subject to document scrutiny and C3 - subject to document scrutiny and cargo. Ch. engchi. i Un. v. Even if an import license is not required, an importer must present a completed import declaration form along with all other required documents to customs. This declaration must be made by the duty payer within 15 days before the arrival of the shipment.. Before products can be cleared in customs, the Taiwanese law requires all products, except those meant to be used by the food service sector, to have a pinned Mandarin Chinese language label using traditional characters.. The import of food into Taiwan needs to be made in accordance with the "Regulations of Inspection of Food Imports" promulgated by the Department of Health of the Executive Yuan. The Department of Health (DOH) is the legal body responsible for managing food. 31.

(39) safety in Taiwan. The DOH warrants the Taiwan Food and Drug Administration (TFDA) to conduct food quality inspection on imports at the port of entry.. The Council of Agriculture (COA) is the statutory body responsible for animal and plant quarantine. COA’s Bureau of Animal & Plant Health Inspection & Quarantine (BAPHIQ), conducts quarantine inspection on fresh produce, meat and poultry, and pet food. The clearance of goods having an import value exceeding US$5000 will need to establish a power of attorney. A power of attorney is also necessary when special documents are needs for customs clearance.. 治政大flowers, plants, and seeds are The import of agricultural products, animal products, 立 Metrology and Inspection. regulated by Bureau of Standards, ‧ 國. 學. The import of tobacco and liquor is regulated by Department of National Treasury, from. ‧. Ministry of Finance. A photocopy of the tobacco and/or alcohol importer business license or an approval issued by Ministry of Finance is required. Additionally, an import permit is. y. Nat. n. al. er. io. liquor over 5 liters.. sit. needed for cigarettes over 1,000 sticks, cigars over 125 sticks, cut tobacco over 5 pounds or. Ch. Exporting Process from Taiwan. engchi. i Un. v. A formal customs declaration is required for articles subject to licensing requirements or for those exceeding US$5000 in value. Exports are classified into permissible and controlled items. When exporting articles included in “List of Goods Subject to Export Restriction”, licenses or permits shall be obtained from other related agencies prior to filing declarations. Documents necessary for declaration: -. Pro forma invoice in duplicate. 32.

(40) -. Packing list. -. Third copy of Export Permit. -. Power of attorney (if declared by customs broker). -. Delivery Note. Other requirements include those specified in laws or regulations, such as certificates issued by competent authorities for quality inspection, medicine inspection, food sanitation inspection, animal or plant inspection, and certificates of country of origin and payment of commodity tax, etc.. 政治大. Commodities must be exported in accordance with the Foreign Trade Act, the Enforcement. 立. Rules of the Foreign Trade Act, the Regulations Governing Export of Commodities, the. ‧ 國. 學. Regulations Governing Export and Import of High-tech Commodities, the List of Commodities Subject to Export Restriction and the List of Commodities Entrusted to. ‧. Customs for Export Examination.. y. Nat. sit. Products being exported from Taiwan by sea are subject to a Harbor Construction Fee. al. er. io. amounting to 0.3% of product value. Exports are also subject to 0.05% of ad valorem. n. contribution to a Trade Promotion Fund.. Ch. engchi. i Un. v. 2.11.3 Customs, Transportation, Insurance and Payment Issues Customs Guanxi Trading LLC will need a customs broker in order to help clear customs and help obtain various government permissions and other clearances. For customs clearance, a customs agent must be used for shipments with over US$1000 in value and weight of 40 kg. Customs clearance is a very bureaucratic procedure, so counting with a reliable customs brokers is essential.. 33.

(41) Typically, a customs brokerage service fee is around US$100 for small shipments. For clearance of full container loads (FCL) or less than container loads (LCL), the customs brokerage agency fees depends on the weight of the shipment, CIF value and product type.. Transportation. 治政大 kg and 28,800 kg for the 40 ft. having an approximate maximum capacity payload of 28,200 立 container . Standard shipping containers are of 20 ft. and 40 ft. of length, with the 20 ft. container 4. ‧ 國. 學. Because significant savings can be achieved by sharing a Full Container Load (FCL) rather. ‧. than the more expensive Less than Container Load (LCL), we will seek cargo consolidation services whenever possible.. sit. y. Nat. er. io. The only port of entry into Honduras on the Pacific Coast is the San Lorenzo Port.. al. n. iv n C to and from Taiwan. Therefore, as ahpoint of entry forUTaiwanese products into Honduras, engchi in some occasions the Port of Puerto Cortés Port will be used. This port is located in the Unfortunately, this port is not used by the major shipping companies transferring products. Caribbean Sea coast and it is the main seaport port in Honduras. It is also convenient because it close to San Pedro Sula, the industrial capital of Honduras. This port provides services such as piloting, loading and unloading, cranes, forklifts and storage facilities. In other occasions, products will be shipped to El Salvador’s principal seaport, Acajutla, which lies on the Pacific Coast. Later, products will be shipped by land to Honduras.. 4. Maersk Line Container Dimensions. http://www.maerskline.com/globalfile/?path=/pdf/containerDimensions. 34.

(42) As a point of entry and exit of Taiwan, Keelung Sea Terminal will be used due to its proximity to Taipei.. Geographical distance is an underlying concern for international trade between Honduras and Taiwan. The distance from the Keelung Port, Taiwan to the Port of Puerto Cortés in Honduras is around 14,502 km if it would follow a direct path. A typical commercial flight takes around 16 hours of flight time. A small shipment made through the local postal offices will take around two to three weeks. Nevertheless, most ship cargos from Taiwan pass through Panama first and then reach. 治政大liner shipment will take around 24 traveled is 16,780 km or 9,061 nautical miles . An ocean 立of 16 knots . days at an average vessel speed Honduras, which increases the distance and thus, the delivery time. The total distance 5. 6. ‧ 國. 學. When shipped through El Salvador, the total distance from Taiwan to El Salvador ports is. ‧. around 14,538 km or 7,850 nautical miles and an ocean liner shipment traveling at an average of 16 knots will take around 20 days. To this, we have to add the transit time to. y. Nat. n. al. er. io Cargo Insurance. sit. Honduras, which should take no more than one day.. Ch. engchi. i Un. v. Because anything can happen at sea or by air, we will assure all products being exported from one country to another have the proper insurance as a safeguard in case of any unfortunate event. For this, we will have an insurance partner with whom we’ll insure all our shipments from Honduras and Taiwan.. Cargo insurance is a critical part of the international transportation process. According to trade finance rules, a minimum of 110% of insurance coverage must be purchased for the shipped cargo. Usually, most cargo services offer insurance premiums, thus facilitating the process. 5 6. http://www.timeanddate.com/worldclock/distance.html http://www.searates.com/reference/portdistance/. 35.

(43) Payment Because we will have offices in both countries, payment from our buyers will be received and handled locally. Later, a bank transfer will be made to our office in the foreign market for payment to the supplier. Inter-company transactions will avoid the need for use of letters of credit or open accounts for international trading.. CHAPTER III.- MARKET ANALYSIS AND POTENTIAL. 立. 3.1 Industry Overview. 政治大. ‧ 國. 學. In 2010, world merchandise trade volume rose by 14.5% from 2009, reaching around US$13.94 trillion. Emerging economies in Asia and Latin America presented the highest. ‧. growth rates. In 2011, world trade is expected to rise by 6.5%, which is only slightly higher than the average experienced during the years 1990 – 2008, but which was then disrupted. y. Nat. er. io. sit. by a 12% slump in 2009 due to the global financial crisis and recession.. al. n. iv n C that the key to succeed in the market is differentiationUand looking for unexplored market he ngchi opportunities. We now analyze the international trade industry using Michael Porter’s Five. To handle this trade volume, there is a vast array of import and export companies, meaning. Forces Model. Figure 3: Porter’s Five Forces Because of the competitive markets we are immersed in, suppliers bargaining power is relatively high. We plan to deal with this threat by providing an efficient and valuable service.. There is a relatively mid-low threat of new entrants because even though the start/up investment is not too high, the language, market knowledge and culture and geographical distance can pose a challenge to attracted companies.. 36.

(44) Globalization and advances in Internet based strategies pose a threat to our business as communication gaps are shortened and companies decide to “cut out the middle man”.. ‧. ‧ 國. 立. 政治大. 學. This is relatively high even though there are a lot of players in the industries we deal with, but maintaining relations with top-quality and reliable supplier is fundamental to our business.. 3.2 Market Analysis and Potential. sit. y. Nat. io. er. Honduras is an agricultural based economy, as was Taiwan before it shifted from importsubstitution to export-led growth. Honduras is now where Taiwan was 60 years ago.. n. al. i Un. v. Taiwan’s path to success is one that Honduras can learn a lot from.. Ch. engchi. Honduras’ main export products are coffee and bananas. Among other important sectors in the export market are farmed shrimps, palm oil, cocoa, tobacco and tobacco related products, textiles and apparel, wood, pineapples, sugar, soap/detergents, oriental vegetables, and metals such as zinc, silver, lead and gold.. Among its major imports are: fabrics, machinery, plastic products, paper and other related products, industrial chemicals, petroleum, lubricants, vehicles, metals, electrical equipment, medical equipment and processed foods.. 37.

(45) The Honduran economy had a strong export-processing maquila industry, which was focused on assembling textile and apparel goods for re-export to the United States. It also had quite a strong automobile wiring harnesses sector, but both sectors have declined significantly due to the international economic downturn which started in 2008, resulting in lower demand and companies moving their operations out of the country due to lower labor costs in other countries. A large subsistence farming population continues to be the country’s major sector. The United States is Honduras’ major export market (40%), followed by EU (26%), rest of. 治政大States has been Honduras’ major supplies around 50% of Honduran imports. The United 立 years, but with globalization nowadays, countries have to trade partner over the past several. Central American countries (18%), Asia (8%) and others (8%)7. The United States also. ‧ 國. 學. look to expand to other markets.. ‧. With the recent global crisis, Honduras’ economy suffered a lot due to the decrease in demand from the United States, which proved once again that it is impractical to rely on a. y. Nat. er. io. al. sit. single, huge market to which direct exports and efforts.. v. n. This is why Guanxi Trading LLC focuses on doing business with Asia. Taiwan is a perfect. Ch. i Un. starting point because it is a close ally of Honduras, commercially and politically.. engchi. Honduras and Taiwan hold a strong relationship. Taiwan over the years, has offered Honduras various support and grants in various projects, such as tourism development, microfinance for small and medium enterprises, housing, infrastructure, health, employment, development of urban and rural areas, as well as education, with numerous scholarships granted to Honduran citizens to study in Taiwan.. In addition, Taiwan has also has sent numerous technical missions to Honduras to share skills in electricity generation, rice farming, food processing, among other areas. 7. SIECA. Honduran exports 2010. http://estadisticas.sieca.int/siecadb/Estadisticas/MenuEstadisticas.asp?Base=Paises. 38.