Vietnam Coffee Market 2015

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

Date of report: 28 March 2016

Part of StoxPlus’ Market Research Report Series for Vietnam

@ 2015 StoxPlus Corporation.

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Table of Contents

Part Content Page

Executive Summary 3

1 Global Industry Overview 4 – 11

1.1 Consumption 4 – 5

1.2 Production 6 – 7

1.3 Trade 8 – 9

1.4 Price and Market Balance 10 – 11

2 Domestic Industry Overview 12 - 19

2.1 Consumption 12 – 13

2.2 Production 14 – 15

2.3 Trade 16 – 17

2.4 Export Price 18 – 19

3 Financial Analysis 20 – 22

4 Five Forces Analysis 23 – 28

5 Legal Environment 29 – 30

Part Content Page

6 Leading Import Markets 41 – 50

6.1 European Union 31 – 32

6.2 United States off America 33 – 34

6.3 Japan 35 – 36

7 Prospect 37 - 38

8 Leading companies 39 – 43

A notes on methodology 44 - 45

3

Executive Summary

The world's coffee consumption continued to grow by 1.1%

to the level of 8.9 million metric tons (MT) in 2014.

By 2019, the world’s coffee consumption forecasts to

continue to grow steadily at 2.0-2.5% per annum to reach

the level of over 10 million MT.

Vietnam's coffee consumption continued to grow.

Vietnam's coffee production, despite dropping, continued

to stay at high level of 1.7 million MT in 2014, about 5.6%

less than in 2013.

Top 05 leading companies in Vietnam coffee market

includes: Intimex Group, Tin Nghia Corporation, Louis Dreyfus

Commodities (LDC) Vietnam, Simexco Daklak and Olam Vietnam

Vietnam’s coffee consumption, 2011-2014

Source: DEPOCEN

4

Contents

Section 1: Global Industry Overview

1.1 Consumption

1.2 Production

1.3 Trade

1.4 Price and Market Balance

5


Consumption

Figure 1: The leading coffee consumers

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

Source: International Coffee Organisation (ICO) and DEPOCEN

This part is intentionally left blank

6

Contents

Section 1: Global Apparel Industry Overview

1.1 Consumption

1.2 Production

1.3 Trade


7

Brazil and Vietnam were the two largest coffee producing countries with total volume of 4.4

million MT in 2014


Production

Figure 2: Leading coffee producers

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

Source: ICO and DEPOCEN


8

Contents


1.1 Consumption

1.2 Production

1.3 Trade


9

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


Trade

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

Source: International Trade Centre (ITC) and DEPOCEN


10

Contents


1.1 Consumption

1.2 Production

1.3 Trade


11

The annual average price was about USD 3423 per MT, 30% higher than in 2013


Price and Market balance

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

Source: ICO and DEPOCEN

USD

/MT


12

Contents

Section 2: Domestic Industry Overview

2.1 Consumption

2.2 Production

2.3 Trade

2.4 Export price

13

122 thousand MT of coffee was consumed in 2014


Consumption

2011 2012 2013 2014

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

Source: DEPOCEN


14

Contents


2.1 Consumption

2.2 Production

2.3 Trade

2.4 Export price

15

Coffee production in Vietnam continued to stay at high level with 1.7 million MT in 2014 and

concentrates intensively


Production

Figure 6: Coffee Growing Area Distribution, 2014

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

Agriculture and Rural Development (DARDs), Local Exporters, and DEPOCEN


16

Contents


2.1 Consumption

2.2 Production

2.3 Trade

2.4 Export price

17

Vietnam was expected to earn about USD 3.2 billion from exporting nearly 1.5 million MT of

coffee to more than 70 countries in 2014


Trade

Figure 7: Coffee export by Vietnam: Key facts

Source: ITC and DEPOCEN

Year Volum

e

Growth Value Growth

2011

2012

2013

2014

CAGR 2011-14

Figure 8: Vietnam's Major Coffee Exporting Markets

Note: Bubble size indicates coffee export value in 2014 (million US dollars)



18

Contents


2.1 Consumption

2.2 Production

2.3 Trade

2.4 Export price

19


Export price

Figure 9: Coffee Export Price (FOB, Ho Chi Minh City)

Source: Dak Lak Trade, Investment & Tourism Promotion Center (DTITPC); Vietnam

Coffee-Cocoa Association (VICOFA); Buon Ma Thuot Coffee Exchange Center

(BCEC), Exporters, and DEPOCEN

Figure 10: Differential between Export Price and Farm-Gate Price

Source: DEPOCEN from DTITPC; VICOFA; BCEC, Exporters


20

Contents

Section 3: Financial Analysis

21

The financial ratios indicate the low and instable degree of profitability over the period 2009-

2013


Figure 11: Financial ratios in coffee trading subsector

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

Financial Ratios 2009 2010 2011 2012 2013

Profitability

Net income

Return on Equity

Return on Asset

Gross Profit Margin

Debt-to-Asset Ratio

Debt-to-Equity Ratio

Current Ratio

Quick Ratio

Cost of Goods Sold

Business Cost

Interests

Corporate Income Tax

Other Costs


22

The financial ratios indicate the low and instable degree of profitability over the period 2009-

2013 (con’t)



23

Contents

Section 4: Five Forces Analysis of Vietnam Apparel Industry

24

Threat of Entry: Degree: Week

Section 4: Five Forces Analysis

Threat of Entry

Capital

requirementLocation Relationship


25

Power of Suppliers: Degree: Moderate


Power of Suppliers

Input

Coffee cherry

and parchment

Export


26

Power of Buyers: Degree: Strong


Power of Buyers

Export

Market concentration

Undifferentiated coffee

Integration


27

Threat of Substitutes: Degree: Moderate


Threat of Substitutes

Tea Arabica and Robusta


28

Rivalry among Existing Competitors: Degree: Strong


Rivalry among Existing Competitors

Driver up

Supply


29

Contents

Section 5: Legal Environment

30

Over the past few years, there have been many strategies and policies issued in order to

facilitate the development of coffee sector

Section 5: Legal Environment

Decision No. 124/QD-TTg National program


31

Contents

Section 6: Leading Import Markets

6.1 European Union

6.2 United States of America

6.3 Japan

32

Figure 12: EU (28) Market: Key facts

Source: ICO, ITC and DEPOCEN

Section 6: Leading markets

European Union

Coffee consumption in U.S.A reached 2.5 million MT in 2014

Year Consumption Growth Import value Growth

2011

2012

2013

2014

CAGR 2011-14

Figure 13: Top Origins of Imports by EU, 2014



33

Contents

6.1 European Union


6.3 Japan


34

Figure 14: USA Market: Key facts

Coffee consumption in U.S.A grew by 1.5% in 2014 to reach the level of 1.4 million MT



United States of America

Figure 15: Figure 10 Top Origins of Imports by US, 2014

Note: Bubble size indicates coffee value in 2014 (million US dollars)



2011

2012

2013

2014

CAGR 2011-14


35

Contents

6.1 European Union


6.3 Japan


36

Figure 16: Japan Market: Key facts

Coffee consumption continued to grow in 2014 to reach 450 thousand MT in 2014



Japan

Figure 17: Figure 10 Top Origins of Imports by Japan, 2014

Note: Bubble size indicates coffee value in 2014 (million US dollars)



2011

2012

2013

2014

CAGR

2011-14


37

Contents

Section 7: Prospect

38

By 2019, the coffee consumption is forecast to continue to grow steadily at 2.0-2.5% per annum

to reach the level of over 10 million MT

Section 7: Prospects


39

Contents

Section 8: Leading Companies Profiles

8.1 Intimex Group

8.2 Tin Nghia Corporation

8.3 Louis Dreyfus Commodities (LDC) Vietnam

8.4 Simexco Daklak

8.5 Olam Vietnam

40

Section 8: Leading company profile

Figure 18: Market share by export volume, 2014

Source: DEPOCEN


41

Intimex Group


Source: Company Website

BUSINESS PROFILE

Head Office

Website

Phone

Founded year


BUSINESS PROFILE

Head Office

Website

Phone

Founded year

Tin Nghia Corporation


42

Louis Dreyfus Commodities (LDC) Vietnam



BUSINESS PROFILE

Head Office

Website

Phone

Founded year


BUSINESS PROFILE

Head Office

Website

Phone

Founded year

Simexco Daklak


43

Olam Vietnam



BUSINESS PROFILE

Head Office

Website

Phone

Founded year


44

Contents

A Note on Methodology

45

Primary

sources

Data sources for this report

Data used in this report comes from three main sources, the annual trade flows data compiled by

International Coffee Organization (ICO) and International Trade Center (ITC), and the Enterprises Census

data compiled by the Government Statistical Office of Vietnam (GSO). The first two are used in our

calculation of trade indicators while the latter is to compute the financial ratios.

In addition, the data from the Ministry of Agriculture and Rural Development (MARD), the Provincial

Department of Agriculture and Rural Development (DARD), Vietnam Coffee-Cocoa Association (VICOFA)

and other sources is also used and cited precisely in the report.

Coffee as defined in this report is the products belonging to the HS 0901 code category (the Harmonized Commodity Description and Coding

System in 2007), which includes coffee, whether or not roasted or decaffeinated; coffee husks and skins; coffee substitutes containing coffee

in any proportion. Green bean coffee is under the HS 090111 category: “not roasted and not decaffeinated”.

A Note on Methodology

Secondary

sources

46

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Vietnam Coffee Market 2015