SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN INTERNATIONAL BUSINESS

Trade Activities of Shanker International in Africa

SUBMITTED BY: Harshiv Agarwal

MBA-IB (2010-2012) Roll No. : A1802010234

INDUSTRY GUIDE Mr. Pradeep Kumar Agarwal (Director)

FACULTY GUIDE Ms. Areej Aftab

AMITY INTERNATIONAL BUSINESS SCHOOL, NOIDA

1

Shanker International
214 Kailash Hills,New Delhi-65

TO WHOM IT MAY CONCERN

This is to certify that Mr. Harshiv Agarwal, a student of Amity International Business School, Noida, undertook a project on Trade Activities of Shanker International in Africa at New Delhi and Africa from 02nd May, 2011 to 02nd July, 2011 Mr. Harshiv Agarwal has successfully completed the project under the guidance of Mr. Pradeep Kumar Agarwal. He is a sincere and hard-working student with pleasant manners. We wish all success in her/him future endeavours. Name : Pradeep Kumar Agarwal Designation : Director Company Name : Shanker International

CERTIFICATE OF ORIGIN
This is to certify that Mr. Harshiv Agarwal, a student of Post Graduate Degree in Master of Business Administration-International Business, Amity International Business School, Noida has worked in Shanker International, under the able guidance and supervision of Mr. Pradeep Kumar Agarwal, Director, Shanker International. The period for which he/ she was on training was for 8 weeks, starting from 2nd May 2011 to 2nd July 2011. This Summer Internship report has the requisite standard for the partial fulfillment the Post Graduate Degree in International Business. To the best of our knowledge no part of this report has been reproduced from any other report and the contents are based on original research.

Areej Aftab

Harshiv Agarwal

ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. Pradeep Kumar Agarwal, Director, Shanker International, for his/her able guidance, continuous support and cooperation throughout my project, without which the present work would not have been possible. I would also like to thank the entire team of Shanker International, for the constant support and help in the successful completion of my project. Also, I am thankful to my faculty guide Ms. Areej Aftab of my institute, for her continued guidance and invaluable encouragement.

Harshiv Agarwal

TABLE OF CONTENTS
Table of Contents
Table of Contents....................................................................................................5 1.0 Executive Summary..........................................................................................8 The following report provides a slight introduction to the trade industry and then provides detail about the export procedure and the type of documents required in international trade. It also provides the barriers to trade and also discusses it various types...........................................................................................................8 For gaining maximum exposure in the company various objectives have been laid...........................................................................................................................8 The report then talks about the industry profile of international trade and provides various charts showing the countrys export and import since 1968-2008 and its consumption of a particular commodity. SWOT analysis of the trade industry is also done.................................................................................................................8 The report also provides details about the major brands available in Africa and list major companies importing ENA in Africa. The report then gives detail about the company profile and provides charts pertaining to its sales in Africa of its various product offerings. SWOT analysis of the company is also done...............9 Some important issues and challenges that the organization is facing in India and in Africa are listed....................................................................................................9 Also during my internship duration whatever has been learnt by me is provided and recommendations are given accordingly.........................................................9 By the end of the report the links to various materials that has been utilized in forming this report has been given..........................................................................9 Case Study and synopsis of the project is provided by the end of the report........9 2.0 Introduction.....................................................................................................10 Documentation................................................................................................11 Types of Documents.......................................................................................11 Commercial Documents.................................................................................11 Types of Principal Documents.......................................................................12 Types of Auxiliary commercial documents: ................................................13 Types of Regulatory Documents...................................................................15 Process of Export............................................................................................16 Export Procedure............................................................................................16 Documents Required......................................................................................16 Procedure of an Exporter in India.................................................................18

Import ...............................................................................................................19 Import Procedure as of Africa (Ghana).........................................................20 SCAN OPTION..................................................................................................21 Tariffs and Import Taxes.................................................................................21 Customs Valuation..........................................................................................21 Barriers to Trade..............................................................................................21 Tariffs....................................................................................................................22 Ad valorem tariffs..................................................................................................22 Non-tariff barriers to trade.....................................................................................23 Import licenses......................................................................................................23 Export licenses......................................................................................................23 Import quotas........................................................................................................23 Subsidies...............................................................................................................23 Voluntary Export Restraints..................................................................................23 Local content requirements...................................................................................23 About Ghana .............................................................................................23
Judicial system of Ghana..........................................................................24 Politics......................................................................................................24 Health......................................................................................................28

Education.........................................................................................................30 Ghana has bilateral relations with many countries including India..........30 The broad objectives include maintaining friendly relations and cooperation with all countries that desire such cooperation, irrespective of ideological considerations, on the basis of mutual respect and noninterference in each other's internal affairs...........................................31 Export from India and import to India from Ghana of goods is increasing day by day and is strengthening the ties between the 2 countries...........31 2.1 Objectives of my project...........................................................................32 Learn about the various documents that are required in international trade........33 Learn about various registrations required to be done before beginning to export/import.........................................................................................................33 To learn about various products that the Company deals in................................33 To learn how the company deals with its clients..................................................33 To learn about the type of market the company is dealing with and try to get to know the demand and how to tap such demand..................................................33 To learn about its competitors and come up with new ideas to promote the product..................................................................................................................33 Learn how the funds are allocated in a firm to various activities. ........................33

Learn how the funds are transferred across international border.........................33 Learn about the financial assistance available to the company i.e. pre-shipment and post-shipment finance. Also get to know if the company has undertaken any financial help and their plans to disburse it...........................................................33 3.0 Industry Profile................................................................................................34 3.1 Literature Review.......................................................................................34 3.2 Major Brands Available in Ghana............................................................36 3.3 Growth Chart..............................................................................................37 ..............................................................................................................................38 ..............................................................................................................................40 Chart 7: Ghana consumption of Iodized Salt 2002-2008......................................40 3.4 SWOT..........................................................................................................41 4.0Company Profile...............................................................................................43 Literature Review..................................................................................................44 Historical Analysis.................................................................................................49 Growth Chart.........................................................................................................50 SWOT....................................................................................................................51 5.0 Issues and challenges facing the organization...............................................52 Some of the Common Problems...........................................................................53 Problems in Africa................................................................................................54 6.0 Reflections on what has been learned during the placement experience......55 7.0 Recommendations..........................................................................................57 8.0 Bibliography....................................................................................................59 9.0 Annexure.........................................................................................................61 10.0 Case Study....................................................................................................63 11.0 Synopsis........................................................................................................68

1.0 Executive Summary

The following report provides a slight introduction to the trade industry and then provides detail about the export procedure and the type of documents required in international trade. It also provides the barriers to trade and also discusses it various types. For gaining maximum exposure in the company various objectives have been laid. The report then talks about the industry profile of international trade and provides various charts showing the countrys export and import since 1968-2008 and its consumption of a particular commodity. SWOT analysis of the trade industry is also done.

The report also provides details about the major brands available in Africa and list major companies importing ENA in Africa. The report then gives detail about the company profile and provides charts pertaining to its sales in Africa of its various product offerings. SWOT analysis of the company is also done. Some important issues and challenges that the organization is facing in India and in Africa are listed. Also during my internship duration whatever has been learnt by me is provided and recommendations are given accordingly. By the end of the report the links to various materials that has been utilized in forming this report has been given. Case Study and synopsis of the project is provided by the end of the report.

2.0 Introduction

International trade is exchange of capital, goods, and services across international borders or territories. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increase in international trade is crucial for globalization. If there is no international trade, nations would be limited to the goods and services produced within their own borders. The term Export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export. In International Trade, "exports" refers to selling goods and services produced in home country to other markets.

10

Documentation ADS refers to Aligned Documentation System, which is the internationally accepted documentation system. ADS uses a Master Document that contains the information common to all documents forming part of the aligned series. Types of Documents The export documentation framework in India can be best understood by classifying export documents in the following two categories: Commercial documents Regulatory documents.

Commercial Documents These documents have their origin in Custom of Trade in international commerce and are used by exporters/importers to discharge their respective legal and other incidental responsibilities under sales contract. There are 16 commercial documents out of which 8 are principal and 8 are auxiliary document The objectives of Commercial documents are: To effect physical transfer of goods from the exporters place to the importers place. To transfer property and title of goods from the exporter to the importer

11

 Realization of export proceeds from the exporter to the importer. There are 2 types of Commercial documents Principal commercial documents These are the eight documents, which are required to be sent by the exporter to the importer. Auxiliary commercial documents The remaining eight documents, other than principal documents, are known as auxiliary export documents. Types of Principal Documents Commercial invoice A commercial invoice is the sellers bill for merchandise of goods sold by him. Invoice contains all the particulars and details in respect of name and address of seller (exporter), name and address of buyer (importer), date, exporters reference number, importers reference number, description of goods, price per unit at particular location, quantity, total value, packing specifications, terms of sale (FOB, CIF etc), identification marks of the package, total number of packages, name and number of the vessel or flight, bill of lading number, place and country of destination, country of origin of goods, reference to letter of credit, if opened, terms of payment, and finally signature of the exporter etc. A commercial invoice is used to calculate tariffs, international commercial terms (like the Cost in a CIF) and is commonly used for customs purposes. Packing Note and Packing list Packing note refers to the particulars of contents of an individual pack while packing list is a consolidated statement of the contents of the total number of cases or packs. A packing note contains the following details: Date of packing Number of packing note Number of case to which it relates to Contents of case in terms of quantity and weight 12 export

Marking numbers Name of exporter Name of importer Importers order number Number and date of bill of lading Name of vessel/flight

Certificate of inspection Any independent firm can conduct the inspection to ensure that the goods conforms to the buyers criteria Certificate of insurance/insurance policy It is the document certifying the insurance of the goods sent in case of any damage being caused to the goods. Bill of Lading/Airway bill/Combined transport document It is the most important document as it defines the title of the goods. It is issued by the shipping company or his agent acknowledging the receipt of cargo on board. This is an undertaking to deliver the goods in the same order and condition as received to the consignee or his agent on receipt of freight. Certificate of origin It is a signed statement certifying the country of origin of the goods being sold. Bill of exchange It is an instrument in writing containing an unconditional undertaking, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument Shipment advice Letter or form sent by an exporter to a foreign buyer informing that the shipment of the ordered goods is on its way Types of Auxiliary commercial documents: These documents are required to prepare/procure the principal commercial documents and include: 13

 Proforma invoice The Proforma invoice contains details such as name and address of the exporter, name and address of the intending importer, nature of goods, mode of transportation, unit price in terms of internationally accepted quotation, name of the country of origin of goods, name of the country of final destination, period required for executing contract after receipt of confirmed order and finally signature of the exporter. Shipping instructions This document provides a check list of various instructions an exporter may like to give to the the shipping agent.An exporter can accoirdingly use this document to convey the desired shipping instructions to the agent in the form of this document. Insurance declaration An insurance declaration page is a piece of paper which provides basic information about an insurance policy. Intimation for inspection This is a prescribed form of notice by the Export Inspection Agency. Shipping order This is a reservation slip issued by the shipping line at the time of reservation of shipping space for a particular export shipment. Mates receipt It is a receipt issued by the Mate(Chief Officer) of the ship acknowledging the loading of cargo on the ship. This receipt states the condition in which the goods are received. Application for certificate of origin This is the application form submitted to the Chamber Commerce/authorized agency for the issue of certificate of origin. Letter to bank for negotiation/collection of documents of

14

This is a standard letter which gives all the details that can be possibly be given to the bank at the time of negotiation/collection of the shipping documents.

Types of Regulatory Documents These are prescribed by various government departments/bodies for compliance of formalities under relevant laws governing export transactions. There are 9 regulatory documents associated with the pre-shipment stage of an export transaction. Out of them, only 4 have been standardized. These include: Exchange Control Declaration Form-GR Form Every exporter is required to declare to RBI the full export value of the shipment and an undertaking that the full export proceeds shall be realized within a period of 6 months. Freight Payment Certificate This is a certificate which indicates that the freight has been paid. It is like a receipt for the payment of the freight. Insurance Premium Payment Certificate This is like a receipt for the payment of the insurance premium.

ARE I/ARE II Forms This document is used for obtaining the approval of the Central Excise Authority to remove the goods from the factory for sending export shipment. Shipping Bill/Bill of Export This is the most important document required by the customs authority for allowing exports. It is used when the shipment is sent by Sea/Air and the Bill of Export is used when the shipment is sent by road.

15

Port Trust Copy of Shipping Bill/Export Application/Dock Challan An exporter has to pay the port and dock charges when the shipment is sent by sea.

Receipt of Payment of Port Charges This receipt is issued by the Port Trust Authority when the supplier pays for the port and dock charges.

Vehicle Ticket This is an Entry Pass issued by the Port Trust Authority to the shipper to allow the latter to bring the export cargo to the port for their dispatch to the importer.

Process of Export Methods of export include a product or good or information being mailed, handdelivered, shipped by air, shipped by boat, uploaded to an internet site, or downloaded from an internet site. Exports also include the distribution of information that can be sent in the form of an email, an email attachment, a fax or can be shared during a telephone conversation. Export Procedure Documents Required

16

Certain documentation takes place while exporting from India. Special documents may be required depending on the type of product or destination. Certain export products may require a quality control inspection certificate from the Export Inspection Agency. Some food and pharmaceutical product may require a health or sanitary certificate for export. Shipping Bill/ Bill of Export is the main document required by the Customs Authority for allowing shipment.

Usually the Shipping Bill is of four types: Duty free shipping bill This type of shipping bill is printed on white paper and used for the goods for which neither duty nor cess is applicable. It is also used for the goods manufactured out of material imported under the duty free import. Dutiable Shipping bill - This type of shipping bill is used for the goods subject to export duty/cess on which duty drawback will be either allowed or not allowed. This is to be printed on yellow paper.

Drawback Shipping Bill This type of shipping bill is to be used for the export of goods on which Duty Drawback is available or to be made available for fixation. It is to be printed on green paper. Shipping Bill for Shipment of Excise Bond- This type of shipping bill is used when goods are imported for re-export and kept in bond. This is to be printed on blue paper. Coastal Shipping Bill Export Coastal shipping Bill This is used for shipment of goods from one port to another by sea within India The following are the documents required for the processing of the Shipping Bill: GR forms (in duplicate) for shipment to all the countries. 4 copies of the packing list mentioning the contents, quantity, gross and net weight of each package. 4 copies of invoices which contains all relevant particulars like number of packages, quantity, unit rate, total f.o.b./ c.i.f. value, correct & full description of goods etc. Contract, L/C, Purchase Order of the overseas buyer. AR4 (both original and duplicate) and invoice.

17

 Inspection/ Examination Certificate. The formats presented for the Shipping Bill are as given below: White Shipping Bill in triplicate for export of duty free of goods. Green Shipping Bill in quadruplicate for the export of goods which are under claim for duty drawback. Yellow Shipping Bill in triplicate for the export of dutiable goods. Blue Shipping Bill in 7 copies for exports under the DEPB scheme.

Procedure of an Exporter in India Obtain the Purchase order from the buyer. Sale order from seller Apply for permission from state excise collector Deposit export fee @ 25p/ltr. By treasury challan in SBI After obtaining challan apply for permission from collector for state excise. After collecting permit, arrange for transport of goods. 18

 Loading the barrels in truck. Deposit 1 challan for excise escort Obtain an escort order from state excise. Commercial Invoice of distillery and out gate pass. Dispatch All trucks for Sea Port for onward shipment Provide our invoice and packing list and CHA on the basis of these docs, he will file shipping bill with customs with FMS chapter-3 declaration (declaration is imp to avail 3% duty credit scrip). CHA will arrange containers for loading of cargo (goods dispatched by us) with plywood(timber). CHA will get the cargo loaded in containers. He will arrange custom clearance and stuffing(sealing) by submitting necessary documents like our invoice, packing list, shipping bill & declaration. Cha will provide EP copy, AR-1(Excise exemption certificate used for availing excise exemption on procurement of barrels) duly discharged by custom officer and will also help in getting duty drawback released in our favor. CHA will collect OBL(3 copies in original) from shipping line and 3 duplicates of OBL and send the same to us or to Africa. CHA will also arrange for hazardous approval. Also require Certificate of Origin(if specified by importer). Exchange control copy(for submission to bank, similar to shipping bill).

Import The term import is derived from the conceptual meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import Africa Procedure for Import Clearance. Documents Required For Clearance of Imported Goods in Africa Original Bill of Lading/Airway Bill

19

 Attested Invoice (Customs Form # C.61) Packing List Import Declaration Form (IDF) Final Classification and Valuation Report (FCVR) Tax Clearance Certificate (issued by the Internal Revenue Service) Taxpayers Identification Number (TIN) Permits and Licenses as appropriate Import Procedure as of Africa (Ghana) GHANA CUSTOMS MANAGEMENT SYSTEM (GCMS) PROCEDURES

Purchase an IDF from any office of the Ministry of Trade and Industry. Submit completed IDF together with Bill of Lading or Airway Bill, Invoice and Packing List to the appropriate Destination Inspection Company (DIC) depending on the country of import of the goods. Obtain FCVR from DIC. Submit declaration electronically to Ghana Customs Management System (GCMS) through the Ghana Community Network (GCNet) where the facility is available or

Purchase and complete Single Administrative Document (SAD) at the Station of import (usually overland) where the GCNet facility is not available. On validation of the declaration, or after acceptance of SAD,pay relevant duties at the bank (where applicable).

Proceed to the Longroom with hard copy of declaration for further Processing by Compliance Officer or Submit pay-in slips together with SAD to the Customs Cashier for processing Proceed to the Outdoor (cargo section) for examination and or release of goods.

20

N.B. Examination of goods may be by a scanner or conducted physically. Post clearance verification may be carried out by Customs at the importers premises as and when so determined.

SCAN OPTION

If your container is to be scanned, then deposit the declaration, DO and the interchanging [evidence of dropping container on the truck] at the CEPS office at the Scanning Area. Pick up your Scan number [appointment sheet] from the Scan operations office and wait for your turn. Present the Appointment sheet to the Check-In Agent at the entrance of the scanner. Confirm final clearance of container after the scan at the CEPS office at the scanning area.

Tariffs and Import Taxes Ghana is currently using the Harmonized Commodity Coding System (HS) in classifying goods. Taxes assessed on the basis of weight, value or volume are subject to change annually. Goods arriving in country may be subject to import duties, sales tax, special duties, and import excise duty. Duties are imposed on certain categories of exports as well.

Customs Valuation In general, all imports are subject to customs duties. Exemptions for government, privileged persons, organizations and institutions are provided by law. The valuation of imports for the purpose of assessing ad valorem tax is currently done based on the Customs Valuation Code (CVC) assessment method. Barriers to Trade

21

Trade barriers include tariff and trade blocks with international trade. The barriers can take many forms, including the following terms that include many restrictions in international trade within multiple countries that import and export any items of trade. Tariffs Ad valorem tariffs It is a set percentage of the value of the good that is being imported. o Specific tariff It is a tariff of a specific amount of money that does not vary with the price of the good. o A revenue tariff It is a set of rates designed primarily to raise money for the government. Example: A tariff on coffee imports imposed by countries where coffee cannot be grown, for example, raises a steady flow of revenue. o A prohibitive tariff It is one so high that nearly no one imports any of that item. o A protective tariff It is intended to artificially inflate prices of imports and protect domestic industries from foreign o An environmental tariff It is similar to a 'protective' tariff, is also known as a 'green' tariff or 'eco-tariff', and is placed on products being imported from, and also being sent to countries with substandard environmental pollution controls. o A retaliatory tariff It is one placed against a country who already charges tariffs against the country charging the retaliatory tariff (e.g. If the United States were to charge tariffs on Chinese goods, China

22

would probably charge a tariff on American goods, also). These are usually used in an attempt to get other tariffs rescinded. Non-tariff barriers to trade Import licenses An import license is a document issued by a national government authorizing the importation of certain goods into its territory. Export licenses A document indicating that a government has granted a licensee the right to export specified goods to specified countries. Import quotas An import quota is a type of protectionist trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. Subsidies Financial assistance given by one person or government to another Voluntary Export Restraints A voluntary export restraint (VER) or voluntary export restriction is a government imposed limit on the quantity of goods that can be exported out of a country during a specified period of time. Local content requirements Local content requirements specify that firms must produce some portion of a good domestically. About Ghana

Ghana got its independence in 1957 from the United Kingdom. Ghana before Independence on March 6, 1957 was called the Gold Coast. Ghana has a long history. It was ruled by many people belonging to different countries viz. Portuguese, Dutch then came in the British and Swedes and 23

Danes. Ghana got its independence in 1957 which made it the first sub-Saharan African nation to do so.

Government At the time of independence Ghana was created as a parliamentary democracy and then was converted into military and then into civilian government. In early 90s Ghana saw its presidential election for the Fourth Republic whose constitution divides powers among a president, parliament, cabinet, council of state, and an independent judiciary. The government is elected by universal suffrage; however, the legislature is not proportionate, with low-population districts receiving more representatives per person than those with high populations. President Vice-President Speaker of Parliament Chief Justice John Atta Mills John Dramani Mahama Joyce Bamford-Addo Georgina Theodora Wood

Judicial system of Ghana

The legal system is based on British common law, customary (traditional) law, and the 1992 constitution. The court hierarchy consists of Supreme Court of Ghana, courts of appeal, and high courts of justice. Then comes circuit, magisterial, and traditional courts.

Politics
Political Parties came into being in the mid 1992. There are major 2 political parties opposing each other viz. National Democratic Congress and the New Patriotic Party and the most famous the Convention People's Party. Economy of Ghana Ghana is well endowed with natural resources such as cocoa, oil, timber, diamond, bauxite and manganese. Even though Ghana is rich in oil and is said to contain nearly 3 billion barrels of light oil, but has been unable to tap to a large 24

extent such huge deposits till now and is expected to earn about 6% of the revenue for the year 2011. Ghanas economy rely heavily on agriculture which accounts for 37.3% of GDP and provides employment for 56% of the work force. There are very few manufacturing firms in the country and hence the countrys need of food and drinks are met heavily by imports from various countries. Banks in Ghana There are various banks that are available in Ghana totaling to 27 banks. The Central Bank Bank of Ghana Commercial Banks Ghana Commercial Bank Standard Chartered Bank (Gh) Ltd. Barclays Bank (Gh) Ltd. SG-SSB Limited Metropolitan Allied Commercial Bank The Trust Bank Zenith Bank, Intercontinental Bank, Standard Trust Bank, Fidelity Bank, Guaranty Trust Bank (Ghana) Limited Development Banks National Investment Bank

25

 Agricultural Development Bank International Commercial Bank the Trust Bank Prudential Bank Amalgamated Bank Ghana Commercial Bank ARB Apex Bank Merchant Banks Merchant Bank of Ghana Ltd. Ecobank Ghana Ltd. Continental Acceptances Ltd. First Atlantic Merchant Bank CAL Bank HFC Bank

Geography Ghana is located on the Gulf of Guinea and mostly have warm climate. It is surrounded by 3 countries viz. Togo, Ivory Coast , Burkina Faso and a beautiful Atlantic Ocean. Ghana is divided into 10 administrative regions and subdivided into a total of 170 districts. The regions are: o Ashanti, capital Kumasi

26

o Brong Ahafo, capital Sunyani o Central, capital Cape Coast o Eastern, capital Koforidua o Greater Accra, capital Accra o Northern, capital Tamale o Upper East, capital Bolgatanga o Upper West, capital Wa o Volta, capital Ho o Western, capital Sekondi-Takoradi Ghana's highest point is Mount Afadjato which is 885 m (2,904 ft) and is found in the Akwapim-Togo Ranges. Ghana sees 2 main seasons in Ghana: the wet and the dry seasons. In Northern Ghana it rains from March to November while in the south, including the capital Accra, experiences the season from April to mid-November.

Demographics Ghana has about 24million people inhabiting its various regions and has various ethnic groups. The official language is English however, most Ghanaians also speak at least one local language like Chui. The ethnic groups in Ghana are The Akan Mole-Dagbon 27

 Ewe Ga-Dangme Guan Gurma Gurunsi Mande-Busanga Other tribes

Health
As of 2009, life expectancy at birth is about 59 years for males and 60 years for females with infant mortality at 51 per 1000 live births. The birth rate is about 4 children per woman.

Religion
Christianity is the main religion in southern areas, while Islam remains the most populous in the northern regions.The relation of Christian and Muslims is very peaceful

Culture and media Ghanaian culture is a mixture of all its ethnic groups, the Ashanti, Fante, Akyem, Kwahu, Ga, Ewe, Mamprusi and Dagomba, among others. Festivals in Ghana Homowo Odwira,

28

 Aboakyer, Dodoleglime, Hogbetsotso, Tedudu, Deza Sandema. Favourite Sport Football is the most loved sport of Ghana. Recently the football team participated in FIFA World Cup and showed great entusisam and talent and made its way to the quarterfinal. Ghana also has given the world great boxers Azumah Nelson, Nana Yaw Konadu. Ghana also has a successful hockey team winning tournaments such as the Afro-Asian cup. Textiles are very important in Ghanaian culture and are used to make traditional and modern attire. Different symbols and different colours mean different things. Kente is one of the most famous of all the Ghanaian cloths Music Ghana has diverse music. The sound varies from ethnic group and region. Some of the popular instruments are: talking drum goje fiddle koloko lute, atumpan log xylophones Popular Music Genre Afro-jazz Highlife

29

 Hiplife Dance Styles of Ghana bamaya adowa kpanlongo klama agbadza atsiagbeko atsia bbb

Education
Ghana has a 6-year primary education system beginning at age six, Ghana has 21,530 primary schools, 8,850 junior secondary schools, 900 senior secondary schools and 119 public and private colleges. Gender Male Females Literacy Rate 71.7% 58.3%

Sea Ports Ghana has 2 sea ports viz. Tema located on east coast of Ghana and Takoradi. Foreign Relation of Ghana Ghana has bilateral relations with many countries including India. It has certain Guiding principles and objectives for its foreign policy Ghana's foreign policy since independence has been characterized by a commitment to the principles and ideals of nonalignment and PanAfricanism i.e. complete independence from the policies and alliances of both East and West and support for a worldwide union.

30

PNDC made many attempts to implement these ideals and principles. The government as of today believes that its is the right of people to pursue their economic and social development free from external interference. The broad objectives include maintaining friendly relations and cooperation with all countries that desire such cooperation, irrespective of ideological considerations, on the basis of mutual respect and noninterference in each other's internal affairs. Another principle that Ghanas foreign policy has is to maintain close relations with its neighbors as they together share long history and similar culture. Ghana Foreign Relations with various countries Burkina Faso Ethnic ties between these 2 countries grew stronger with the easy border crossings and free exchange of goods and services between the 2 countries. Also there was a improvement in road, air, and telecommunications links. Cte d'Ivoire The relation between these 2 countries improved after the settlement of the Ghana-Ivory Coast border in 1989. Thereafter worked to improve the transportation and communication links were improved. India Indias role in international relations with particular reference to Africa has come of age. The special relationship between India and Africa was strengthened at the India-Africa forum summit held in April 2008 at New Delhi. Indo-Ghana relationship have traditionally been warm and friendly.It is being reported that India has the highest new large projects in Ghana. Indians are not only investing in the manufacturing and commercial sectors of the country, they are also investing in the financial sector. The IT technology is also being transferred from India to Ghana showing a great improvement in Indo-Ghana relations. Export from India and import to India from Ghana of goods is increasing day by day and is strengthening the ties between the 2 countries.

31

2.1 Objectives of my project

32

Learn about the various documents that are required in international trade. Learn about various registrations required to be done before beginning to export/import. To learn about various products that the Company deals in. To learn how the company deals with its clients. To learn about the type of market the company is dealing with and try to get to know the demand and how to tap such demand. To learn about its competitors and come up with new ideas to promote the product. Learn how the funds are allocated in a firm to various activities. Learn how the funds are transferred across international border. Learn about the financial assistance available to the company i.e. pre-shipment and post-shipment finance. Also get to know if the company has undertaken any financial help and their plans to disburse it.

33

3.0 Industry Profile

3.1 Literature Review Review of literature gives the guidelines from the past researchers and provides

34

foundation to the theoretical frame work for the present investigation. The review of past literature makes the investigator to get an insight in to the methods and procedures to be followed.

Paper: A Literature Review on the Relationship between Foreign Trade and Economic Growth Author: Huan chen Year: 2009 The Author studied the relationship between foreign trade and economic growth. He first reviews the theories of the relationship between foreign trade and economic growth, and then sum up the main arguments of modern empirical economics. Finally, the author makes a brief comment and put forward some questions that should be explored in depth in this area.

Paper: Does Export and Productivity Growth Linkage Exist? (Evidence from the Indian Manufacturing Industry) Author: Chandan Sharma and Ritesh Kumar Mishra Year: 2009 Both the author examines the relationship between export market participation and total factor productivity growth at the firm level, using a representative sample of Indian manufacturing firms for the period 1994-2006. They also investigate the productivity differences between exporting and non-exporting firms during different phases of transition in export market.

Paper: Export Growth in India: Has FDI Played a Role? Author: Kishor Sharma

35

Year: 2000 In this paper the author using annual data for 1970-98 investigated the determinants of export performance in India. The results of the study suggest that demand for Indian exports increases when its export prices fall in relation to world prices. Furthermore, the real appreciation of the rupee adversely affects India's exports. Export supply is positively related to the domestic relative price of exports and higher domestic demand reduces export supply. This suggests that tight monetary and fiscal policies are necessary especially at the time of high growth to check domestic prices and demand pressure. Foreign investment appears to have statistically no significant impact on India's export performance although the coefficient of FDI variable has a positive sign. Similarly, we find no evidence to claim that the level of infrastructure has an impact on export supply.

3.2 Major Brands Available in Ghana * Major Brands of Salt Gourmet Salt (Shanker Internationals Brand) Tata Salt Annapurna Salt Cerebos Iodated Table Salt

* Local & Major Brands of Alcohol Status (Shanker Internationals Brand) 8pm Dewar Johnnie Walker Guinness Club Beer

36

Star Beer Almo Bitter

* Major importers of ENA XLNC VENTURES NWHL West coast distilleries Baron distilleries Midland international.

3.3 Growth Chart

Chart 1:Ghana export growth chart from 1997-2010

37

Chart 2: Ghana import growth chart 1997-2010

Chart 3: Transit traffic at Tema port 1997-2010

38

Chart 4 :Cargo Traffic at Tema port 1997-2010

Chart 5: Total number of vessels handled at Takoradi port every year since 20012010

39

Chart 6: Total import/export from Takoradi Port 2001-2010

Chart 7: Ghana consumption of Iodized Salt 2002-2008

40

GDP Growth Rate: Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 GDP - real growth rate 5.80 % 4.70 % 5.40 % 5.90 % 6.00 % 5.50 % 7.30 % 4.10 % 4.70 % Rank 24 65 69 69 71 96 30 45 68 Percent Change Date of Information 2002 est. -18.97 % 2003 est. 14.89 % 2004 est. 9.26 % 2005 est. 1.69 % 2006 est. -8.33 % 2007 est. 32.73 % 2008 est. -43.84 % 2009 est. 14.63 % 2010 est.

Table 1 3.4 SWOT Strengths Improvement in Logistics. Advanced machinery & technology is there. Improved Logistics. Benefits the consumer by providing varieties into the market at lower cost. Foreign Exchange gains Financial Status Large number of buyers and sellers are available Weakness Involves huge investment to start the business. Structural Unemployment may occur Lack of Expertise in trading

41

Opportunity International trade has led to the economic development of not only the importing country but also the country that is exporting. A huge potential exists in the whole world for trading purpose. Also removal of trade restrictions has made it easier for the world to trade with each other. Threats Exchange rate fluctuations always pose a threat in this industry. Payment & Delivery of goods may or may not be received on time.

42

4.0

Company Profile

43

Literature Review
Shanker International is an export firm based in New Delhi, India. At present it deals in export of 3 products and has a large number of satisfied customers. As an exporter, we have been able to achieve confidence of our buyers, by providing them the quality products at reasonable rate. Our aim is not merely to get the turnover, but also to get total satisfaction of our customers. Now, India is emerging as an Industrial Nation, and is able to produce almost all kind of goods at reasonable rate and best quality. Export is one of the most lucrative business activities in India. The government also provides various incentives to the exporter for earning valuable foreign exchange for the country Even though new in the business the organization due its small but dedicated and hardworking staff has been able to capture a good amount of market share and has made its competitors feel its presence in the market. The organization has faced various difficulties and has tackled every situation firmly and has been able to cater to the demand of its clients very well. It also has as sister firm in Africa viz. Sparrows Worldwide Ltd. Currently it is exporting these products to its clients in West Africa . About Management Team The Top level management comprises of 2 directors and an authorized signatories. The Director Mr. Pradeep Kumar Agarwal heads the organization in India with his counterpart heading the organization in Africa. He has been into trading industry for more than 28yrs. In his early time he used to sell/deliver Filter cloth to industries and later setup cement plant in 1988 at Ghaziabad. Manufacturing cement from basic raw material Limestone, Coke Breeze, Gypsum, Latrite, Iron ore, Clay etc. He then setup his plants in Jammu in 1997 and in Nepal in 2002. He then co-founded ACME in year 2007 at Palwal & handles important functions and Managing Trusty.

44

Various Products Salt Also known as table salt or rock salt. It is composed of sodium chloride (NaCl).Salt is one of the most important food seasoning of human consumption and has a property to preserve food. Iodized salt is table salt mixed with a minute amount of various iodinecontaining salts which prevents iodine deficiency. Company is providing Triple Refined Free Flowing Iodized Salt by the name of Gourmet.

45

 Whisky Whisky (Scottish English) or whiskey (Hiberno-English) is a type of distilled alcoholic beverage made from fermented grain mash. Different grains are used for different varieties, including barley, malted barley, rye, malted rye, wheat, and maize (corn). Whisky is aged in wooden casks, made generally of white oak, except that in the United States corn whiskey need not be aged. Indian whisky is an exception, where grain fermentation is not a requirement and the most common basis is fermented molasses. The organization has secured the rights as the sole-seller of Status Whisky in Africa . This whisky is more than 10yrs older.

46

 Extra Neutral Alcohol E.N.A. (Extra neutral alcohol) is the alcohol produced by taking extraordinary precaution during the process of redistribution of rectified spirit after the addition of chemicals, and treatment by activated carbon. The spirit is made neutral by adding such chemicals. This product is used as the base material for making alcohol of any kind viz. Gin, Vodka, Rum, Whisky, Scotch, Beer. The company is currently supplying this material at a strength of 1.68 and with a purity percentage of 96.4% v/v

Loading of ENA barrels using Fork Lift

47

At present the 20 container has 40 drums

Plywood being put so as to put another 40 drums on top of

48

it Drums are being filled after loading up of another 40 drums

Historical Analysis
The company commenced its operation in August 2010 almost a year so not much of history can be made available. Since it has commenced its operation the company has strategically identified various sectors in which they can invest in and earn profit and have provided those products in an orderly fashion so as to cater to the demand as soon as possible. The company is also showing the first mover advantage in few of its products in certain areas of Africa. The very first product that the company introduced was ENA(Extra Neutral Alcohol) in August and then later on diversified its product and introduced Whisky in the African market which was a huge success. The company then identified a different market for its business and added another country to its region of operations and supplied ENA and whisky in the market. The salt was also introduced in the African market,thereby making the firm introduce about 3 products by February.

49

Growth Chart
The company has been growing ever since it commenced its operation in Africa. Following graph shows the sales growth chart of the company.

Chart 8: Month wise & product wise sales of the Shanker International

Chart 9: Total Sales of the Organization from Aug 2010 Mar 2011

50

SWOT
Strengths Experienced top management Financially sound Hardworking employees Dedicated to meet the demand. Weakness Less/Inexperienced staff Startup Company

Opportunity Lot of unexplored areas exists so a lot of potential is there. An early mover advantage exists. Less Competition Huge demand for the product is there.

Threats From new entrants From existing competition From substitute products

51

5.0 Issues and challenges facing the organization

52

Some of the Common Problems

Startup firm o The firm has recently commenced its business so the initial problem of setting up the business prevails. Less/Inexperienced Staff o The staff employed is inexperienced in the field of international trade. Increasing price of the raw material/finished product. Less number of Working hours o Time difference between the firm and its client leads to the less number of working hours between the two Rotation of money o The company has not opted for Letter of Credit as a mode of payment so there is a delay in receiving the payment for its goods The very recent problem that was faced is to avail the benefits of Focus Market Scheme.

Profit squeezing as the company has to sell to wholesalers instead of retailers or end consumers directly.

53

Problems in Africa
African Government increases the Valuation of the goods each time so the earnings reduce. Even after taking advance from the client on a fixed price, as the goods reaches the destination, client always asks for decreasing the price. The quantity of the goods is always less than what is purchased. The packaging is not done correctly which leads to damaged/reduced goods which in turn harms the image of the company and its clients. The people are lazy to work, especially after lunch; most of them dont even return post lunch. While loading and unloading the goods, some of the goods gets damaged.

54

6.0 Reflections on what has been learned during the placement experience

55

 Gained practical knowledge of the various documents & Various registration that are required I learned that doing retail marketing is not an easy task and not at all an option for this company. Govt. of Africa doesnt readily support the import activity. Profit is there if the company deals in large volume. Company Management tries to maintain good relations with its suppliers & buyers. Company is always looking for an alternate option/route in case of any difficulty met. One has to give credit to the buyers and keep on chasing the person for payment regularly.

The CHA in Africa is not competitive enough.

Experienced the working environment of the organization. Build cordial relationship with employees of the company

56

7.0 Recommendations

57

 The company should recruit the experienced staff in the field of international trade. The company should distribute its product in the Wholesale market instead of opting for retailing. To avoid delays of payment the company should go for Letter of Credit as a mode of payment. The company should go for supplying the goods on contract basis. The company should get the drums filled with about 2-3 Ltrs. extra so as to avoid the complaints of supplying less quantity. Also the quantity demanded can be met by ensuring proper packaging of the goods.

58

8.0 Bibliography

59

Various links and material has been used for preparing this report

http://www.wikipedia.com http://www.indianindustry.com/trade-information/documents-required.html

Research paper Does Export and Productivity Growth Linkage Exist? (Evidence from the Indian Manufacturing Industry),Chandan Sharma and Ritesh Kumar Mishra,2009 A Literature Review on the Relationship between Foreign Trade and Economic Growth, Huan Chen,2009 Export Growth in India: Has FDI Played a Role?, Kishor Sharma, 2000 http://scholar.google.co.in http://www.tradingeconomics.com/ghana/consumption-of-iodized-saltpercent-of-households-wb-data.html http://www.indexmundi.com/ghana/gdp_real_growth_rate.html http://www.tradingeconomics.com/ghana/exports http://www.ghanaports.gov.gh/

60

9.0 Annexure

61

List of Tables S.no 1. Table Showing GDP Growth rate

List of Graphs Chart no. 1. 2. 3. 4. 5. 6. 7. 8. 9. Graph Showing Ghana export growth chart from 1997-2010 Ghana import growth chart 19972010 Transit traffic at Tema port 19972010 Cargo Traffic at Tema port 19972010 Total number of vessels handled at Takoradi port every year since 2001-2010 Total import/export from Takoradi Port 2001-2010 Ghana consumption of Iodized Salt 2002-2008 Month wise & product wise sales of the Shanker Internatoinal Total Sales of the Organization from Aug 2010 Mar 2011

62

10.0 Case Study

63

The EXIM business is built on how well the organization can build personal relationships and be responsive and communicative enough with business partners and customers for its success. International trade is exchange of capital, goods, and services across international borders or territories The Director Mr. Pradeep Kumar Agarwal heads the organization in India with his counterpart heading the organization in Africa. He has been into trading industry for more than 28yrs.In his early time he used to provide Filter cloth to industries and later setup cement plant in 1988 at Ghaziabad. Manufacturing cement from basic raw material Limestone, Coke Breeze, Gypsum, Latrite, Iron ore, Clay etc. He then setup his plants in Jammu in 1997 and in Nepal in 2002. The firm Shanker International started its operations in may 2010. It was setup as an export oriented firm with initial export of Extra Neutral Alcohol (ENA). Currently the firm is exporting 3 products viz. Iodized Salt, ENA, Whisky. Initially when the management started its business, they were unable to locate the suppliers of the commodity for about 3 months, hence a delay in the firms operations and hence an initial loss which lead to fall in the morale of the management. But the management being hardworking, determined, dedicated, firm and with its expertise found one of the best suppliers Radico Khaitan Ltd., (U.P.) for its product and hence started doing business and has since then maintained good relations with the organization till date. Working together both the companies have changed the market of Africa for the product ENA, by supplying the best supply of quality in whole of Africa. The firm gave its competitors something to think about their strategy and has definitely made them improve the quality of supply of ENA which has increased their cost of importing the material.

64

With the increase in the price of ENA in UP, the firm Shanker International started looking for new suppliers of the same product all over India. They found many suppliers in Maharashtra and were providing the material at a lower cost than Radico. Shanker International then reduced its buying behavior from Radico and started buying it from these existing distilleries. Even though the firm changed its supplier, they have never compromised on the quality of the product being offered as a result the firm got new supplier at a lower rate with equivalent quality and hence was able to serve its customer at the same rate but with the increase in profit. In the meantime Midland International Ghana Limited one of the leading importers of ENA and distributor of ethanol for alcohol production.at the, Tema Port caught fire on 27th Sep 2010. Its terminal consists of 5 tanks, with a total capacity of 5,000,000 liters out of which 2 were completely burnt down, 1 caught fire but the fire was extinguished but even then making that ENA impure for production of alcohol. As a result Midland International suffered heavy loss but a positive and a turning point for the firm Shanker International as due to this incident the demand increased a lot more than usual and the market opened up more for this firm. With the increase in demand of the product in the African market, the organization looked for other suppliers as well and is trying its best to meet the increasing demand. The firm then looked to diversify its product line and hence surveyed the market for a new product to be launched and came out with 2 ideas. Firstly they discovered that African market is huge consumer of alcohol and Secondly they discovered that Salt is in its infant stage in Africa and hence it could be another big sector they can invest into. The firm then surveyed the market in depth and found that whisky/scotch is the most favorable drink in Africa than other variants of alcohol. So the firm then started looking for the readymade suppliers of whisky/scotch in India and they found many but contracted with one of them as their sole-sales partner for Pan-Africa. Also in the meantime the firm started looking for the suppliers of the salt with the company supplied packing material. For the packing material the firm then contracted with one of the designers and finalized a design for its packing. Also the packing material to be used was decided as Flexible Plastic Laminate Pouches with the final packing in HDPE bags of 50kg each.The firm finalized the name of the salt as Tiger Salt. Initially the company exported salt bags of 50kg each in a 20 container but found it difficult to sell as the people in Africa do not take into consideration the weight

65

but rather they pay by number of bags. Therefore the firm found it difficult to cover their expenses at that rate. So this was one of the problems the firm faced. Also during this process one of the companies in India filed a law suit against Shanker International claiming that they have used their goodwill as they have used the same name Tiger Salt which the other firm was using in India itself and it was registered trademark. So Shanker International had to stop the export of Tiger Salt and changed the name of the salt to Gourmet Salt and also got it registered. Since the name of the salt was changed therefore all the packing material that was originally printed had to be thrown away and hence added to the loss for the firm. Also the expenses to register the new name, and to develop the packing material bearing the new name had to be borne by the firm. After these problems were solved the firm then changed the packing of HDPE bags from 50kg bag to 25kg bag and was still selling the bags at the same price as earlier, thereby making the firm to sell half the quantity at the same price and hence cover up some loss that was incurred due to earlier problems. The firm after establishing its presence in one of the African market looked to expand its business and hence exported salt to country Benin. Customers at Benin refused to buy the salt after its 2 containers reached Benin stating the price is high or offering very low price for the goods. The company then looked for alternate buyers of the goods but couldnt find any. Also the company had its operations ongoing in the previous country and didnt had enough staff who could look for new buyers in Benin. As a result the containers got seized by customs and also the demurrage was charged to the exporter and this also added to the loss to the company. Thereafter company sort another location for its business expansion and hence entered Togo with whisky and eggs. Initially sale of eggs was huge but due to non-availability of air-conditioned warehouse the eggs got spoiled and hence the sales reduced and ultimately the firm had to rethink as to what to sell in that market. So the firm entered with Whisky and tried to cover by its sales for the losses incurred. Now, for whisky to capture the market and make its mark in Togo the firm decided to market its product and advertise for it on Radio & Television. As a result the demand increased and now it has made Status Whisky as one of the most popular brand in Togo. The firm also decided the same for Ghana(previous country). As for the promotion of Whisky, the firm got the promotional material ready from India and shipped the same to Africa. The promotional material consisted of

66

Caps, T-shirts, Posters, Key chains, Pens, Purse (Women). All these had the company name logo and what all products the company deals in. The posters were put over the goods supplying vans. The rest of them were either distributed or gifted so as to create publicity for the goods. Other problems that the firm faced were constantly increasing price of the raw material and also increase in the custom duty to be deposited in Ghana everytime due to valuation of the product to which there is only one solution as to increase the price of the product to be supplied but with the increase in the price will lead to decrease in the demand of the product and hence losing out to its competitors. This is one of the major problems of the firm. Also the firm is facing the payment problems from the buyers as in Africa almost all of them pays less at first and then slowly and steadily keep on reducing their debts which causes problem for the firm as money is required to procure material and hence for the continuation of operations. Since the inception the firm has faced many problems and tackled many hurdles but the management never lost hope and was always determined to deliver its best and will continue to do so.

67

11.0 Synopsis

68

The main objective of my internship was to learn about documentation and registrations required in international trade. Also to get to know how to deal with clients and cater to arising difficulties. Also to learn about the organizations competitors and how to compete with them. Another objective was to learn how the funds are transferred to the home country. From all these objectives I found out that there are about 24 documents that exists in International trade. Since it the client belongs to a different country hence a study of cultural background is important before proceeding with the face to face conversations. I also listed out various issues that the company has faced and is facing currently both in India and Africa such as payment delay problem,inexperienced staff members,quantity supplied is not appropriate. I could not specifically get to learn about how the funds are allocated in an organization but I did learn about how the funds are being transferred to and from India and Africa.

I would like to conclude by briefing some solutions to the problem, Firstly the company should recruit experienced staff. Secondly the company should opt for Letter of Credit as the mode of payment so as to avoid the payment delays.Lastly the company should bear the cost and add about 2-3 Ltrs. extra of ENA in the drums so as to avoid the complaints of less quantity being supplied.

69