Vietnam Coffee Industry 2015: Author: Depocen - Reviewed By: Stoxplus JSC

Vietnam Coffee Industry 2015
Author: DEPOCEN | Reviewed by: StoxPlus JSC

Date of report: 28 March 2016
Part of StoxPlus’ Market Research Report Series for Vietnam www.stoxresearch.com
@ 2015 StoxPlus Corporation.

All rights reserved. All information contained in this publication is copyrighted in the name of StoxPlus, and as such no part of this publication may be
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Table of Contents
Part Content Page Part Content Page
Executive Summary 3 6 Leading Import Markets 41 – 50
1 Global Industry Overview 4 – 11 6.1 European Union 31 – 32
1.1 Consumption 4–5 6.2 United States off America 33 – 34
1.2 Production 6–7 6.3 Japan 35 – 36
1.3 Trade 8–9 7 Prospect 37 - 38
1.4 Price and Market Balance 10 – 11 8 Leading companies 39 – 43
12 - 19 A notes on methodology 44 - 45
2 Domestic Industry Overview
2.1 Consumption 12 – 13
2.2 Production 14 – 15
2.3 Trade 16 – 17
2.4 Export Price 18 – 19
3 Financial Analysis 20 – 22
4 Five Forces Analysis 23 – 28
5 Legal Environment 29 – 30
2
Executive Summary
The world's coffee consumption continued to grow by 1.1% Vietnam’s coffee consumption, 2011-2014
to the level of 8.9 million metric tons (MT) in 2014.
By 2019, the world’s coffee consumption forecasts to

continue to grow steadily at 2.0-2.5% per annum to reach
the level of over 10 million MT.
Source: DEPOCEN
Vietnam's coffee production, despite dropping, continued

to stay at high level of 1.7 million MT in 2014, about 5.6%
less than in 2013.
Vietnam's coffee consumption continued to grow.
Top 05 leading companies in Vietnam coffee market

includes: Intimex Group, Tin Nghia Corporation, Louis Dreyfus
Commodities (LDC) Vietnam, Simexco Daklak and Olam Vietnam
3
Contents
Section 1: Global Industry Overview
1.1 Consumption
1.2 Production
1.3 Trade
1.4 Price and Market Balance
4
Consumption
Figure 1: The leading coffee consumers
This part is intentionally left blank
Note: Bubble size indicates coffee consumption in 2014 (Thousand MT)

Source: International Coffee Organisation (ICO) and DEPOCEN
5
Contents
Section 1: Global Apparel Industry Overview
1.1 Consumption
1.2 Production
1.3 Trade
6
Production
Brazil and Vietnam were the two largest coffee producing countries with total volume of 4.4
million MT in 2014
Figure 2: Leading coffee producers
Note: Bubble size indicates coffee production in 2014 (Thousand MT)

Source: ICO and DEPOCEN
7
Contents
1.1 Consumption
1.2 Production
1.3 Trade
8
Trade
The world's total export reached the level of 8.1 million MT
Figure 3: Major Coffee Exports and Imports, by Country of Origin/Destination, 2014
Source: International Trade Centre (ITC) and DEPOCEN
9
Contents
1.1 Consumption
1.2 Production
1.3 Trade
10
Price and Market balance
The annual average price was about USD 3423 per MT, 30% higher than in 2013
Figure 4: International Market Price of Coffee, 2011-2014
USD/MT
Source: ICO and DEPOCEN
11
Contents
Section 2: Domestic Industry Overview
2.1 Consumption
2.2 Production
2.3 Trade
2.4 Export price
12
Consumption
122 thousand MT of coffee was consumed in 2014
Figure 5: Vietnam’s coffee consumption, 2011-2014
2011 2012 2013 2014
Source: DEPOCEN
13
Contents
2.1 Consumption
2.2 Production
2.3 Trade
2.4 Export price
14
Production
Coffee production in Vietnam continued to stay at high level with 1.7 million MT in 2014 and
concentrates intensively
Figure 6: Coffee Growing Area Distribution, 2014
Source: Ministry of Agriculture and Rural Development (MARD), Departments of

Agriculture and Rural Development (DARDs), Local Exporters, and DEPOCEN
15
Contents
2.1 Consumption
2.2 Production
2.3 Trade
2.4 Export price
16
Trade
Vietnam was expected to earn about USD 3.2 billion from exporting nearly 1.5 million MT of
coffee to more than 70 countries in 2014
Figure 7: Coffee export by Vietnam: Key facts Figure 8: Vietnam's Major Coffee Exporting Markets
Year Volum Growth Value Growth

e
2011
2012
2013
2014
CAGR 2011-14
Source: ITC and DEPOCEN Note: Bubble size indicates coffee export value in 2014 (million US dollars)
Source: ITC and DEPOCEN
17
Contents
2.1 Consumption
2.2 Production
2.3 Trade
2.4 Export price
18
Export price
Figure 9: Coffee Export Price (FOB, Ho Chi Minh City) Figure 10: Differential between Export Price and Farm-Gate Price
Source: Dak Lak Trade, Investment & Tourism Promotion Center (DTITPC); Vietnam Source: DEPOCEN from DTITPC; VICOFA; BCEC, Exporters
Coffee-Cocoa Association (VICOFA); Buon Ma Thuot Coffee Exchange Center
(BCEC), Exporters, and DEPOCEN
19
Contents
Section 3: Financial Analysis
20
The financial ratios indicate the low and instable degree of profitability over the period 2009-
2013
Figure 11: Financial ratios in coffee trading subsector
Financial Ratios 2009 2010 2011 2012 2013

Profitability
Net income
Return on Equity
Return on Asset
Gross Profit Margin
Debt-to-Asset Ratio
Debt-to-Equity Ratio
Current Ratio
Quick Ratio
Cost of Goods Sold

Business Cost
Interests
Corporate Income Tax
Other Costs
Source: General Statistics Office of Vietnam (GSO) and DEPOCEN
21
The financial ratios indicate the low and instable degree of profitability over the period 2009-
2013 (con’t)
22
Contents
Section 4: Five Forces Analysis of Vietnam Apparel Industry
23
Section 4: Five Forces Analysis
Threat of Entry
Threat of Entry: Degree: Week
Capital
Location Relationship
requirement
24
Power of Suppliers
Power of Suppliers: Degree: Moderate
Input
Coffee cherry
and parchment This part is intentionally left blank
Export
25
Power of Buyers
Power of Buyers: Degree: Strong
Export
Market concentration
Undifferentiated coffee This part is intentionally left blank
Integration
26
Threat of Substitutes
Threat of Substitutes: Degree: Moderate
Tea Arabica and Robusta
27
Rivalry among Existing Competitors
Rivalry among Existing Competitors: Degree: Strong
Driver up
Supply
28
Contents
Section 5: Legal Environment
29
Section 5: Legal Environment
Over the past few years, there have been many strategies and policies issued in order to
facilitate the development of coffee sector
Decision No. 124/QD-TTg National program
30
Contents
Section 6: Leading Import Markets
6.1 European Union
6.2 United States of America
6.3 Japan
31
Section 6: Leading markets
European Union
Coffee consumption in U.S.A reached 2.5 million MT in 2014
Figure 12: EU (28) Market: Key facts Figure 13: Top Origins of Imports by EU, 2014
Year Consumption Growth Import value Growth
2011
2012
2013
2014
CAGR 2011-14
Source: ICO, ITC and DEPOCEN Source: ICO, ITC and DEPOCEN
32
Contents
6.1 European Union
6.3 Japan
33
United States of America
Coffee consumption in U.S.A grew by 1.5% in 2014 to reach the level of 1.4 million MT
Figure 14: USA Market: Key facts Figure 15: Figure 10 Top Origins of Imports by US, 2014
2011
2012
2013
2014
CAGR 2011-14
Note: Bubble size indicates coffee value in 2014 (million US dollars)

Source: ICO, ITC and DEPOCEN
34
Contents
6.1 European Union
6.3 Japan
35
Japan
Coffee consumption continued to grow in 2014 to reach 450 thousand MT in 2014
Figure 16: Japan Market: Key facts Figure 17: Figure 10 Top Origins of Imports by Japan, 2014
2011
2012
2013
2014
CAGR
2011-14
Note: Bubble size indicates coffee value in 2014 (million US dollars)

Source: ICO, ITC and DEPOCEN
36
Contents
Section 7: Prospect
37
Section 7: Prospects
By 2019, the coffee consumption is forecast to continue to grow steadily at 2.0-2.5% per annum
to reach the level of over 10 million MT
38
Contents
Section 8: Leading Companies Profiles
8.1 Intimex Group
8.2 Tin Nghia Corporation
8.3 Louis Dreyfus Commodities (LDC) Vietnam
8.4 Simexco Daklak
8.5 Olam Vietnam
39
Section 8: Leading company profile
Figure 18: Market share by export volume, 2014
Source: DEPOCEN
40
Intimex Group Tin Nghia Corporation
BUSINESS PROFILE BUSINESS PROFILE

Head Office
Head Office
Website Website
Phone Phone
Founded year Founded year
Source: Company Website

41
Louis Dreyfus Commodities (LDC) Vietnam Simexco Daklak
BUSINESS PROFILE BUSINESS PROFILE
Head Office Head Office

Website
Website Phone
Phone Founded year
Founded year
Source: Company Website Source: Company Website
42
Olam Vietnam
BUSINESS PROFILE
Head Office
Website
Phone
Founded year
43
Contents
A Note on Methodology
44
A Note on Methodology
Data sources for this report
Coffee as defined in this report is the products belonging to the HS 0901 code category (the Harmonized Commodity Description and Coding
System in 2007), which includes coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee
in any proportion. Green bean coffee is under the HS 090111 category: “not roasted and not decaffeinated”.
Data used in this report comes from three main sources, the annual trade flows data compiled by
Primary International Coffee Organization (ICO) and International Trade Center (ITC), and the Enterprises Census
data compiled by the Government Statistical Office of Vietnam (GSO). The first two are used in our
sources calculation of trade indicators while the latter is to compute the financial ratios.
In addition, the data from the Ministry of Agriculture and Rural Development (MARD), the Provincial
Secondary Department of Agriculture and Rural Development (DARD), Vietnam Coffee-Cocoa Association (VICOFA)
sources and other sources is also used and cited precisely in the report.
45
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Vietnam Coffee Industry 2015

Author: DEPOCEN | Reviewed by: StoxPlus JSC

@ 2015 StoxPlus Corporation.

Part Content Page Part Content Page

Executive Summary 3 6 Leading Import Markets 41 – 50

1 Global Industry Overview 4 – 11 6.1 European Union 31 – 32

1.1 Consumption 4–5 6.2 United States off America 33 – 34

1.2 Production 6–7 6.3 Japan 35 – 36

1.3 Trade 8–9 7 Prospect 37 - 38

1.4 Price and Market Balance 10 – 11 8 Leading companies 39 – 43

2.4 Export Price 18 – 19

4 Five Forces Analysis 23 – 28

By 2019, the world’s coffee consumption forecasts to

Vietnam's coffee production, despite dropping, continued

Top 05 leading companies in Vietnam coffee market

Section 1: Global Industry Overview

1.4 Price and Market Balance

Figure 1: The leading coffee consumers

This part is intentionally left blank

Note: Bubble size indicates coffee consumption in 2014 (Thousand MT)

Section 1: Global Apparel Industry Overview

1.4 Price and Market Balance

This part is intentionally left blank

Note: Bubble size indicates coffee production in 2014 (Thousand MT)

Section 1: Global Apparel Industry Overview

1.4 Price and Market Balance

The world's total export reached the level of 8.1 million MT

Figure 3: Major Coffee Exports and Imports, by Country of Origin/Destination, 2014

This part is intentionally left blank

Source: International Trade Centre (ITC) and DEPOCEN

Section 1: Global Apparel Industry Overview

1.4 Price and Market Balance

Figure 4: International Market Price of Coffee, 2011-2014

Source: ICO and DEPOCEN

Section 2: Domestic Industry Overview

2.4 Export price

122 thousand MT of coffee was consumed in 2014

Figure 5: Vietnam’s coffee consumption, 2011-2014

2011 2012 2013 2014

This part is intentionally left blank

Section 2: Domestic Industry Overview

2.4 Export price

Source: Ministry of Agriculture and Rural Development (MARD), Departments of

This part is intentionally left blank

Section 2: Domestic Industry Overview

2.4 Export price

This part is intentionally left blank

Year Volum Growth Value Growth

Section 2: Domestic Industry Overview

2.4 Export price

This part is intentionally left blank

Section 3: Financial Analysis

Financial Ratios 2009 2010 2011 2012 2013

Cost of Goods Sold

Source: General Statistics Office of Vietnam (GSO) and DEPOCEN

This part is intentionally left blank

Section 4: Five Forces Analysis of Vietnam Apparel Industry

This part is intentionally left blank

Power of Suppliers: Degree: Moderate

Power of Buyers: Degree: Strong

Undifferentiated coffee This part is intentionally left blank

Threat of Substitutes: Degree: Moderate

Tea Arabica and Robusta