International Finance

“Chill on Demand!”
Embrace the chill! Drop the heat!

Hafsa AL GHOUM

Ahmad WATAD

Hamza ALSHAWA

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 Table of contents

INTRODUCTION......................................................................................................................................3
Product Description................................................................................................................................4
Technology and materials...................................................................................................................4
Design Considerations........................................................................................................................4
Applications.......................................................................................................................................4
Safety and Hygiene............................................................................................................................4
HS Code.............................................................................................................................................5
Markets Research...................................................................................................................................5
Operating Market...............................................................................................................................5
Target Market.....................................................................................................................................7
Demand market reflection......................................................................................................................9
Export Order.........................................................................................................................................10
Costs Study..........................................................................................................................................11
Finance plan.........................................................................................................................................12
Trade Financing Strategy......................................................................................................................12
Terms of delivery..............................................................................................................................13
Terms of payment.............................................................................................................................14
Process flow diagram...........................................................................................................................18
CONCLUSION....................................................................................................................................19
CITATIONS.............................................................................................................................................20

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INTRODUCTION

Whether it's food, personal care, or medical supplies, everyone wants to keep things as fresh
as possible despite the hectic pace of daily life. However, the avenues to achieve this often tie
people down to stationary solutions, which goes against the very idea of today's mobile
lifestyle. This is where the “Chilli-Mate” comes in, a groundbreaking innovation that enables
individuals to maintain freshness and accomplish chilling, regardless of their location, without
the need for traditional electricity.

A revolutionary product, the “ChilliMate” portable cooling pad keeps you cool and
comfortable anywhere you go. ChilliMate is a great companion for everyone who needs a
chilly touch on a hot day, whether you're a busy professional, an athlete, a parent, or just
someone who wants to feel better after an intense workout. ChilliMate represents the future of
portable cooling solutions; it is carefully developed, supported by science, and
environmentally conscious. The inspiration for this company came from observing a void in
the market, and the purpose of this research is to investigate that idea's potential, viability, and
the strategy for turning it into a household name.

The primary objective of this report is to thoroughly examine the development, and
prospective implementation of a new product in the market, demonstrating how contemporary
issues can be resolved through inventive solutions. Our goal is to combine international
finance concepts with product development to create a business that is both commercially
successful and answers a widespread need.

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Product Description
Technology and materials
1. Instant Activation:

Using endothermic reactions with “Phase Change Materials and chemicals” (Substances that
absorb and release thermal energy during the process of melting and freezing) will give us an
instant activation of the cooling effect of Chilli-Mate with no need to pre-freeze it using
electricity. The PCMs used in our product are Sodium Acetate and Ammonium Nitrate, which
are super concentrated solutions, and can maintain a cool temperature for extended periods of
time.

2. How it works?

Our Chilli-mate packs will be filled by the super concentrated liquid solution that contains
Sodium Acetate and Ammonium Nitrate, and inside the packs we’ll insert a small metal disc.
When you "click" or bend this disc, it starts a reaction that makes the solution turn from liquid
to solid. As the solution solidifies, it starts radiating coolness, making the pack cool.

To use the pack again, you typically need to boil it. Boiling returns the solid back to its liquid
form.

Design Considerations
1. Size Variance:

We will offer different sizes to meet all our customer segments’ needs – small pads for
medication, larger ones for food containers, etc.

2. Surface:

We will provide our Chilli-Mate pads with a water-resistant and waterproof surface to prevent
any moisture issues, and to also ensure our customers safety.

3. Portability:

We will make our Chilli-mate pads rollable, so it occupies minimal space when not in use.

Applications
1. Food Storage: For people who want to keep their lunch or snacks fresh.
2. Medication: Some medications require cool environments, and this can be
particularly useful for people traveling.
3. Tech Cooling: Some tech gadgets heat up; Chilli-Mate pads can be a solution to cool
them down.
4. Outdoor Activities.

Safety and Hygiene

All materials used in the conception of the product are safe for contact with food and skin,
and the pad are also easy to wipe down or wash.

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HS Code
The HS Code of our Chilli-Mate in China is: 8415, (Refrigerators, freezers, and other
refrigerating and freezing equipment, electric or other, heat pupms or other than air
conditioning machines of heading 8415.)

(https://www.seair.co.in/hs-codes/china/chapter-84-nuclear-reactors-boilers-machinery-
mechanical.aspx).

Markets Research
Operating Market
China has been selected as the best market for operations and manufacturing. Chilli-Mate's
requirements are well-suited to operating from China, particularly given the possible
complexities of the product. China is a highly favorable option due to its cost advantages,
superior manufacturing capacities, and well-established export channels to our targeted
market.

 Manufacturing strengths:

Cost-Effectiveness: China is renowned for its manufacturing capabilities, offering cost-

effective solutions due to a competitive and skilled labor market. Despite rising wages,
China’s labor market remains attractive compared to other developed countries, as per the
data from the National Bureau of Statistics of China.

Infrastructure: The infrastructure for manufacturing in China is advanced, with numerous

factories equipped for diverse product manufacturing. China has also a robust transportation
network, including the world's largest high-speed train network, which is crucial for efficient
supply chain management, as reported by the China Railway Corporation.

Supply Chain: China boasts a robust supply chain, making it easier to source chemicals and
components for our product. China's vast manufacturing landscape will perfectly
accommodate our requirements.

 Special Economic Zones (SEZs):

SEZs like Shenzhen, Guanzghou, and Shanghai provide preferential business policies, tax
incentives, and streamlined customs procedures, which can be highly beneficial for new
manufacturing setups. Data from the China Development Bank shows substantial investments
flowing into these zones, supporting a variety of industries.

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  Export & Trade:

Export Capabilities: China is the world's largest exporter of goods, as reported by the World
Trade Organization (WTO). Its well-established global logistics network can significantly
reduce shipping complexities and costs for Chilli-Mate.

Belt and Road Initiative: China's Belt and Road Initiative will offer logistical and trade
advantages when exporting to the GCC countries (targeted market). Under the Belt and Road
Initiative, China has been increasing its investments in the GCC, covering areas like
infrastructure, ports, and technology. The maritime routes and the developing overland Silk
Road Economic Belt are enhancing connectivity.

Trade Relations: China and the GCC countries have been strengthening their ties, primarily
driven by energy and trade. The bilateral trade volume between China and the GCC has
consistently increased, fostering strong economic relations between the two blocks.

 Sector Risks:

-Regulations: China is currently increasing emphasis on environmentally friendly solutions,

and our product, which doesn’t rely on traditional electricity, fits this trend. However, there
are other risks to consider, which are regulations and standards concerning chemicals in
industries to ensure environmental protection.

A new regulation on safe management of Hazardous chemicals (Decree No. 591), was issued
by the State Council in 2011, and it requires businesses that produce, store, use, sell, and
import/export hazardous chemicals to obtain permits and follow safety management
requirements. In addition to that, the ministry of ecology and environment is maintaining a
chemical substance inventory (IECSC), that lists over 45,000 chemical that are manufactured
or imported into China. It also governs the notification requirements for new chemicals and
oversees the production, importation, and utilization of these new chemical substances. It is
essential to follow the administrative procedures and obtain the necessary permits in order to
reduce difficulties and minimize associated risks.

-Copycat Products: China has a history of producing copycat products which might
challenge our product's unique selling proposition. In this situation, Intellectual Property

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Protection is crucial, using utility and design patents, Trademarks, and Trade Secrets to ensure
that Chilli-Mate's design and brand are legally protected from any form of imitation or
unauthorized replication.

 Country Risks:

-Currency Fluctuation: The Renminbi (RMB) can fluctuate based on global economic
conditions and China's monetary policy, since China operates a managed float exchange rate
system where the RMB is allowed to fluctuate within a range set by the People’s Bank of
China. In order to mitigate the risks associated with currency fluctuations, we will conduct
our transactions in USD. This approach will enable smoother trade with GCC countries, as
they have their currencies pegged to the USD. Additionally, adopting this strategy provides us
with a wider selection of financial instruments to hedge against its volatility, like derivatives,
ensuring a strong effectiveness.

A more detailed analysis on costs, logistics, and operations will be presented subsequently in
this report.

Target Market
We’re willing to export our product to the GCC countries and that is for numerous reasons:

 Market Size/Growth, and Consumer behavior: According to a report by Statista,

the population of the Gulf Cooperation Council (GCC) countries is expected to reach
approximately 65 million by the end of 2024, which presents a substantial consumer
base. Additionally, a study by the Nielsen Company on consumer behavior in the
Middle East reveals a strong preference for products that offer convenience and
innovation, which aligns well with the Chilli-Mate’s value proposition.
 Climate Factor: The World Bank data suggests that the average temperature in GCC
countries can exceed 40 degrees Celsius during summer, making products that provide
cooling solutions highly desirable.
 Market Demand Specifics: The demand for portable cooling solutions in the GCC is
not only seasonal but also year-round due to high temperatures as mentioned above.
For example, in the UAE, the demand for cooling products increases by up to 50%
during the summer months as reported by the UAE’s Khaleej Times.
 Socio-Cultural Dynamics: With the prevalence of outdoor activities such as camping
and desert safaris, especially in countries like Saudi Arabia and the UAE, products that

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 are portable and enhance outdoor experience are in demand, as indicated by tourism
statistics from the respective Ministries of Tourism.
 Consumer Spending Power: The GCC nations have a relatively high GDP per capita,
indicating strong purchasing power. For instance, the International Monetary Fund
(IMF) reports that Qatar, Saudi Arabia, and the UAE are among the top countries in
terms of GDP per capita at purchasing power parity.
 Competition Analysis: As per the analysis by Euromonitor International, the portable
cooling and refrigeration market in the GCC is moderately competitive, with few
products offering innovative cooling solutions similar to Chilli-Mate, indicating an
opportunity for market entry. In addition to that, the uniqueness of our product might
give us an edge, as we’re trying to create a blue ocean and make the competition
irrelevant by creating a new value curve for our target customers.
 Import/Export Statistics: The United Nations COMTRADE database on
international trade indicates that GCC countries import a significant volume of
refrigeration equipment, which suggests a market need that Chilli-Mate could
potentially fill.
 Logistics & trade: As mentioned previously, GCC countries have strong trade
relationships with China, facilitated by initiatives like the Belt and Road Initiative.
 Exchange rates: The pegging of GCC currencies to the US dollar provides a stable
exchange rate environment. The Central Bank of the UAE, for example, maintains the
dirham pegged to the US dollar, ensuring predictability in trade.
 Financial systems: The GCC countries have robust financial systems with significant
foreign exchange reserves, reducing the risk of default or payment delays, and making
the risk fall on the choice of the terms of payment.
 Political stability: The GCC countries are relatively stable compared to other
countries in the middle eastern area.

A more comprehensive analysis will be eventually provided in the demand market study to
estimate the demand of Chilli-mate.

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Demand market reflection
The "Chilli-Mate" has potential in the GCC markets because of favorable climate conditions,
demographic characteristics, and economic aspects as mentioned previously. Nevertheless,
our business plan entails, for a start, a deliberate concentration on three countries initially:
Saudi Arabia, United Arab Emirates, and Qatar.

In order to put our business in context, we conducted an analysis of the demand in our target
market to ascertain the appropriate level of production for Chilli-Mate.

To estimate the number of people engaged in outdoor activities or leading mobile lifestyles in
Saudi Arabia, the UAE, and Qatar, we analyzed related market sectors such as sports
equipment and fitness clubs. These sectors can serve as proxies for the level of engagement in
physical and outdoor activities, which would be relevant for our product, the Chilli-Mate
portable cooling pad.

 Saudi Arabia:
 Sports & Outdoor Market Size: The market is projected to reach about $145.60 million
in 2023, with an expected annual growth rate of 15.44% from 2023 to 2027.
 United Arab Emirates:
 Sports & Outdoor Market Size: Projected to reach $258.10 million in 2023 with a
Compound Annual Growth Rate of 6.36% from 2023 to 2027.
 Qatar:
 Sports & Outdoor Market Size: Projected to grow by 10.66% from 2023 to 2027,
resulting in a market volume of $117.70 million in 2027.

According to the statistics, the outdoor markets in all three nations are seeing rapid growth.
They offer a valuable perspective on the prospective demand for our product in these markets.
However, in order to do a more customized analysis specifically for the Chilli-Mate, more
market research, such as surveys and focus groups, is necessary. We collected data from
government papers and surveys to obtain insights into the extent of participation in physical
activities and sports in Saudi Arabia, the UAE, and Qatar to define the market size.

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  Saudi Arabia:

According to a poll conducted by Saudi Arabia's General Authority for Statistics, 48.2% of
individuals throughout the nation currently engage in outdoor sports. This yields an
approximate figure of 17 million individuals.

In 2021, the proportion of adults engaging in an outdoor activity at least once a week
increased to 29.7%, a significant rise from the 20% recorded in 2019. This indicates that there
are now more than 10 million adults actively participating in such activities.

 United Arab Emirates:

The UAE's National Sports Strategy aims to increase the proportion of people practicing
diverse sports and outdoor activities to 71% of the population.

A number of programs have been initiated, and approximately 30% of the population are
currently involved, amounting to a total of 2M individuals. Around 25% of all deaths in the
UAE occur due to cardiovascular diseases, linked to physical inactivity, indicating a potential
health-driven increase in physical activity.

 Qatar:

Qatar sponsors around 80 sports events and world-class championships on a yearly basis,
demonstrating a notable enthusiasm for sports and outdoor activities.

The Qatar Sports for All Federation implements a year-round activity program with the
objective of promoting consistent engagement in sports and outdoor activities across all age
groups. This initiative has achieved a remarkable participation rate, attracting over 35% of the
country's population, which amounts to around 875K individuals.

Based on this data, our primary target markets include mainly active individuals, and
sports enthusiasts, across all age groups. With the three countries together, we have an
estimated market of 20M people.

Export Order
Upon realizing the significant potential of our groundbreaking product, we initiated
communication with distributors in our designated areas to persuade them, establish
agreements, and commence the receipt of export orders.

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 After numerous attempts, we managed to establish contact with "Al Senidi" a prominent
distributor of outdoor and camping products in the Middle East. The company was founded in
Riyadh, Saudi Arabia, in 1962 and has since expanded its operations globally, including
offices in various countries such as China, India, and others, to facilitate international
transactions. In addition, they maintain warehouses and offices in several prominent
commercial cities around the Middle East, including Riyadh, Jeddah, and Dammam in Saudi
Arabia, Dubai in the United Arab Emirates, and Doha in Qatar.

The export order received from the three different offices in the three countries is as follows:

Product/Country SA UAE QATAR

Small Chilli-Mate 2000 1500 1000

Medium Chilli-Mate 2500 2000 1500

Big Chilli-Mate 1000 900 500

Costs Study
In our cost analysis methodology, we classified costs into three distinct categories. There are
three types of costs associated with the company: startup costs, production or activity costs,
and export transaction costs.

Costs Star-up/ Establishment Production/ Activity Export transactions

Elements - Start-up - Raw materials. - Logistics and transport.
equipment. - Semi-finished - Export taxes and duties.
- Company creation goods. - Documentations costs.
costs. - Personnel - Insurance costs.
- Studies, approach - Other - Tariffs and import taxes.
costs and launch operating - Bank charges.
marketing. expenses.

We employed such a specific approach to construct the following table, which displays the
precise value of the overall investment:

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 INVESTMENT SCHEME

Designation Amount
Production Equipment 4 581 815,00
Administrative and support areas 224 222,00
Company creation costs 99 300,00
Studies, approach costs & launch Mkg 550 000,00
Start-up working capital requirements 10 806 993,12
TOTAL INVESTMENT 16 262 330,12

The table below displays the total investment required, accounting for all costs and their
impact on the firm. The total amount is 16,262,330.12 CHY. Please refer to the accompanying
excel sheet for more detailed information on each component.

Finance plan
Our financial approach involves sourcing cash through a bank loan, as we now only own 25%
of the necessary funds, equivalent to 4,065,583 CHY.

Following extensive research, we have discovered interesting offers provided by the Industrial
and Commercial Bank of China (ICBC) in the form of "Business or corporate loans." This
type of loans is specifically designed to cater to the financial requirements of customers
interested in business launching, or production management. It can be utilized for both
working capital and business expansion, regardless of the size of the enterprise. The loan
provides a substantial credit limit of up to 30 million CHY, flexible usage, a maximum
duration of 5 years, and multiple choices for repayment. The loans are often issued at an
interest rate of 4,2% (based on the five-year LPR).

The effects of this financing method are demonstrated in the excel sheet and forecasted for the
next 5 years, and the following table demonstrates the allocation of the necessary funds:

FINANCING SCHEME

AMOUNT In %
Capital 4 065 583 25%
Investors 0%
Shareholders 4 065 583 100%
Medium- and Long-Term Credit 12 196 748 75%
TOTAL INVESTISSEMENT 16 262 330 100%

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Trade Financing Strategy
In order to ensure a secure and mutually beneficial trade process, we decided to create sales
contracts that outlines exact terms of delivery and payment, and which will be established
with our distributor, who has an office located in China with whom we will be directly
conducting business representing the three different offices in the three countries.

Terms of delivery
The terms of delivery are defined by the relevant incoterms set by the ICC, and we aim to
select the most appropriate incoterm that ensures reasonable and transparent allocation of
costs and risks to each party involved in the agreement. The reason why we have selected the
FOB (Free on board) option from the family F, which means that we are responsible for
transporting the order to a port specified by the customer. This incoterm will result in a
division of responsibilities and costs as follows:

Us Buyer
- Domestic transportation costs. - Sea freight costs.
- Loading charges. - Insurance.
- Export customs clearance. - Import customs clearance.
- Export duties and taxes. - Destination terminal handling
- Handling the goods at the port of charges.
departure. - Domestic transportation in the
importing country.
- Storage charges

Domestic transportation and logistics/ Loading/ Unloading:

Shipment Details:

 Pick-up address: Nansha area, Zhujiang management area, Xinguang street 63,
Guangzhou.
 Destination: Port of Guangzhou.
 Distance: The distance from Nansha to the Port of Guangzhou is approximately 60 to
70 kilometers.
 Total number of items: 12,900 Chilli-Mate units.
 Total weight: 7,509 kg.
 Type of truck: large-sized truck.

Transportation company: “SINOTRANS”

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 Calculation:

 Transportation: (60 km x CNY 12/km) ≈ CNY 720 (as a mid-range estimate per
truck).
 Loading/Unloading: CNY 1,000 for the entire process.
 Total Rough: CNY 720 (transport) + CNY 1,000 (loading/unloading) = CNY 1,720.

Export duties and taxes:

China, like many countries, has specific regulations regarding export duties and taxes.
However, the general practice in China is that most exported goods are exempt from export
duties. This is part of China's policy to encourage exports and support its manufacturing and
trading sectors.

There are exceptions where export duties are applied. These are typically on certain categories
of goods, such as rare and precious metals, rare earths elements, and certain types of raw
materials. However, the large category of products falling under the HS code 8415 from
China for the year 2023 are exempt, and the rates generally in China are relatively low.

The export customs clearance expenses are detailed in the attached Excel file.

As indicated in the table above, the selected terms of delivery will assign the buyer the
responsibility for the main transportation, considering their extensive knowledge and
expertise in the region, and also their established contacts with a local shipping company.
Additionally, the buyer will also be responsible for shipping each order to the appropriate
warehouse in each country of destination, as well as managing the import customs and
charges. As a result of these chosen delivery terms, mutually beneficial payment
arrangements were agreed upon.

Terms of payment
When discussing the terms of payment in a sales contract, several key points are typically
negotiated and agreed upon. The points discussed with our buyer are:

1. Payment method:

For the method of payment, we have opted for a documentary collection, also referred to as
bank collection. Our bank and the buyer’s bank in the three different countries will assist by
forwarding documents to each buyer against acceptance of a bill of exchange for each
transaction.

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FOB terms clearly define the point of risk transfer from us to the buyer. Using documentary
collection further ensures that the buyer acknowledges the obligation to pay (D/A) before
receiving the documents necessary to claim the goods. This reduces our risk of non-payment
even if it offers less security compared to D/P (since payment is deferred), but it’s a suitable
option to keep long-term relationships where there's a high level of trust between us and the
importer.

The International Chamber of Commerce (ICC) has issued a set of standardized rules and
guidelines, Uniform Rules for Collection (URC 522), along with a separate commentary (No
550) to minimize the difficulties that banks and their customers may face in connection with
documentary collections through banks. These rules should be referred to in our sales
agreements, to avoid any future confusions or problems.

We will submit shipping and other necessary documents to our bank. The bank then sends
these documents to the buyer's banks, with instructions to release the documents to the buyer
upon acceptance.

The list of necessary documents is the following:

Necessary documents
Commercial documents Transport Insurance Financial documents
documents documents
- Commercial - Ocean bill - Cover note. - Bill of
invoice. of lading. exchange.
- Pro forma
invoice.
- Packing list.
- Weight list.
- Certificate of
origin.
- Performance
and compliance
certificates

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 Other documents like import licences or cover notes must be part of the contract together with
a statement of the buyer’s responsibility to produce these documents prior to shipment.

2. Payment terms:

As prementioned the documents will be provided against the acceptance of a bill of exchange,
and we will be specifying in the bill of exchange that the date of maturity should be 90 days
post-delivery.

The terms should clearly state that the maturity of the bill of exchange is “90 days after
delivery of the goods.” This ensures there is no ambiguity about the payment due date.

3. Currency of payment:

All sales contracts with purchasers in Saudi Arabia, UAE, and Qatar will be denominated in
USD, and the invoices will also be in USD, as the currency of payment will be the USD, this
streamlines transactions. Nevertheless, in order to reduce the potential impact of currency
volatility, it is imperative that we have a robust and well-defined plan. The steps to be
followed are as follows:

 The current exchange rate is 1 USD = 7.16 CHY. However, various future forecasts and
analyses indicate that the CHY will be depreciating against the USD in the near future, and
in order to benefit from the situation and secure our transactions, we will buy an option for a
strike price equal to the current exchange rate.

The Key aspects of such strategy include:

 Currency Risk Mitigation: Purchasing an option at the current exchange rate (1 USD =
7.16 CNY) as a hedge is a proactive measure. This allows us to benefit from the
potential depreciation of the CNY against the USD. If the CNY does appreciate, we can
exercise the option to convert USD to CNY at a more favorable rate than the market rate
at that time. If the CNY depreciates or stays stable, we can choose not to exercise the
option.
 Flexibility and Control: Options provide flexibility as they give you the right, but not
the obligation, to exchange currency at the strike price. This means we can respond to

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 market conditions effectively without being locked into a contract, for example in the
case of forwards or futures.
4. Dispute resolution mechanisms:

If a disagreement arises, arbitration will be the chosen method of resolution. Therefore, it is

essential to include an arbitration clause in the contract.

Arbitration Clause: "In the event of any dispute, controversy, or claim arising out of or in
relation to this contract, including the existence, validity, interpretation, performance, breach
or termination thereof or any dispute regarding non-contractual obligations arising out of or
relating to it, the parties agree to submit the matter to binding arbitration. The arbitration shall
be conducted under the International Chamber of Commerce (ICC) rules, which are deemed
to be incorporated by reference into this clause. The seat of the arbitration shall be in China,
and the language of the arbitration shall be English. The decision of the arbitrator(s) shall be
final and binding upon both parties, and the costs of arbitration shall be borne as determined
by the arbitrator(s). The parties agree to carry out the arbitration award without delay and
waive their right to any form of appeal insofar as such waiver can validly be made."

5. Exclusivity clause:

“The Seller hereby grants to the Buyer exclusive rights to distribute, market, and sell the
Chilli-Mate cooling pads within the territories of Saudi Arabia, Qatar, and United Arab
Emirates. The Seller agrees not to appoint any other distributors, agents, or representatives to
sell the product within these territories.”

To maintain the exclusivity granted herein, the buyer needs to agree to purchase a minimum
quantity of 12900 unit of the product per year throughout the duration of this Agreement.
Failure to meet these minimum purchase requirements will result in a re-evaluation of this
exclusivity clause.

Either party may terminate this exclusivity clause upon 90 days written notice to the other
party. Upon termination, the Buyer shall cease to have exclusive rights to distribute the
product within the specified territories.

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Process flow diagram

 1.Order Confirmation: Reception of distinct purchase orders from Al Sanidi's offices in Saudi Arabia,
UAE, and Qatar.
 2.Separate Sales Contracts: Draft and signature of individual contracts with each office, detailing product
specifics, quantities, prices, FOB delivery terms, and D/A payment terms.
 4.Packaging and Local Transport: Packaging the products for export, and transportation of the goods to
the designated Chinese port, the port of Guanzghou.
 5.6. Loading and Shipping Notification: Loading goods onto the shipping vessel and notifying each Al
Sanidi office.
 7.Initiate Documentary Collection (D/A): Presenting the shipping documents along with a draft to our
local bank, outlining instructions for D/A. Our bank forwards these documents to the corresponding buyer's
bank in Saudi Arabia, UAE, and Qatar.
 8.Buyer’s Bank Notification: Upon receiving the documents, the buyer’s bank informs the respective Al
Sanidi office. The buyer (each Al Sanidi office) accepts the draft, thereby agreeing to pay at the specified
future date. Upon acceptance, the buyer’s bank releases the shipping documents.
 9.Goods Collection by Buyer: Al Sanidi uses the documents to take possession of the goods upon their
arrival.
 10.Payment on Maturity: When the draft reaches its maturity date, the buyer’s bank collects the payment
from Al Sanidi. The funds are then transferred from the buyer’s bank to our bank. Our bank credits our
account with the received payment.
 11.Transaction Completion and Closure: Confirmation of the closure of each transaction with the
respective offices.

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CONCLUSION

In conclusion, the comprehensive trade arrangement we have with Al Sanidi, encompassing

multiple offices across different countries, underscores the intricate nature of international
trade. Such setup demands meticulous planning, coordination, and execution, highlighting the
need for precision in international trade practices.

The process flow, from order confirmation to production, shipping, and payment, illustrates
the multifaceted aspects of such trade deals. It involves navigating diverse legal frameworks,
complying with varying regional customs regulations, and managing logistical challenges
across international borders.

This case exemplifies the critical need for high responsiveness and vigilance in international
trade. Staying abreast of each step, maintaining clear and consistent communication, ensuring
document accuracy, and regularly tracking and following up are essential to mitigate risks and
address potential issues promptly.

It also underscores the importance of being prepared for the unexpected. Fluctuating market
conditions, political changes, currency exchange variations, and logistical disruptions are just
a few examples of the uncertainties that can impact such transactions. A proactive approach,
coupled with a well-thought-out risk management strategy, is crucial in navigating these
challenges effectively.

In essence, this deal not only represents a significant business opportunity but also serves as a
reminder of the complexities and demands of operating in the global marketplace. It calls for
continuous vigilance, adaptability, and a deep understanding of international trade dynamics
to ensure successful and profitable outcomes.

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