TERM

PAPER
BUSINESS ON THE GLOBAL ENVIRONMENT
SECTION-1, MBA-503

PREPARED FOR: PHD PROFESSOR SANAUL MOSTAFA
ADJUNCT FACULTY

Submission Date
16-12-2015

PREPARED BY:
IMRAN KHAN ID: 133051059 (imran.khan.mba@ulab.edu.bd)

TAHIATUL JANNAT ID: 133051030 (tahiatul_ulab@yahoo.com)

TOWHIDA RAHMAN ID: 133051021
(tsrahman930@gmail.com)

Topic-6

The Russian Federation is subject huge sanction by

European countries and the USA. It cannot or will not
import basic agricultural product like potatoes, cauliflowers,
egg plants and tomatoes, which is used to import from
Poland, Latvia and Ukraine. The Russian government would
import these items from Bangladesh. These products did
not passed tested as they contain harmful chemicals. If
businesses can overcome.Does this export is possible. Can
you develop a business concept for export?

Introduction:

Why we chose this Topic?

To be very honest, we have chosen this topic as it seems
easier to us to understand what this topic really means and
also we thought that we will get lot of information through
internet, so thinking of our own advantage we choose this
topic. But scenario started differently when we engaged to
do work with this topic. Taking interview of a female
entrepreneur and visiting Hortex foundation have changed
our thought instantaneously. There's the story began. How
an easy topic encourages us to be a future entrepreneur will
be discussed over here.




Why this topic is important?


As we are MBA students, most of us already engaged or will
be engaged in Business sector. Its not very easy to do
Business without having practical knowledge. Different types
of hindrances like knowing market know how, cultural,
political, social, economical barriers along with trade and
payment barriers etc have to face while doing a business.
How to overcome all of these obstacles and with great
enthusiasm be an entrepreneur in real life, this topic will help
us along with others a lot.

Analysis:

Our analysis was quiet different. We met different people
and thats why our analysis changes every time. Like:

Assumption 1: We will export in Russia.
Assumption 2: Its not possible NOW to export in Russia.
Assumption 3: May be in near future we will export in
Russia but before that we were going to do Joint
Venture if possible

We will discuss over here these 3 assumptions one by
one.

Assumption 1: We will export in Russia.

As From our topic its already clear that Russia want to
import their basic agricultural product like potatoes,
cauliflower, egg-plants and tomatoes from Bangladesh which
they used to import from Poland, Latvia and Ukraine. Here, I

would like to include that whether you are an importer or

exporter, one should have to go through an export-import
process and for an entrepreneur this information is incredible
to know. Our honorable Professor Sanaul Mostafa Sir gave us
an overview Hortex Foundation and told us to visit there so
there be a clear picture about export/import process. Hortex
Foundation is basically Horticulture Export Development
Foundation. It is located in Sher-e-bangla nogor and run by
the government of Bangladesh. There we met Assistant
General Marketing Manger Mr. Mitul Kumar Saha. He warmly
welcomed us. Our first question for him: Does it possible to
export potatoes, cauliflowers, egg plants and tomatoes in
Russia. He said "Yes", Why not? We were very curious to
know about the export/import process so we asked how to
export in Russia? He showed us an export process which one
needs to know while exporting perishable goods to foreign
country. He discusses with us each and every point of the
export process. The process includes:

1. Trade License
2. Export Registration Certificate (ERC)
3. Tax Identification number (TIN)
4. Have to be member of BFVAPEA
5. Agreement Paper with Signature of Exporter and Importer
6. Collect EXP For export from Bank
7. Contact with CSF Agent
8. Collect Export License from the customs officer
9. Sorting, Grading and packaging of Export oriented
agricultural products
10. Collect (Phytosanitary Certificate)
11. Bring the Exported product to Airport

12. Take the weight of the exported products and collect

customs clearance.
13. Export the Agricultural Product along with licensing paper
to the destination by Plane.
14. Collect foreign currency from the importer.
15. For getting payments on due time put all the important
document in a Bank.
16. Important documents should be transfered from a fixed
bank to Bangladesh Central Bank.

These are all the things one should follow while doing export.
We continuously asked him question. Next question come
How to go through these processes (perspective from an
entrepreneur)? How Hortex going to help us?

Mr. Mitul Kumar Saha said- Hortex going to help you
through all of these processes, mainly from post harvesting
period.

Then come the most important question, we were awaiting
to question: Do Bangladesh already export these perishable
goods to Russia? How much do we export? We already know
that Russian cultural is different and its very difficult to
export especially potatoes in Russia does this statement is
truth or not?

Mr. Saha explained: Yes, Bangladesh already doing export
with Russia.
Yes, the Russian importers are very careful about importing
potatoes in Russia as potato contains different diseases like:
1. Brown Rot disease

2. Water bond disease

3. Soil Bond disease
4. Quarantine disease

Mr. Saha also said, Bangladesh has exported 20 thousand
ton brown rot free Potatoes to Russia last year 2014. Our
Government has taken a major step to make potatoes
disease free. Our government has taken some steps for the
farmer like Contact farming system were they work with
some listed farmers (trained by Hortex foundation). Before
cultivate potatoes soils are tested by an expertise. Then soil
treatment is done by stabling blitching powder.
We do treatment to potato seeds too. So you can say that
we are doing good Agricultural Practice. Next steps come
harvesting, after that some potatoes about 5-7 kg were
taking to laboratory for test. Here I would like to inform you
that in Bangladesh there were already 4 Laboratories to tests
Agricultural products to clarify whether they were disease
free or not .I would like to mention the name of those 4
Laboratory tests places:

1. Bangabandhu Nation University of Bangladesh.
2. Shere-E-Bangla University
3. TCRC
4. Bangladesh Krishi University.

These universities then certified whether the goods contain
diseases or not. Here I would like to mention, We have
shortage of Lab capacity along with Manpower and
equipment.

Say something about Russian import system? What rules and

regulation they follow while importing?

Well, Russian has strict compliance. They import goods from
registered farmers along with registered exporter.
Registrations are done through DAE of Hortex researcher
Foundation.

In case of Potato, the Russian people usually buy 5kg
Potatoes from the superstore and in open market about 2kg
of potatoes.

You will be glad to know that Russia is the second largest
exporter and also importer of Potatoes, Bangladesh export 1
Lakh 3 thousand ton Potatoes in 2013-2014 in many western
countries. There is a huge demand for Bangladeshi potatoes
around the world. But in 2014-2015 we export only 20
thousand ton of potatoes as buyer back consignment
because of damage of potatoes. Still we are not hopeless.
Though in some stage there were lackings like in infrustctue
but there is still huge probability of exporting agricultural
products to foreign countries as we have:

(1) Huge production of potatoes
(2) Low labor cost
(3)Favorable climate

And for the Young Educated Generation, Hortex Foundation
is always there said- Mr. Mitul Kumar Saha.

We were exaggerated by the speech of Mr. Saha. Our on the

spot thinking was Hortex Foundation is there for us in all
the very steps of doing export. So there is nothing to worry.
There were huge probabilities to export. Therefore, we
should export in Russia- with lot of hope we thought, lets
do a business by taking help of Hortex Foundation.

Interpretation:

Hortex Foundation ensures us that they encourage
entrepreneurs. Basically they help from postharvest period.
Hortex Foundation has 5 Reefer Trucks (capacity of 3 trucks is
about 3 MT and 4 MT to new2 trucks). They also create a
linkage between farmers and markets. Therefore, our
instantaneous thought were, We will export to Russia as
we have collected the basic requirements for exporting
perishable goods to foreign country.




Assumption-2: Its not possible NOW to Export in Russia.
Our honorable Sir, Professor Sanaul Mostafa encouraged us
to meet a female entrepreneur so that we will get real life
example of business strategy and also what type of
difficulties, barriers etc an entrepreneur especially a female
entrepreneur have to face while doing business.
We collect a female entrepreneurs name, contact number
and address from Hortex Foundation, through Mr. Mitul
Kumar Saha.
Kazi Munni Proprietor of Rifat Enterprise, doing business
for about 21 years. She shared her experiences about the ups
and downs she faces and still facing while exporting to
foreign countries. When we told about our topic, her first
impression was- Russia is a peculiar country. Corruption is
too much over there, but not like that type of corruption like
we see in Bangladesh. In our country, corruption is
everywhere and in every level you will see corruption.
Then our question-answer session starts:
Q.1 Is Russia feasible country for Bangladesh to export?
Kazi Munni :No-for exporting perishable goods Russia is
not feasible.
Q.2 Why? Would you like to explain?
Kazi Munni- Well you might have heard that from the very
beginning the Russian market were not open for us. In 2009-

2010 we do promotion through advertisement, web

advertisement etc that we export quality products. In 2010
we try to move on to Russian market. Commercially we
started out export to Russia in 2010. One thing you have to
know that, when you export a product from Bangladesh to
Russia, it takes 45 days by transit and after 6-7 days later the
product got realize from cargo. So, approximately it takes 60
says to send a product to Russia. As an investor, I would not
like that my invested product (contains money) hangover in
the midway for 2 months. One the contrary, my products
quality may be damaged (as we are exporting perishable
goods). For all this reasons Russia dont want to do business
with us.
Q.3 Still we are exporting in Russia as we know from Hortex
Foundation, so how was that possible that Russia wants to
import from us?
Kazi Munni- In 2014 there were a conflict between Russia and
the European Union. Russians mainly imported their
agricultural product from Poland, Latvia, Ukraine and
foremost from Egypt. But through this conflict they have
stopped exporting to Russia. On the other hand, we were
trying to move to Russian market, we fortunately got an
opportunity and some Russian buyer stand by collect our
products.
Q.4 How much potatoes your organization export that time?
Kazi Munni: That time, Bangladesh export 40 Thausand M.T
of potatoes and I individually export 3,500 M.T of potatoes.
Q.5 Is it possible to export Cauliflower, Egg Plants and
Tomatoes to Russia?

Kazi Munni: Well, potatoes life longibility is higher than

cauliflowers, eggplants and tomatoes.
Tomato is cost-efficient and for exporting tomatoes we need
post harvest system. But in our country we are depriving of
this post harvest technology. We dream that one day this
types of technology will be available in Bangladesh.
Q.6 Then we think we should only export potatoes in Russia
(because of having lacking of technology)?
Kazi Munni replied: Reality is quite different. We export
potato to Russia in 2014 while at a time some businessman
export potatoes too which were kept in storage from 2013.
So the Russian buyer found quality less/ damaged potatoes
with defect and temporary they banned exporting. The
Russian Government gave us some requirements. If we fulfill
all the requirements then only they will do import from us.
But requirements does not fulfill yet. There creates a
misunderstanding between Russian Government and
Bangladeshi Government. From that time several times we
gave letter to Russian Government to persuade them. Lastly
in 2015 our government persuades some Russian buyer to
come to Bangladesh. The Russian buyer becomes convenient
to some extent by seeing our new setup (like seeing better
laboratory for testing agricultural products).
Q.7 Do they took up the banned for exporting?
Kazi Munni; No, they didnt. They gave us a target and we
unable to fulfill it. In 2015 the government said to export 2
million M.T but we do only 1 million M.T. So again export
postponed.



Q.8 Does direct export is possible to Russia?
Kazi Munni : No, without Russian Government logistic help
you cant export to Russia. No countries government can help
you to do business with other countries but government
helps to create a business environment were you can do
business.
Q.9: Have you got any kinds of help from the government?

KaziMunni. : Firstly. I would like to say that our government
support agriculture. Because of giving importance to
agricultural product we the exporter benefitted and
Bangladesh is getting developed day by day in agricultural
sector. You will be glad to know that there is 22 million taka
Idle money reserved in our Central Bank government will
not give you money for exporting. You have to do export by
your own money.

Q.10. As an entrepreneur what you think like what types of
help one should be needed to increase our export?

KaziMunni: Last year, I have written a book. I gave the book
to our Hounarable Prime Minister Sheikh Hasina. In that
book, I have mentioned that what types of problems we have
and how to overcome it. Like-Government should give loan
to agriculture based export oriented company. Then in every
district of Bangladesh there should be cold storage for

perishable goods. Business people should have to be honest

and ethical. Unethical work will destroy you one day.

Q.11. Which countries are feasible for exporting perishable
goods?

KaziMunni: For Bangladesh no country is feasible for
exporting perishable goods. Still we are exporting perishable
goods to Malaysia, Indonesia, Srilanka, Singapore, Thailand,
Vietnam, Nepal, Dubai, Saudi Arabia etc.

Q.12. What types of barriers hindrances exporting?

KaziMunni: Basically payment barriers. Again terms and
conditions of all buyers all time cannot be fulfilled.

Interpretation:

From Kazi Munnis speech we come to an assessment that
Russia still impose banned on exporting, so its not possible
NOW
to
import
in
Russia.


Assumption 3: May be we export our perishable goods to
Russia in near future but before that we will try to do a joint
venture in Russia.

This assumption we have taken for certain reasons-

Russia imposed banned on our exported agricultural
products.
We do not have better technology.
There is no high quality laboratory for inspecting goods.
There was insufficient cold storage.
Have lacking of inventory storage for keeping our
inventory safely.
Unable to guaranteed 100% disease free perishable
goods with adequate quality.

Interpretation:

We will try to do joint venture with Russia because
directly we cannot do business with Russia by having so
many lacks which we discussed above. We have to know
very well their culture, their political biases, economic
stability, purchasing capability and consumption rate
along with corruption level, their government
restrictions and so on things. We think joint venture
going to help us to answer all of questions.


Conclusion:

Corruption and money laundering remain a big problem in
BRIC country on the other hand, survey showed that out of
196 country Bangladesh stands at 174 as Corrupted
country for doing international Business. Question arises,
how two corrupted countries do international business?
We asked a question to the proprietor of Rifat Enterprise
KaziMunni that how to be success in Business? Whom or
what you consider as drivers to success? She answered
Honesty.
Like Kazi Munni, we can dream that one day will come
when Bangladesh will be the number one importer for
Russian market as well as for other countries.