四川托普信息技术职业学院

 

 

题目    瓷砖出口项目报告

Report on Polished Porcelain Tiles Export Project

          

学生姓名                    

   学生学号    2005080125              

专业方向   商务英语(国际商务英语)

指导教师                    

指导单位   四川托普信息技术学院           

 

 

 

 

 

 

 

 

                                                   2007   10    31

 

Sichuan TOP Vocational Institute of Information Technology

 

 

 

Graduation Thesis / Design

 

Title: Report on Polished Porcelain Tiles Export Project

 

Author of Thesis/Design       Li Qian              

 

Student ID No          2005080125                

 

Specialty               Business English            

International Business Direction   _

 

Thesis Advisor          Wang Xue                 

 

Advising Unit  Sichuan TOP Vocational Institute of Information Technology __

English Department

 

Date         Oct.31, 2007               

Index

Chapter 1 Abstract…………………….. ……………………………………….1

Chapter 2 Introduction……………………. ………………………………. … 2

Chapter 3 Procedures and Results………………………………………….3-32

3.1. Flow Chart of (the commodity) Export Project………………………3

3.2 Preparation for Exportation………….………………………………3-11

3.2.1. Market Research…..………………………………………………4

3.2.2. Target market, Commodity and Pricing………………………4-8

3.2.3. Customers’ Profiles………………………………………………9

3.2.4. Business Negotiations ……..………………………………… 9-10

3.3 Conclusion of Export Contract…………………………………11-15

3.4. Execution of the Contract…………………………………………16-32

3.4.1. Practice of Letter of Credit……. ……………………………16-18

3.4.2. Preparing Goods…...…………………………………………19-22

3.4.3. Export Documentation….……………………………………23-28

3.4.4. Settlement of Payment and Follow-up………………………29-32

Chapter 4  Conclusion………………… ……………………………………33

Chapter 5  Reference………………..………………………………………34

Chapter6  Acknowledgments………………………………………………..35

 

Chapter 1 Abstract

 

The report gave the procedures about exporting the ceramic tiles (polished porcelain tile, No.570, 800×800) from Guangzhou to London by Marine transportation. London is a big market, so the company did the project was to achieve the long term objective in London market.

 

With the long term objective, the company not only wanted to make profits but also had the aim of enlarging market share.

 

The company did some researches about the target market on the Internet. Some statistics showed that the ceramic tiles used for construction and decoration was quite popular in Europe, especially the polished porcelain tile and the Rustic porcelain tile. After the thorough research and comparison, London, at last was chosen to be the final target market, and the Overseas Trading Co., Ltd in London, the leading importer of Chinese ceramic tiles in Britain, was the cooperator.

 

Business negotiation between two parties went smoothly. There were some difference with each other, but at last, the both two sides reached the agreement.

 

Getting the goods ready, clearing exporting customs, chartering a ship and booking space, and preparing documents for bank negotiation also went smoothly. However the shortage and breakage of the products made the importer send out a letter for claim. After the careful investigation, the company solved the problem. When these procedures completed, the all exporting project was over, the company got the expected profit.

 


Chapter 2 Introduction

 

In order to make profit for the company, the exporting department made effort to research the target market (London). London is in large need of polished porcelain tile and the purchasing power is strong.

 

The purpose of the project was to get the long term objective rather than the short term objective. One transaction is not our final aim, and the main purpose is to get into the foreign market. Several years ago, London began to cooperate with the exporter of ceramic tiles in China. Nowadays the ceramic tiles made in china still occupy some of the market in London. So there are many opportunities for the company to get into the foreign market.

 

With the development of the society, real-estate industry is developing fast. And the people like the cool feeling of the ceramic tiles which gave the company a good opportunity to do this export.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter 3 Procedures and Results

3.1. Flow Chart of (the commodity) Export Project

The following are the flow chart of export, the company made the exporting according to these contents of the flow.

 

              Preparation before negotiation

                       

                   Business negotiation

                       

                 Signing sales contract

                       

                   Getting goods ready

                       

                Urging the importer to open L/C

                       

                   Checking L/C         

                       

          Asking the importer for amending L/C

                       

               Clearing customs for export

                       

               Charting space and booking ship

                       

                   Arranging insurance

                       

                 Making out documents

                       

           Presenting documents and obtaining payment 

                       

            Settlement of claim when possible

 

3.2 Preparation for Exportation

The purpose of this project was to establish business relationship with the importer (Overseas Trading Co., Ltd). The research report found that there were several procedures for exporting, it was necessary to choose the right target market and do an effective business negotiation. Credit is very important, every company wants to do business with the ones which is with good reputation. The company did the market research to choose the target market about the commodity and the price. Some research person went to the target market to invest the importer’s credit. At last, two parties did an effective business negotiation and reached the agreement then signed the contract.

3.2.1. Market Research

In order to make profit for the company, choosing a right target market is very important. Market research was a complicated job, at the very beginning, making profit was seemed as the only purpose of the company, then the research plan was made out, two persons who are with experience of exporting department were sent to Europe. All the jobs made the good preparation for exporting. After the careful research, it was reported that the long term objective was the purpose because of the potential market in London.

3.2.2. Target Market, Commodity and Pricing

Target Market: To choose a target market is the important essential factor, the company chose the target market according to the SWOT (to know the strength, weakness, opportunity, and the trend of the market) strategies. Compared with the U.S.A market, the Britain preferred ceramic tiles to wooden floor. The government in London encourages the people to import the ceramic tiles because of the good business relationship between China and Britain. The European style is more popular and the purchasing power in Britain is stronger. The weakness of the market is that there are many competitors in this market. The company needs to export the colorful products with high quality and quote the competitive price. In the future, maybe more competitors will be in this market, so the market in London will be saturated.

 

Commodity: To avoid possible conflicts, each effort the company made to describe the goods in the sales contract exactly as the company and the importer intended them to be.

When deciding the name, quality, quantity of the products, the following point the company considered: the right name is very important. The persons aboard carefully invested if there was the same name in London, the result showed that there was no same name in London, and the name was welcome and was in the right translation.

 

Pricing: During the procedures of calculating the price, the company met some problems and disputes. Having a good knowledge of the international market levels and making the comparison of competitor’s price among all similar products in the international market, the company found that the London government placed less restriction on importing ceramic tiles.

Owing to the long term objective the company chose, the low price strategy was finally adopted.

The company also took foreign exchange rates into consideration. As the fluctuation of exchange rates may influence the interest of the company and the importer, in this project, U.S dollars were adopted.          

 

 

 

 

 

 

 

 

 

 

Appendix 1. A Business Letter Seeking for Business Relations

 

Guangzhou Yuntong Trading Co., Ltd

806 origins Floor, 326 Huangpu Road, Guangzhou, Guangdong

Tel: (86) 020-8666178    Fax: (86) 020-86682043

 

attn: Mr. Jameson green

TO: Overseas trading Co., Ltd

25 Silverthorne Gardens

BATH Somerset

BA2 9AN

Britain

OCT.5, 2007

 

Dear sir,

 

We learn your name and address from the Internet that you are one of the leading importers of Chinese CERAMIC TILEs in Britain. It is the great pleasure of introducing ourselves. I’m the MANAGER OF THE EXPORTING DEPARTMENT of Guangzhou Yuntong Trading Co., Ltd which has long history about more than 10 years. We are the chief ceramic TILES exporter in South of China. Our company specializes in exporting ceramic TILEs to various foreign countries. we are pleased to explore the possibility of developing trading relationship with you by the commencement of some practical transactions

.

We export different types of ceramic TILES such as Rustic porcelain Polished porcelain tile Outside wall tile Interior wall tile Roofing tile Double loading tile Glass tile and so on. The advanced production technologies are from Italy; our products are with high quality and colorful appearance. To give you the detailed information about our PRODUCTS, we enclose some brochures to illustrate the types of Ceramic TILES we EXPORT.

 

We appreciate it very much if you’ll send us an early enquiry.

 

Yours sincerely,

  

 

SALLY LEE

Export manager

Appendix 2. Calculation of Price

The total quantity about 10000 pieces of products were exported to London, Britain under CIFC5% term.

When exported the products, there were so many expenses considered when the company calculated the price, such as purchasing cost, quantity, domestic charges, foreign charges and profit. The domestic charges included inland freight charges, certification charges, port charges, interest, banking charges and so on. The foreign charges included export freight, insurance premium and commission.

The following is about the price accounting.

1.      Cost:

Purchase cost: RMB90/piece     Quantity: 10000     VAT rate: 17%

           Drawback rate: 13%          

2.      Domestic charges:

       Warehouse charges: RMB 1000       Certificate charges: RMB 300

          Inland freight charges: RMB 500      Port charges: RMB 1000     

          Interest rate: 2.5‰/year, 28days

          Banking charges: advising charges RMB 200 and negotiation interest 1.25‰ (on the basis of the unit price invoice value)

3. Foreign charges:

         Export freight: USD 0.5/piece

         Export premium: All risk 0.8%   War Risk 0. 3%

    4. Profit: 15% on the basis of CIFC5%

    Exchange rate:USD1=RMB7.7/7.8

 

 

Calculate the CIFC5

1        Actual cost=Purchasing cost –drawback=RMB 90-90÷(1+17%)×13%

=RMB 90-10                                                  

=RMB 80

2        Interest=amount× interest rate/360 ×days

=RMB 90×(2.5÷360)×28

=RMB 17.5  

3                 Domestic charges=RMB(1000+500+300+1000+200)÷10000+17.5+1.25‰×CIFC5%

                      =RMB 0.3+17.5+1.25‰×CIFC5%

                      =RMB 17.8+1.25‰×CIFC5%

4        Foreign charges =RMB 0.5×7.7+CIFC5%× (1+10%) (0.8%+0. 3%)

                =RMB0. 385+CIFC5%×1.21%

CIF=Actual cost + Charges +profit

   =RMB 80+ 17.8+1.25‰×CIFC5%+ 0.385+CIFC5%×1.21% +15%×CIFC5%

   =RMB 98.185+16.335%

(1-16.335%) ×CIFC5%=98.185

CIFC5%=RMB 98.185÷ (1-16.335%) = RMB117.3549

                               = USD117.3549/7.7

                               =USD15.24/piece

 

 

 

 

 

 

 

 

 

 

 

3.2.3. Customers’ Profiles

Overseas Trading Co., Ltd is a famous synthetical trading company in London of Britain. With the good sales channels and credit and business ability in London, the company engages in textile, garment, food, chemical industry products, and household appliance, construction materials for several years. With the good management, the company has stayed in a leading place of the market.

3.2.4. Business Negotiations

It took about ten days for the company to do a business negotiation. On the first day, an E-mail was sent to the importer to ask for establishing business relationship on Oct.5, 2007, the importer sent a reply here showing the willingness of cooperation on Oct.6, 2007, and the company sent out a quotation on Oct.7, 2007. And on Oct.8, 2007, the company got the count-offer and the importer showed that every terms and condition was acceptable except the price of the products was much higher, they required a lower price. After a discussion here, the price was reduced a little, at this time, the importer accepted the terms and conditions on Oct. 10, 2007.

On Oct.15, 2007, the representative named Mr. R. Jameson on behalf of the importing company flied to China, and reached Guangzhou to sign the contract. On Oct.16, 2007, both the representatives of two parties signed the contract in the friendly atmosphere in Sheraton Hotel. The importer showed that the willingness of establishing a long cooperation with the company in the future.

The contract effected on Oct.16, 2007, it was investigated that the company would get the profit about USD22860.00

 

 

 

 

 

 

 

Appendix 3. Quotation

Guangzhou Yuntong Trading Co., Ltd

806 origins Floor, 326 Huangpu Road, Guangzhou, Guangdong

Tel: (86) 020-86661789       Fax: (86) 020-86682043

 

attn: Mr. Jameson green

TO: Overseas trading Co., Ltd

25 Silverthorne Gardens

BATH Somerset

BA2 9AN

Britain

OCT.7, 2007

 

Dear sir,

 

Thanks for your enquiry of 6 Oct, 2007. We have pleasure in quoting as follows:

COMMODITY NAME  ITEM NO.  MODEL  QUANTITY   PRICE

Polished porcelain tile  No.570     800×800   10000pieces    CIFC5%15.24/P

 

This is the most favorable price we can offer. Payment by irrevocable Letter of Credit opened in our favor with the Bank of China, GUANGDONG Branch.

 

Delivery: Within 3 months of notification of receipt of Letter of Credit. Then the Marine transportation will effect.

 

Validity: This quotation is firm for order dispatched before 10 Oct, 2007.

 

We hope that this meets with your approval and we have not much ready stock on hand.

We’re looking forward to your early reply.

 

Yours sincerely,

 

 

SALLY LEE

Export manager

 

 

 

3.3. Conclusion of Export Contract

From the market research to the business negotiation, there were some problems and disputes. At the beginning, everyone in the exporting department discussed the target market, after researched the foreign market, the project chose London as the target market. About the pricing, different person had different suggestions in the department, but the department is a harmonious collective, there is no quarrel, only discussion. At last, a low price strategy was adopted because of the long term objective. But when the importer received the quotation, they thought the price was much higher and asked for reducing. Through the discussion with the boss, the company made a concession and cut down the price. When signed the contract, both two sides were in a friendly atmosphere and wanted to do business with each other in the future.

While the company received the L/C and found that it was irrevocable non-confirmed transferable which was not in accordance with the contract, then sent an E-mail to the importer and asked for amendment.