Term Project

On
N. Mohammad Plastic Industries Internationalization process.

International Business
Course Code: INB-301
SECTION-05

Submitted to:
HASAN HAQUE.
Lecturer, Department of International Business
Independent University, Bangladesh
Submitted by:
NAME ROLL
ZM Sabbih 2022077
Purno Pritom Sinha 1820213
S.M. Omar Dhrubo 1710534

Date of Submission: 30 August, 2021.

1
 Table of Content,

Details Page:
Executive Summary 03
Company Description 04
Export Team 04
Product and Service Description 04
Export opportunities 05
Where to export:
Analysis of INDIA 05
Analysis of MALAYSIA 07
Analysis of CHINA 08
Comparison of all Countries 09
Risk Management 10
Market Entry strategy 11
Product Pricing 12
Product liabilities Consideration 12
Intellectual Property Rights 12
Choosing the Best Country and 13
Conclusion
Reference 14
Appendix 15

2
 Executive Summary:

Bangladesh is a developing country that is known for exporting ready-made products in the
Global economy. In recent years, the country has experienced speedy economic growth, driven
primarily by readymade garment exports and remittances from migrant workers. While tapping
into its vibrant private sector and wide pool of low-cost labor, the country is diversifying its
export base in terms of goods and destinations.

N. Mohammad Plastic Industry Ltd. has launched its journey in 1968 to serve mainly as
manufacturer of plastic furniture and household accessories. This company is operating
successfully ensuring its continued improvement. The much needed items such as plastic chairs,
tables, rack, tools, trashes, hangers, etc. are being manufactured with the latest technology within
affordable and reachable price by the consumers.

Our group was assigned to prepare a report on Export Plan of N. Mohammad Plastic Company
so that we are able to demonstrate a basic understanding of global cultural knowledge through
understanding the core components of international business and the local and national
differences, understand the basic different factors that determine international trade patterns and
capital flows and their impact on global business operations, identify the basic international
competitiveness of nations and their attractiveness for international business and to analyze
basic knowledge on cross-border communications and managerial issues from an International
business context.

Globalization helps a country to access new culture, it helps to improve technology and
innovation, access new markets, make new work opportunities etc. etc. N. Mohammad plastic
industries also want to globalize their product in three different countries. In this report there will
be discussion about the N. Mohammad plastic group. Export opportunities for their goods.
Country analysis, all of their culture analysis, Risk management everything for identifying the
best country to export.

3
 Company Description:
N. Mohammad group has been providing their services in Bangladesh since 1968 and MR. Noor
Mohammad was the founder of the N. Mohammad group. A company promise bound to the self-
reliance for company and for the community. Its quality products and services give first priority
to the needs and capabilities of the people of Bangladesh. 

N. Mohammad group all products and services are More than 1500 plastic household items,
wooden furniture, wooden plastic composite doors, boards, PVC doors, boards, pipes, PVC
fittings, thread fittings, mug, building pipes, magic pipes, coil pipes. The N. Mohammad
Company manufactures their products with the latest technology at affordable and reasonable
prices for all customers. 

The N. Mohammad plastic industry started its journey officially in the mid 80’s. Mainly this
industry manufactures plastic furniture and household accessories. Since the launch the company
earned continued improvement. 

Export Team:

For exporting products in the foreign country N. Mohammad’s export team, which will be leaded
by MR. X and his team who are specialized in this field, and this export team will take all the
responsibilities for its internationalization process.

Product and Service Description:

From the mid 80’s N. Mohammad started manufacturing a few kinds of plastic products. Those
are chairs, table, tray, wardrobe, mug, school bench, bowl, dining table etc. N. Mohammad
plastic limited makes various types of product, each of the products are different from other,
each product has different types of color, different style, different way to use. They make a
wooden plastic combination door which is very popular and admired by the Bangladeshi people. 

N. Mohammad are importing their raw materials from the foreign countries to make the product
lifespan and quality better. The company tries to make the product international level. Mr. Noor
Mohammad who was the founder of the N. Mohammad group visited foreign companies, to learn
the way how they produce their products. MR. Noor Mohammad was a true patriot and a man of
clear social conscience. Plastic wastage is very harmful for the environment so, he makes the
production system at minimum wastage. 

4
 Export Opportunities:
Plastic is cheaper than metal. People use plastic because they can buy it at a low price and use
this for a long time. People can also change their product whenever they want based on their
taste or demand. 

Exporting is the next obvious step to take on the path to success if N. Mohammad plastic
industries want to manage risk, produce new revenue streams, produce more efficiently,
neutralize competition, and ensure the stability of the organization.

India is a large country with a mass population, plastic industries of India cannot fulfil the
requirement of its people, so there is a high chance if N. Mohammad take risk and export their
product, and they can takeover minimum 5% of the market.

In Malaysia a lots of people are visiting the country on a daily basis. So, if N. Mohammad plastic
industry will able to attract those tourist by their products and if people give good response, then
the local market sellers will buy product from the company.

China is the most populated country in the world, also china produced plastic products
massively. This is the biggest market of plastic industries. So, in this huge market if N.
Mohammad can introduce their product, there is a chance to compete in the huge market for the
mass population.

Where to export: “Analysis of INDIA”

Country Profile:

India’s Economy condition shows-Gross domestic product: 658.35 billion USD World Bank,
GDP growth rate: 2.33% annual change World Bank, Gross national income: 6.7 trillion World
Bank, Unemployment: 5.36% WORLD BANK Population: Imports: $547.84 billion WORLD
BANK Main industries: The plastics sector is not a major industrial factor. India is a well-
known country with a population that is likely to surpass China's in 2028, according to the
United Nations. So they will mostly focus on exporting. Currency: Indian rupee Exchange rate
(between Indian rupee and Bangladeshi Taka): 1 Indian rupee = 1.16 Bangladeshi Taka.

Industrial Profile of India:

The Indian plastics market is made up of about 25,000 companies and employs 3 million people.
In 2009, the internal capacity of polymer production was 5.72 million tons. The western Indian
state of Gujarat is a major center for plastic processing and has the largest number of plastics
manufacturers with more than 5,000 plastics companies.

The growth rate of Indian plastic industries is one of the highest in the world. And India has
approximately one hundred and thirty eight crore population. Which makes the export work

5
business quite easier. Because of the mass population, if one business is able to gain only 1% of
market share, the business sales will be at least ten million.

Bangladesh and India are already in a good relationship with each other for import and export
goods. Between these two countries many goods like food items, clothing items, makeup
products, t-shirts, clothes, fruits and many other items. Between Bangladesh and India there is a
zero tax rate. It does not mean the tax rate is zero but they don't have to pay taxes for the import
or export.

Competitors in Indian Plastic Industries:

The Indian market is really big. In this big market there are already some reputed plastic market
holders. The top Indian plastic market holders are.
1. Supreme industries ltd.
2. Astral poly technik ltd.
3. Jain irrigation system ltd.
4. Responsive industries ltd.
5. Mayur uniquoters ltd.

At present the top five industries are leading the market in the Indian market. But the Indian
market has lots of small, big, medium plastic businesses. All of the businesses are the
competitors for the N. Mohammad plastic industries. 

Cultural Assumption:

India and Bangladesh have almost the same cultural similarities also with some differences. The
biggest difference is in religion. Where the Bangladesh is Muslim majority country and other
hand India is a Hinduism country. In Bangladesh 90% of entire people are Muslim, 8% of people
Hindu, and rest 2% others. In India 79% of people is Hinduism, 14% people are follow Muslim,
and the rest others. (Those percentage numbers are approximate 2016 year). 

Another big difference between Bangladesh and India is in language. Bangladesh has 2 major
languages, English and Bengali. Where India has 23 major languages. Language is needed for
communication. So, where communication is going hard the business also will be harder. 

Other than those countries' behavior, taste, and society are quite similar. How Bangladeshi
people walk in the streets, drink, and eat are quite similar to Indian culture. Because of the mass
population and facilitation to each other the behavior and taste is dame.

6
 Country Analysis of MALAYSIA
Country Profile:

Malaysia’s Economy condition shows – Gross domestic product: US$100.57 billion GDP
growth rate: $387.094 billion Gross national income: 669.5 billion PPP dollars
Unemployment: 4.7 percent in June 2021 Minimum Wage: 1200 MYR (US$288.5) per month
Currency: Malaysian Ringgit Exchange rate (between Malaysian Ringgit and Bangladeshi
taka): 1 Malaysian Ringgit = 20.34 Bangladeshi Taka Main industries: Electronics ,
semiconductors , microchips, integrated circuits, rubber, oleo chemicals, automotive, optical
devices, pharmaceuticals, medical equipment, smelting, timber, wood pulp, Islamic finance,
petroleum, liquefied natural gas, petrochemicals, telecommunication product.

Industrial Profile of Malaysia:

Malaysia is one of the fastest economically growing countries in the world. Malaysia's plastic
market was valued at 3243 million dollar in 2020. And during the forecast period (2021-2026)
the market is expected to register about 3% CAGR. In Malaysia plastic market is gaining
revenue more than 75%. 

Malaysian companies have maintained good relations with their investors and the organizational
structure is strong. Malaysia is one of the largest tourist attractions in Southeast Asia and the
Malaysia tour package is one of the most searched items on the internet. So they need their
plastic industry for making chairs, tables, etc. especially for the food container. 

Competitors in Malaysian Plastic Industries:

In Malaysia there are already some established plastic industries. Top plastic industries are. 
1. Able plastic.
2. K.P.I plastic.
3. Toho plastic industries.
4. Polytypic plastic industries.
5. Borneo jaya plastic industry.

They are market leading in the Malaysia plastic industries. N. Mohammad has to compete with
them for market share.

Culture Assumption:

Malaysian people love to eat food. Malaysian people celebrate every occasion with food. A large
part of the population always goes to the night market to eat food. People also take some food in
bags. Malaysian people use plastic bags, plastic food containers, and plastic cups for eating or
drinking. 

7
For tourism they have to use the one time plastic container. These plastic bags or containers they
use one time and throw. This eating habit is a culture. For this reason if they want to use reusable
containers their cost will be high and they will lose too much time to wash again. 

Beside that Malaysia is also Muslim majority country like Bangladesh. Because of tourism N.
Mohammad does not have to face such cultural differences. 

Country Analysis: “CHINA”

Country Profile:

China Economy condition shows Gross domestic product: 15.66 trillion USD World Bank
GDP growth rate: 2.3% annual change World Bank Gross national income: 16.70 trillion World
Bank Population: 1443925267 Unemployment: 5.5% world bank Imports: $2.71 trillion Main
industries: It's a huge country with 29 different states and six union territories. The market
differs significantly between its many areas and states. It covers a lot of industrial aspects,
including (iron, steel, aluminum, and other metals, coal and many more.) Therefore, the plastics
industry is not one of their primary industrial factors. China is become the world's most
populous country. As it is the world's largest exporter, the political section focuses mostly on
exporting. Currency: chains’ yean Exchange rate (between Chinese yean and Bangladeshi
Taka): 1 Chinese Yuan = 13.19 Bangladeshi Taka.

Industry Profile of China:

China is the largest producer and exporter of plastics in the world. Near one of the fourth global
plastics production, China has more than 15000 plastic factories. China is the unrivaled
manufacturer and exporter for the Plastics Industry. 

There are more than 15,000 plastic factories in the eastern and central southern regions of China.
The perfect size of China’s manufacturing base means that it can produce all kinds of plastic
products, regardless of complexity or niche of specific products. Powerful supplier and supply
chain infrastructure is one of the notable strengths of China’s plastics industry, enabling it to
meet large volume orders in minimum cycle time and maximum cost efficiency. 

Competitors in China Plastic Industries:

China has the biggest plastic market in the world. In this market lots of competitors are there.
Some top industries are.
1. Wuwei dahe plastic industry Co. ltd.
2. Desheng plastic industry.
3. Gansu Yisu plastic industry Co. Ltd.
4. Tianke plastic industry.
5. hong euan plastic industry.

8
For the massive population the market is very big. In the china market there are also small,
medium, large businesses. 

Cultural Assumption:

Bangladesh and China's cultural differences are mostly different. Rules and regulations are the
key of Chinese culture. People maintain distance from each other. People talk and behave
respectively with each other. Before the business meeting people like to talk with another party
to make the relationship stronger. 
 
In Bangladesh people are very friendly. People sometimes forget to give space to other people.
People care less about throwing waste in the recycle bin, whereas in china people are very
attentive about throwing waste in the right place. 

So, when the N. Mohammad plastic industry will go to China, they have to really focus on
Chinese culture. They have to be on time for the meeting. Before the meeting they should have a
little chat with the other party. When it is time to exchange business cards they have to read first
then respectfully put it in the pocket. And be respectful about their environment and rules and
regulations.

Comparison of all Countries

Factors Bangladesh India China Malaysia
Capital Dhaka New Delhi Beijing Kuala Lumpur
Constitutional form democratic fundamental semi-preseidental federal
Currency taka rupi yuan ringgit
Per Capita GDP $2,064 $2,100 $10,262 $11,415
GDP 57.18 billion 658.35 billion $15.66 trillion $100.57 billion
Population 161376708 1352642280 1443925267 32747402
labor force 81.95 million 519 million 759 million 15.58 million
Unemployment 4.10% 5.36% 5& 4.70%
Flexible for legal ENV Flexible Flexible Flexible Flexible
political stability stable stable stable stable
relation with bangladesh good good good
cultural difference moderately similer moderate moderate
status of plastic industries average good very good good

9
 Risk Management:

It is very important for a company to measure risk for entering a new country. There are many
risks for a company to enter in a new market, such as: country risk, credit risk, currency risk etc.
these types of risk are very different from each other and change in a short period of time. 

Country Risk:

One of the major risks for exporting is country risk. There is always a risk to a business. In
domestic business people can easily find out the problem and for their own habitable area most
of the time people can easily find out those solutions. But those risks are going much higher
when it becomes international.

For the exporting goods or product countries the economy varies too much. Due to doing
business far from their own country in other regions it is hard to measure the economic status of
their market. And for the long distance business there's always a chance for higher levels of
instability and corruption.

To avoid those risks N. Mohammad has to issue or buy credit insurance. This credit insurance
will be valued for if the customer does not want to pay, or bankruptcy, contact cancellation, issue
with currency transfer. N. Mohammad can consult the Export Development Canada Country
Risk Quarter for information on risks in about 200 markets. N. Mohammed needs to be familiar
with the co-terms, which are a set of formal terms with agreed money within the trading
community. These will help to write better international agreements in future.

Currency Risk:

None of the country’s currency are stable, the currency value always change in times. Most of
the time the currency value change when demand and supply very. If currency rate change its
affect the business because they can get less money than previous. For the 5 year currency
change rate given below.

10
Credit Risk:

Credit risk means when counterparty will fail to meet its obligations in accordance with agreed
terms. This risk is created when companies or resellers fail to pay the amount that they agreed to
pay. The higher borrowing cost makes the credit risk higher. Because the whole amount can be
refused to pay.

India, Malaysia, and China have established reputed plastic industries. There is a low chance for
credit risk for the N. Mohammad because of the reputed business and good relationship. With
Bangladesh and others. 

Market entry strategy:

 
For the present coronavirus situation people cannot run their business physically. People are
buying and fulfilling their needs online. So, for the market entry by exporting N. Mohammad has
to fix the market first, locate their target market. And communicate with the local product
distributor and resellers. Send them a sample product first. After based on their review N.
Mohammad can take export method to do the business internationally.  

11
 Product pricing:
For the pricing of their product first N. Mohammad has to understand the market situation. For
the beginning in a new market the best price will be just to cover the average variable cost for the
short period. And for the long term they must cover the average fixed cost to be stable in the
market. 

Approximately, if N. Mohammad have to pay 500 taka for one product. And the average variable
cost becomes 250 taka and fixed cost is 200 taka. I first position they will sell the product at 750
taka, after than they will sell the product in 950 taka.

Product Liability Consideration:

Product Liability is the field of law where manufacturers, distributors, suppliers, retailers and
others who make products available to the public, and those public who are injured by using
those products. For exporting a product a company has to test their product first. For the product
liability and testing the product how good quality it is N. Mohammad has to test all of their
products in Bangladesh BSTI. If BSTI approved then N. Mohammad can export.

Intellectual Property Right:

Intellectual property is a broad classification of a set of possessive assets that is legally protected
by the company from outside use or implementation without ownership and consent. An
indomitable asset is a non-physical asset that owns a company.

Other than N. Mohammad needs two licenses. Those are,

 Import export license.
 Bonded warehouse license.

This two license is always needed for exporting products. Without those licenses no business can
export in other countries. 

12
 Choosing the best country and Conclusion:

From the upper all discussion India is the best country for export for the N. Mohammad plastic
industries. India is near Bangladesh. And already Bangladesh is in good relationship with India.
For any problem or issue N. Mohammad can visit the problem physically. Obviously it takes
some time but India is closer than China and Malaysia. 

Malaysia is the second best country for exporting for N. Mohammad plastic industries. Malaysia
is the biggest tourism country in the world. N. Mohammad plastic industries makes some
colorful and attractive plastic products. If those products are able to attract tourists, then the local
reseller will regularly do business with N. Mohammad plastic group.

N. Mohammad plastic industries for exporting their product third country is China. China has the
biggest plastic industry in the world. And the industry is still rising. China is the third choice
because the culture is quite different. Chinese people maintain strict rules and regulations. So for
the different culture system china is the third country to export.

13
 Reference:
https://www.entrepreneur.com/article/222861
https://www.thebalancesmb.com/how-to-start-an-import-export-business-part-1-of-2-1953416
https://www.india.gov.in/india-glance/profile#:~:text=India%20is%20one%20of%20the%20oldest
%20civilizations%20in,conquer%20nature%20for%20the%20benefit%20of%20the%20people .
https://www.bpf.co.uk/article/the-plastics-industry-in-india-an-overview-446.aspx
https://blog.caonweb.com/impact-of-gst-on-export-of-goods-and-services/#:~:text=caonwebteam
%20GST%20GST%20for%20export%20of%20goods%20and,GST%20to%20the%20supplier%20of
%20goods%20or%20services .
https://www.infodriveindia.com/top-products/top-export-products-from-bangladesh-to-india
https://www.trendrr.net/4630/top-11-plastic-companies-of-india-famous-biggest-residential-
commercial-needs/
https://www.youtube.com/watch?v=JSlBjoiFlUQ
https://www.nationsonline.org/oneworld/malaysia.htm
https://www.bbc.com/news/world-asia-pacific-15356257
https://www.nationsonline.org/oneworld/malaysia.htm
https://www.youtube.com/watch?v=RBswJoaviPc
https://www.mordorintelligence.com/industry-reports/malaysia-plastics-market
https://www.youtube.com/watch?v=JHQNLN_tK1k
https://www.nationsonline.org/oneworld/china.htm
https://intrepidsourcing.com/industry-reports/plastics-industry-report/#:~:text=China%20is%20the
%20largest%20producer%20and%20exporter%20of,exporter%20for%20the%20Injection%20Molds
%20%26%20Plastics%20Industry .
https://www.bdc.ca/en/articles-tools/marketing-sales-export/export/common-risks-guard-against-
when-exporting
https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/currency-risk/
https://www.marketing91.com/what-is-credit-risk/

14
Appendix:

COMPANY PICTURE.

15
 PRODUCTS OF N.
MOHAMMAD.

16