INTERNATIONAL BUSINESS

Project Report

Exporting Pakistani Mangoes to Australia

Presented By:

Obaid Bin AbdurRehman 1411-114068

Usman Bin Qasim 1411-114142

Presented To:

Mr. ISRAR KHAN RAJA

December 22, 2016

BBA 6th (G-II)

Table of Contents Introduction................................................................................................................................. 2

Famous Mango Varieties .............................................................................................................. 2

Sindhari ................................................................................................................................... 3

Chaunsa ................................................................................................................................... 3

Why choose MANGO as an export product? ................................................................................. 4

Why Choose Australian Market? .................................................................................................. 4

Theories of Trade: ........................................................................................................................ 4

Comparative Advantage ........................................................................................................... 4

Environmental Factors of Export Country...................................................................................... 5

1. Legal ................................................................................................................................. 5

2. Cultural............................................................................................................................. 5

3. Economic .......................................................................................................................... 6

4. Political ............................................................................................................................ 7

Competition................................................................................................................................. 7

Export Strategies:......................................................................................................................... 7

Joint venture ............................................................................................................................ 7

Reason for Joint Venture .......................................................................................................... 7

Collaborative strategy .............................................................................................................. 8

Sales Promotions .......................................................................................................................... 8

Legalities and Documentations for export..................................................................................... 8

Local Supply Chain ..................................................................................................................... 10

Export Supply Chain ................................................................................................................... 11

Transportation ........................................................................................................................... 12

Packing ...................................................................................................................................... 12

Trade Barriers ............................................................................................................................ 12

Australian Govt. DIBP Restrictions .......................................................................................... 12

Tariffs and Duties ................................................................................................................... 13

Non-Tariff Barriers ................................................................................................................. 13

Benefits for home Country ......................................................................................................... 13

Benefits for host country ............................................................................................................ 13

Conclusion ................................................................................................................................. 13

References................................................................................................................................. 13

Introduction ‘Pakistan’s total mango production reaches 1.7 to 1.8 million tons annually with the lion’s share coming

from Punjab and 30 percent from Sindh. According to 2011-12 statistics of the Sindh Horticulture

Research Institute (SHRI), Mirpurkhas is considered home to mango farming, although it takes place in

TandoAllahyar and Sanghar as well. In Punjab Multan is considered as home to mangoes farming and it also comes from Bahawalpur and Rahim Yar Khan.

“According to previous surveys, Pakistan is the 5th largest producer and 3rd largest exporter of

mangoes. Pakistani mangoes enjoy a prominent position in the international market due to its taste,

popularity and demand. They are spotless and clean by appearance, free from insect damage or fungal

infection and uniform in size and ripeness.’’ (http://www.dawn.com/news/1014713)

The good news is that Pakistani mangoes have no rival in the global market in terms of quality,

sweetness, rich taste, distinct flavour, naturally woven fibres, pleasant aroma and the softness of its

contents. These unique qualities of Pakistani mangoes are inherited from a fine mix of unique soil and

season coupled with impact of flowing rivers through the world’s largest canal irrigation system that is

literally the life-blood of the country’s agriculture.”

Mango is one of the most popular and best-loved fruits worldwide. Hundreds of varieties of mangoes are known to exist in Pakistan.

Famous Mango Varieties following are the varieties with time frame in descending order

Variety Season

1 Sindhari mid May to end of June

2 Dosehri June to early July

MausmiChaunsa June to mid-august

3 Black Chaunsa mid-august to end of September

4 AnwerRatol July to mid-august

5 White Chaunsa September to end of November

Following is the description of two main and famous kinds of Pakistani Mango:

Sindhari

Mango is the king of all fruits and “Sindhari” is the KING of the KINGS.They are a generous

size and sweet but not sickeningly, so you can have more than one, unlike any of its more

sugary counterparts.Other mangoes may be more sugary but none is sweeter than the “Sindhri”.

Season: Mid-May to mid-July

Origin: Mir PurKhas

Colour: Gold

Pulp Gravity: Medium

Flavour: Slight Perfume

Fibre: 3 - 5%

Moisture Content (average): 79% after ripening; 18% before ripening

Weight: Average 1 - 3.5 pounds

Relative Humidity: 85%

Chaunsa

“Chaunsa” mango (June to August), has a golden colour when ripe. It is soft, almost fibreless

and has an aromatic pleasant sweet flavour. The unique taste and richness in its flavour makes

it a worldwide favourite. “Chaunsa” is commonly called kind of mangoes. It is considered best in its nutritional value and sweet taste.

Season: July - September

Origin: Rahim Yar Khan & Multan

Colour: Gold

Flavour: Slight perfume

fibre: 17.2 - 27.3%

Pulp Gravity: Heavy

Moisture Content (average): 78% after ripening; 81% before ripening

Weight: 1-2.3 Pounds

Relative Humidity: 85%

Why choose MANGO as an export product? Our mission to bring and provide mangoes to mango lovers in a season where there will be

no mangoes season in these specific months as Australian Summer Season (Mango Season)

is from December to February march. We will fill this gapby putting our Pakistani sweet

mangoes in the market. Pakistan is also one of the largest producer of Mango in the world.

So it has more potential and revenue in the International Market. Its best taste in all fruits

makes it more demanding in fruit lovers.

Why Choose Australian Market? With one of the most transparent and well-regulated business environments in the world,

Australia’s political stability and regulatory framework provide investors with confidence and security.

For seven years in a row, Australia has been ranked in the global top five on the Index of

Economic Freedom. The cost of remuneration for professionals and prime office space is among the most competitive in the world.

Australia’s financial services sector has following features:

assets of more than A$7 trillion, over four times Australia’s nominal GDP

the world’s fourth largest pension assets pool

the third largest liquid stock market in the Asian region after Japan and China

Strong financial market turnover.

Theories of Trade:

Comparative Advantage

We have chosen comparative advantage as theory of trade for exporting mangoes to

Australia. Comparative advantage occurs when a country cannot produce a product more

efficiently than the other country; however, it can produce that product better and more efficiently than it does other goods.

Australia’s Average production marketed over the last five years has been approximately

53,500 tonnes while Pakistan produces around than 1,000,000 tonnes, out of which Sindh

provides 50% i.e. more than 500,000 tons. Multan and Mirpurkhas are the main regions,

where we get mangoes in large quantity. The maximum production, we get from Rahim Yar Khan, where mangoes are cultivated on more than 26,000 acres.

Environmental Factors of Export Country

1. Legal

Competition laws Australia has a national statutory framework to ensure that trading is fair for businesses and

consumers. This framework is administered and enforced by the Australian Competition and

Consumer Commission (ACCC)

The Agriculture Unit was established to examine competition and unfair trading issues in

agricultural supply chains with a view to improving enforcement and compliance with the

Competition and Consumer Act 2010 (the Act) across the agriculture sector.

It has three main objectives regarding agriculture:

Identify key agricultural supply chain issues across the agricultural sector for

enforcement focus, investigation and prosecution.

Increase awareness about codes of conduct, collective bargaining and the ACCC’s

consultation processes.

Conduct specific market studies to enhance our understanding of the

competitiveness of agricultural supply chains and how this impacts on farm gate outcomes in general.

Consumer laws

The Australian Consumer Law (ACL) is the national law for fair trading and consumer

protection. The ACL commenced on 1 January 2011 and is a cooperative reform of the

Australian Government and the States and Territories through the Legislative and

Governance Forum on Consumer Affairs (CAF). The ACL is administered and enforced jointly

by the Australian Competition and Consumer Commission (ACCC) and the State and

Territory consumer protection agencies, with the involvement of the Australian Securities and Investments Commission (ASIC) on relevant matters.

The Australian Government, state and territory governments, and local governments jointly

administer environmental protection.Australian Government legislation governs the process

of assessment and approval of national environmental and cultural concerns.State and

territory environmental protection legislation apply to specific business activities.

2. Cultural

Religious Beliefs: The constitution guarantees religious freedom, and while there is no

official national religion, Australia generally is described as a Christian country. British

colonists brought the Anglican belief system in 1788, and three-quarters of the population

continues to identify with some form of Christianity, predominantly the Catholic and

Anglican faiths. Until recently almost all businesses closed for Christian religious holidays.

Extensive immigration has made Australia one of the most religiously diverse societies in the

world. Almost all faiths are represented, with significant numbers of Muslims, Buddhists,

Jews, and Hindus. Many indigenous Australians have embraced Christianity.

Language: Although Australia has no official language, it is largely monolingual with English

being the de facto national language. Australian English is a major variety of the language

which is immediately distinguishable from British, American, and other national dialects by

virtue of its unique accents, pronunciations, idioms and vocabulary, According to the 2011

census, English is the only language spoken in the home for around 80% of the population.

The next most common languages spoken at home are Mandarin (1.7%), Italian (1.5%), and Arabic (1.4%).

Values and Attitudes

Respect for the equal worth, dignity and freedom of the individual

Freedom of speech

Freedom of association

Freedom of religion and secular government

Support for parliamentary democracy and the rule of law

Equality under the law

Equality of men and women

Equality of opportunity, regardless of race, religion or ethnic background

A spirit of egalitarianism that embraces mutual respect, tolerance, fair play, compassion for those in need and pursuit of the public good

Australians tend to be fairly informal in their everyday interactions and it is common

practice to call someone by their first name only. You can address someone by their title

and their family name, but this is considered unnecessary and overly formal for most

situations. People do, however, tend to be more formal in business and professional

situations.

3. Economic

It is one of the largest capitalist economies in the world. It is dominated by service sector.

Economic growth is dependent on mining and agriculture sectors.

Ease of doing business as Australia is ranked 10th in global trade index

Continuous economic growth due to stable economy

Low unemployment rate at acceptable per capita income

Contained inflation

Very low public debt

Strong and stable financial system

Open market with minimal restrictions

4. Political

Australia is a liberal-capitalistic democracy. Here, the state keeps interfering substantially in

the economy through various roles; for instance parliament might decide to set up

importation taxes aimed to protect the national economy or environmental protection laws

aimed to protect the natural heritage of the country. Here are the few things that can be

affected by political interference:

Tariffs

Currency controls

Local content requirements

Anti-dumping rules

Export financing

Free- trade zone

Administrative policies

Competition As there are no availability of mangoes during winter in Australia so we will be the only seller

of mangoes which will be a great opportunity for us to introduce our Mangoes in Australian

Market. We will be the first Pakistani Mangoes importer in Australia as there were a lot of

legal requirements but now Australian Government allowed the importof Pakistani Mangoes in Australian market.

Export Strategies: The strategy that we would be using for our export is discussed under:

Joint venture

Joint venture is when two or more firm join together to create a new business entity that is

legally separate and distinct from its parents. It involves shared ownership. Various

environmental factors like social, technological economic and political encourage the

formation of joint ventures. It provides strength in terms of required capital. Latest

technology required human talent etc. and enable the companies to share the risk in the foreign markets. This act improves the local image in the host country.

Reason for Joint Venture

• Access to expertise and contacts

• reduced market and political risk long-term relations

• shared knowledge and resources

• overcomes host government each partner may change over Restrictions time

• may avoid local tariffs/non-tariffs

• shared risk of failure

• less costly than acquisitions confidentiality

• better relations with national

Collaborative strategy

While direct exporting may be a profitable method of foreign market entry for some

businesses we will have to determine the best channel partners for selling the fruits through

an agent and register trademarks in Australia prior to any exporting. For this reason we

would go into joint venture with a foreign host company or become a part of strategic

alliance.

An indirect channel can also be used that consists of the manufacturer, a wholesaler,

supermarkets, and the finally the consumer who will receive the product. We will sell all

fruit to a selling agent who will sell to wholesalers. An indirect channel is ideal for us

because it will relieve the company from worrying about problems of distribution and shift

focus to concentrating fully on production.

Sales Promotions Sales promotion relates to short term incentives or activities that encourage the purchase or

sale of a product or service. Sales promotion activities can be targeted toward final buyers

(consumer promotions), business customers (business promotions), retailers and wholesalers

(trade promotions) and members of the sales force (sales force promotions). Here are some

typical sales promotion activities.

• Point of Sale display material

• On-pack offers, multi-packs and bonuses

• Commissions for salesperson

• Sales competitions with prizes or awards

• Advertisement on Internet e.g. Facebook or website.

Legalities and Documentations for export

NTN: National Tax Number Certificate, which is issued by the Income Tax Department on

filing of application form accompanied with one attested copy of NIC.

Bank Account:Current Bank Account is required for export proceedings and documents.

Chamber Membership:Membership certificate of Chamber of Commerce and Industries or any relevant trade association is required.

Documents for Clearing Agent:Once the consignment, to be exported arrives at the port,

usually a clearing agent services are sought. The following documents are required to provide

to clearing agent to clear the consignment.

Packing List.

Commercial Invoice.

Letter of Credit (L/C).

Certificate of Origin which is issued by Chamber of Commerce.

National Tax Number Certificate.

Form “E”: It is a State bank form. All exports from Pakistan which are subject to Foreign

Exchange Regulations are required to be declared on form “E” which is in sets of four copies

each. The exporter should submit the full set of Form “E‟ to the bank after it has been

completed and signed by the exporter himself or his authorized agent. While certifying Form

“E‟, bank should ensure that exporters give only one address in Form “E‟. After the form is

certified by the bank, it should be submitted to the Customs/Postal authorities at the time of

shipment along with the shipping bill. The Customs authorities will detach the original copy

and after filling in the portion relating to them and affixing their seal and signature thereon

forward it to the State Bank. The Customs authorities will return the duplicate, triplicate and

quadruplicate copies to the exporter or his authorized agent who will retain the quadruplicate

for his own record and submit the duplicate and triplicate copies to the Authorized Dealer

along with the shipping documents within 14 days from the date of shipment.

Submission of Export Documents to the bank:All shipping documents covering goods

exported from Pakistan and declared on form „E‟ must be passed through the medium of

bank within 14 days from the date of shipment. The exporter must submit the duplicate

(bearing Customs seal and signature of Customs Officials with Code number) and triplicate

copies of form “E‟ along with the shipping documents, invoices etc., to the bank who had

certified the form “E‟. An extra copy of the shipper’s invoice must be attached to the triplicate

copy of the form “E‟.

Note: Now online Electronic Form-E filling system in WeBoc have launched, all export goods

declarations through Weboc always be submitted and completed by compulsory filing of the electronic E-Form.

***PAGE TURN OVER PLEASE***

Local Supply Chain

Mango Farm

Purchaing

Transportataion to Procesing

Plant

Pre Cooling/ Washing in drying farm

Grading/

Sizing

Packing

Export Supply Chain Supply chain is the system by which organizations source, make and deliver their products according to demand.

Warehouse

load containers

containers to port

export documents

shipping

custom clearance

handing over to

domestic supplier

Export Supply Chain

Transportation Transporting mangoes to Australian will be one of our main concerns, as Pakistani mangoes

have a very short shelf life which is measured in days rather than in weeks. As mangoes are

highly perishable, these are exported by air. Rather than sea cargo which increases the cost,

but Pakistan is already transporting mangoes to Europe through air, so it would not be a

problem to do the same for Australia.

Recently three different stakeholders have decided to undertake an initiative to increase the

shelf life of mangoes and thus open up new markets for local variety. They are the

Agribusiness Support Fund (ASF), the growers of Rahim Yar Khan and METRO. Which in

future give our mangoes more shelf life and will substantially lower our freight cost through

air cargo.

Packing The packers will only pack one size of fruit so that packing personnel do not have to

makedecisions and therefore, they only put pre-sized mangos into the standard carton

efficiently. Packing is done into mango cartons made of cardboard paper. Uniform

size/weight mangoes are individually wrapped in soft tissue papers before placing them into

the carton. Typical sizes of 4.5 kg net weight mango cartons are used. Smaller carton sizes

for 4 kg & 2 kg net weight pack are now also being used. The carton should have a minimum

bursting strength of 250-275 psi (pounds per square inch).Ventilation and hand holes

openings should be designed to provide adequate handling, circulation of air and maximum

cooling. Mangoes are packed into the cartons by count. These counts are 6, 8, 10, 12, 14, 16,

and 18 numbers of mangoes per carton, depending on the size of the mango. These counts

must make the minimum guaranteed net weight. Mangoes are packed side by side, or on

edge, rather than flat so as to maximize the number that will be accommodated in a single

layer.

Trade Barriers There are different types of barriers that affect the free flow of goods from the International

market to Australian market.

Australian Govt. DIBP Restrictions

All goods imported into Australia must be cleared through the border. DIBP (Australian

Government Department for immigration and Border Protection) can provide you

with information on exporting goods to Australia, such as import clearance

requirements, prohibited goods and import permits. Depending on the type and value of

the goods or products you export, there may be costs involved. These can include clearance

fees, customs duty, goods and services tax (GST) and other taxes. Some goods may carry

special restrictions or may even be prohibited from being imported. If your goods contain

industrial chemicals like cosmetics, solvents, adhesives, plastics, inks, printing and

photocopying chemicals, paints, household cleaning products and toiletries, they will

require additional registration. If your goods also fall under quarantine regulations,

the Department of Agriculture and Water Resources will need to inspect and possibly treat

them.

Tariffs and Duties

Australia has commitments under the World Trade Organization (WTO) on tariffs and tariff

quotas, export subsidies and domestic support for agricultural products.Goods imported in Australia require classification. Declaration procedures are based on self-assessment by

importers. Declarations must be made to the Australian Customs and Border Protection Service, which also enforces import restrictions.

Non-Tariff Barriers

Australian Authorities have set different rules and regulations that delay or preclude the purchase of foreign goods. These hurdles can be slow processing of import permits,

establishment of quality standards that exclude foreign producers and “buy local” policy. These different barriers demotivate the exporters to sell their product in Australian market.

Benefits for home Country • Following are some of the benefits that we would by exporting

• Exports will increase our Foreign Exchange Earning.

• We will be able to Gain Global Market Shares.

• There will be Increased Sales and Profits.

• Export will generate Jobs Opportunity in Home Country

• Mango exports will also improve our Balance of Payment.

• We will also gain New Knowledge and Experience.

Benefits for host country • Exports will create Job Opportunity in Host Country

• It will also Increase the Government Income through taxation

• Export will also Increase the Competition in host markets

• People will be able to enjoy the Benefit of Low Price in host country

• Exporting will also break down Monopoly in the host country

Conclusion As per our future predictions and financials, company will be in a great position after five

months business. This will be a big change in Australian fruit Market. With this, Indian,

Pakistani and Afghani shopkeepers and hotel owners will get a great market as well. A

shopkeeper or hotel who will have Pakistani mangoes will get a unique identification in the

market. Pakistani Mangoes will increase its sale within 2 years and spread these mangoes in

all over the Australia which can result in a largest mango importer company in Australia from

Pakistan.

References http://consumerlaw.gov.au/

http://www.mangoes.net.au/homegrown/varieties.aspx.

http://toolkit.smallbiz.nsw.gov.au/part/3/12/56.

http://buypakistanimangoes.com/All-about-Pakistani-Mangoes/How-Mangoes-can-be-

used.html.

http://rayma.com.my/pakistanmangoes/chaunsa.html.

http://rayma.com.my/pakistanmangoes/sindhri.html.

http://www.austrade.gov.au/

https://www.austrade.gov.au/International/Invest/Guide-to-investing/Running-a-

business/Understanding-Australian-business-regulation/Australian-business-and-

environment-laws

http://www.accc.gov.au/about-us/information-for/agriculture

http://www.everyculture.com/A-Bo/Australia.html

http://www.phdec.org.pk/articles/article_detail.php?id=87

http://www.phdec.org.pk/MktStrategies/Mango.pdf

http://www.tdap.gov.pk/pdf/tdap_reports_on_mangoes.pdf

http://www.icci.com.pk/data/downloads/66/210344805_1.pdf

http://www.agriculture.gov.au/import/arrival/clearance-inspection

http://www.pakissan.com/english/allabout/orchards/mango/mango.export.from.pakist

an.shtml