Free Essay

Bank of Baroda

In: Business and Management

Submitted By ismu
Words 7899
Pages 32
Fact Finding and Risk Assessment

Sustainability Aspects in the
Vietnamese Cashew Sector

Prepared for

Kraft Foods Deutschland GmbH & Co. KG
Langemarckstr. 4-20, 28199 Bremen, Germany

Prepared by
[pic]
Representative Office Asia Pacific
5 Ong Ich Khiem. Hanoi, Ba Dinh, SR Viet Nam

June 2005
Table of Content

1. Introduction 1
2. Cashew in General and in Vietnam 1 2.1 General Agronomy 1 2.2 Sector organisation 2 2.3 Production 3 2.4 Products and processing 5 2.5 The Supply Chain 8 2.6 Trade and export 11 2.7 Internal consumption 11
3. Vietnams integration into the International Cashew Market 12 3.1 International Cashew trade 12 3.2 Supply 13 3.3 Demand 14 3.4 Pricing 15
4. Sustainability issues in the Vietnamese Cashew sector 17 4.1 Environmental sustainability 17 4.1.1 Forest Resources 17 4.1.2 Soil and Water 17 4.1.3 Fertiliser and Pesticides 17 4.1.4 Solid Waste, Waste Water and Air Emissions 18 4.1.5 Energy Efficiency 18 4.2 Social sustainability 18 4.2.1 Labour and wages 18 4.2.2 Children 19 4.2.3 Gender 19 4.2.4 Working conditions and wages 19 4.3 Economic sustainability 20 4.3.1 Supply Chain Equitability 20 4.3.2 Value adding 20
5. Towards a cashew and sustainability PPP project 20 5.1 Possibilities for an export orientated project intervention 20 5.2 Possibilities for a local market orientated project intervention 22 5.3 Potential project partners and region 22
6. Literature 23

Abbreviations

|CNSL |Cashew Nut Shell Liquid |
|EMA |Environmental Management Accounting |
|EU |European Union |
|FAO |Food and Agriculture Organisation |
|FOB |free on board |
|GC |General Corporation |
|ha |Hectare |
|kg |Kilogram |
|MARD |Ministry of Agriculture and Rural Development |
|mm |Millimetre |
|MoNRE |Ministry of Natural Resources & Environment |
|NIS |Nuts in Shell |
|t |metric ton |
|US |United States |
|VINACAS |Vietnam Cashew Association | Introduction

This study was conducted by EDE Consulting Asia Pacific on behalf of Kraft Foods. Objective of the study was to investigate the cashew supply chain in Vietnam in view of risks and opportunities concerning sustainability of the sector. Background to the assignment is that Kraft Foods intends to purchase increasing amounts of cashew kernel directly from Vietnam via the Kraft Foods purchasing arm TALOCA Vietnam and is in need of information concerning sustainability.

In many agricultural commodities, sustainability has been a key issue in the last few years. Especially strong price fluctuations on the international commodity markets made long term planning for producers increasingly difficult. In such a situation, environmental, social and economic viability in producing countries has come under pressure, often resulting in degradation of natural resources and marginalisation of producers’ in social and economic sense.

The Vietnamese coffee industry can serve as an example for a sector affected by unsustainable practices; coffee production expanded rapidly in Vietnam, leading to negative effects especially on natural resources, such as water resources and forests. Decreasing forest cover due to slashing and burning for coffee plantings lead to a number of knock on effects, such as decreasing water tables, nitrification of groundwater and increased surface runoff. Water scarcity has been experienced, which can lead to crop failures, decreasing efficiency of hydro power plants, etc. Crop failures can lead to food shortages with social knock on effects, e.g. children malnutrition, social unrest, etc. This example shows that it is important to understand the agricultural sector as an integrated part of overall social and economic stability of a country. Only an holistic problem awareness can avoid problems with wide economic, environmental and social effects.

This report outlines the setup of the Vietnamese cashew sector, including strengths, weaknesses and opportunities in view of sustainability. Based on a thorough description of the present situation and Vietnams role and integration in the world market, a sustainability risk assessment will be presented, leading to a set of recommendations on possibilities for Kraft Foods to involve actively for promoting sustainable conduct in the supply base of cashew from Vietnam.

Cashew in General and in Vietnam

1 General Agronomy

Cashew (Anacardium occidentale) originates from Brazil and has been discovered by the Portuguese in the 16th century as a commercial product. Outside Brazil, cashew was firstly planted Mozambique and then extended to India and further to Asia. Today, Cashew is cultivated in large holdings and plantations as well as in the smallholder environment. Both the fruit and the nut are utilised for trade and local consumption.

The cashew-nut tree is a fast growing, evergreen tropical tree. Cashew trees grow to a height of up to 12 m. Cashew trees are genuinely tropical and very frost sensitive. Although cashew can withstand high temperatures, a monthly mean of 25 °C is regarded as optimal. An average yearly rainfall of 1.500 mm provides ideal conditions, but drier conditions are well tolerated. As a perennial tree crop, cashew does not require intensive care. Cultural practices, like fertilising, irrigating, spraying against pests/diseases and pruning are however advised in intensive production in order to receive optimal yields.

Cashew consists of a false fruit (apple) and an attached nut. Although the apple contains 90% of the fruit, only the nut is being used as a commercial product.

2 Sector organisation

Originally, cashew was promoted in Vietnam solely as a crop for poverty reduction in the southern provinces of Vietnam on marginal soils and harsh, hot climate. It was often stated: “Cashew is for the poor, coffee for the rich”. Today, the situation turned ironically; cashew reaps better income for farmers than coffee at extremely low establishment and investment costs. Despite the success of cashew, the Vietnamese government never envisaged Cashew as a major export product and/or currency earner and as a result, the direct involvement of the state in the cashew sector is limited. Structures in the cashew sector evolved over time on merely private initiatives. Nevertheless, export figures have recently been frequently succeeding the official targets reaching a turnover of 410 Mio USD in 2004, proving the viability of private sector development (see Figure 1).

[pic]

Figure 1 Vietnamese cashew exports and revenues

Different to the tea or coffee sector, the Vietnamese cashew sector is not organised and developed via a state owned General Corporation (GC), e.g. like VINATEA or VINACAFE. The objective of General Corporations is to develop certain (agricultural) sectors under the direct guidelines and funding of the Government as a 100% State Owned Entity. Recently, many General Corporations are in the process of disintegration under the increasingly inefficient structures and high debts to the state. This painful and costly process is not needed in the cashew sector, because organisation is market driven and privately organised.

The largest cashew exporter in Vietnam is the provincial owned processor and exporter DONAFOOD in Dong Nai Province (processing and exporting around 7.000 tons of kernel in 2004, or 7% of the total crop). Many private processors are following closely by exported quantities as well as on quality.

Internally, the Cashew sector is organised through the Vietnamese Cashew Association (VINACAS). VINACAS is financed by member fees and was established by a private initiative of processors and exporters in 1990. Today, VINACAS constitutes of 112 Members including researchers, farmers, processors and exporters. VINACAS has the objective to consult the Government and the Ministry of Agriculture and Rural Development (MARD) in deriving policies as well as organise the sector internally. It is the duty to derive research questions, identify problem areas for solutions and bring together different viewpoints of sector participants. VINACAS provides the sector participants with updated prices of Cashew and other market information. In 2004, VINACAS intended to control prices internally; however, the planned intervention did not work. It is also in the scope of VINACAS to promote consumption of Cashew in Vietnam; however, such activities have been weak so far.

3 Production

Harvest time of cashew in Vietnam is between February and June. Cashew production in Vietnam is almost entirely carried out by small farmers with holdings between several trees to 5 ha per household. Main cashew production areas in Vietnam are in the provinces of Dong Nai, Binh Duong, Long An and Binh Phuoc. Binh Phuoc is with 170.000 tons and 170.000 ha in 2004 the largest cashew producing province in Vietnam (see Figure 2).

Agronomically, Cashew trees undergo a crop cycle of 4 to 5 years, after which yields drop considerably and only recover stepwise. In Vietnam, the cashew cycle of the majority of the trees peaked in the year 2004. Therefore, cashew production of Vietnam can be expected to drop considerably in 2005.

Most cashew in Vietnam was planted between 1980 and 1985, using low yielding varieties, with a productivity of around 1.000 kg cashew nuts per ha with an average number of 300 trees/ha (in mature gardens). The “old varietiy” was originally planted from seeds – an organised seed selection process was not taking place. Since cashew production in Vietnam expanded to a major industry, the Vietnamese government strongly promotes the replacement of old varieties with new varieties. The new varieties are claimed to yield up to 3 tons cashew nuts per ha and are propagated by grafting. Using grafting technology, the homogeneity of the trees and nuts will be much higher compared to the method of multiplication by seed.

5 Products and processing

The actual cashew fruit consists of the apple and the nut (see pictures in Annex 1). The apple constitutes around 90% of the total fruit and is a rich source of Vitamin C. Its high sugar content makes the apple a tasty fruit which can be utilised for consumption in fresh or dried form, as juice as well as for alcohol production. As soon as the apple is ripe, it falls to the ground and is collected by hand. The fruit should not be left on the ground longer than a day as the onset of fermentation of the apple will negatively influence nut quality. It is advised to separate nut and apple as soon as possible after the apple has dropped to the ground.

In Vietnam, only the cashew nut is processed and used economically; the cashew apple is not used for further processing but only dumped or used as garden compost. Vietnamese industry representatives stated that ripe cashew apples are quickly contaminated with soil and bacteria after dropping from the tree and are not considered safe for food processing. Presently, there appears to be hardly any know-how for cashew apple processing available in Vietnam; it seems that further investigations should be done for industrial use of cashew apple processing (see Table 1 for possible products from cashew apples). As long as cashew prices are high, however, it seems to be unlikely that farmers investigate into new ventures as the income from nuts is already extremely rewarding (see Figure 5 for income distribution along the cashew supply chain).

|Input |Output |Description and Uses |
|Nuts |Kernels |Raw nuts are processed by drying, boiling, roasting, shelling, decorticating. |
|Apple |Prunes |Cashew prunes, produced by boiling the cashew apple in molasses, is very similar to |
| | |dehydrated prunes or dates. |
| |Juice |The cashew fruit is pulped by grating or pounding and the juice is pressed out and |
| | |strained. Cashew Juice has five times more citric acid than orange juice and is thus a|
| | |good source of preservation acid medium when mixed with other fruit juices or |
| | |vegetables |
| |Wine |The juice of the cashew apple can be processed into wine using the conventional method|
| | |of producing fruit wines. The alcoholic content averages 18%. |
| |Pulp |The fibrous pulp obtained after extracting juice from the cashew apple can be used as |
| | |animal feed or dried and processed into diet fibre biscuits |
|Shell |Cashew Nut shell Liquid |Extracted from the cashew shell, CNSL is used in the manufacturing of paints, |
| |(CNSL) |varnishes, resins and brake linings |
| |Fuel |After extraction of the shell liquid, the shells are used as processing fuels |

Table 1 Cashew and its potential products (USAID, 2002)

After collection of the apple, the nut is removed by a turning action from the apple by hand, using family and outside labour. The removal of the nut must be done quickly after collection to avoid that the quality of the nut is negatively influenced by onset of fermentation of sugars contained in the apple. During harvest time, family labour is often not sufficient to remove nuts at harvest peaks; one worker can only remove approximately 40 kg of nuts per day. After removal, farmers sell nuts quickly to small traders without any further drying or processing.

As soon as the nut has been separated from the apple, it must be sun dried for at least 2 days before it can be further processed by soaking, roasting, shelling, drying, testa removal, grading, fumigation and packaging (see Figure 3 for entire cashew process flow). Drying is a crucial process for quality; rewetting of nuts after and during drying must be strictly avoided. As soon as rain approaches, the nuts are to be covered by canvas. In general, drying conditions for cashew nuts are excellent in Vietnam as hot and dry weather is given at the right tomes of the year. Properly dried nuts can be stored for 2 years before being shelled.

In a first processing step, nuts must be soaked in water or steamed (see Annex 2). The moisture in the shell will facilitate the rupturing of the cells containing shell oil while retaining it in the shell. The moisture makes the kernel slightly rubbery and limits breakage of the kernels. During processing, nuts are roasted or steamed to discharge the caustic shell oil and acrid fumes. Kernels must be protected from contamination by the shell oil because it causes blisters in the mouth and throat when eaten.

After roasting/steaming, cashew nuts are shelled (see Annex 2). This is the most difficult and laborious operation in cashew processing. Shelling in Vietnam is entirely done by hand, mostly by women labourers. Large scale mechanical shelling machines are difficult to design because of the irregular shape of the nut, hardness of the shell and brittleness of the kernel.

After shelling, kernels are dried on racks in ovens at 70° C. The testa becomes dry and can be easily removed afterwards. Remaining traces can be removed with knives (See Annex 2). As soon as kernels are cleaned from remains of the testa, kernels can be graded. After grading, kernels need to be dried to around 3% moisture before they are released for fumigating and packaging. Drying is especially necessary to extend freshness and prevent fungal and other infections.

Many by-products evolve during cashew processing (Figure 3). Some by-products are further economically valorised; others, such as cashew apples and testa remains, are dumped and treated as waste. Especially during industrial processing of cashew, a number of both economically useful by-products and harmful waste is generated. Cashew Nut Shell Liquid (CNSL), a caustic oil, can be extracted and is used by car manufacturers for brake linings as well as for varnishes and paints. According to the processing and extraction technique applied, different amounts and quality of CNSL can be extracted. If the oil is, however, released uncontrolled with smoke to the air during roasting, environmental damage is inevitable. The smoke from roasting contains large amounts of oil which is detrimental to the environment surrounding a factory. Trees have been reportedly died as a result from oil covering leaf surface and blocking the stomata so that trees cannot take up CO2 from the atmosphere. In addition, the oil is aggressive on the skin so that working conditions in cashew shelling need to be under good safety regulations to avoid health problems.

[pic]

Figure 3 Cashew products along the processing chain

New, more efficient and cleaner technologies have been developed already in Vietnam to avoid environmental contamination; however, these technologies have not made it to industry standard yet. Changes in processing techniques to cleaner production must be promoted by industry (e.g. VINACAS) and government agencies (MoNRE) by showing economic benefits of cleaner and more efficient production. It can not be expected to be implemented before the present technologies have been fully written off and out of production. In a final step, cashew shells can be sold as fuel for industrial and home use after oil has been extracted.

The processing industry in Vietnam has undergone a fast development. Up to 1994, Vietnam did not have enough capacity to process all internally produced raw nuts to kernel. Around 20% the raw cashew nuts production was exported to India and other countries for processing to the state of kernel. This situation has changed dramatically and as of today, Vietnamese processing facilities exceed the present production and Vietnam imports around 50.000 tons of raw cashew for final processing. Centres of cashew processing are concentrated in Long An, Binh Duong, Dong Nai and Binh Phuoc provinces (Figure 2). Especially Long An and Binh Duong with increasing industrial parks have processing capacities largely exceeding provincial production (Binh Duong: 70.000 tons processing capacity, 25.000 tons production, Long An: 70.000 tons processing capacity, 1.000 tons production).

6 The Supply Chain

Cashew farming in Vietnam has been a lucrative business in the past years. Cashew demand has been steadily growing on the world market; Vietnamese entrepreneurs have been increasingly investing into cashew processing and farm-gate prices have been extremely good in 2004. After discounting all production costs, an average farmer in Binh Phuoc is able to earn almost 580,-- USD per ton raw cashew nut or over 2.000,-- USD per ton cashew kernel equivalent (at a conservative FOB proce of 4.100 USD/ton kernel). An average farmer with one ton of raw cashew nuts is therefore above the officially quoted national average per capita income of Vietnam, quoted at 547,-- USD in 2004 (Vietnam Economic Times, 2005). This price received by farmers an unprocessed product represents over 50% of the final export value (see Figure 5). Considering the high costs of processing, this value can be considered as high.

Around 95% sell raw cashew nuts to a large number of collectors (please refer in the following to Figure 4). Collectors collect only small quantities, but are able effectively penetrate remote areas by motor bike. Only an estimated 5% of total cashew is going directly from farmers to larger agents. This fact also shows that only few companies have so far established buying stations in remote areas but rather rely on the services of the so called “xe om” (motorbike taxi) collectors. Their role in the supply chain is important but very simple. The only added value collector provides is transport. No processing is carried out. Still, the service is rewarded well at around 10 USD/ton nuts (see Figure 5 for details).

[pic] Figure 4 Actors along the cashew supply chain in Vietnam (pers. communication)

On level of cashew agents, the private sector organisation of the cashew sector becomes apparent. Only 10% of the total cashew traded is traded via dependent agents; these dependent agents are mostly belonging to provincial companies or belong to large private processors and exporters. Many private agents make cashew nut buying in Vietnam an extremely competitive, but almost entirely private business. Agents carry out more services in the supply chain, such as providing limited pre-financing to collectors/farmers. The agents make a margin of around 10,-- USD per ton raw cashew nut traded.

Agents mostly sell cashew on to large processors. These processors are processing up to final kernel grades and export directly to overseas clients. Almost 80% of total cashew nuts are traded directly from dependent and independent agents to processors/exporters. Only 20% is going though medium sized processors who also export themselves.

Highest costs throughout the processing chain occur during final processing. Especially labour costs are making cashew production expensive. Several projects were initiated to mechanise processing, especially the actions of shelling and peeling, however, results were not promising and an increased percentage of broken nuts were found.

In terms of margin, exporters reap with an average 80,-- USD per ton exported kernel the highest margin in the supply chain. The margin however must be calculated in such way because the exporters face the most risk of price fluctuations within the supply chain. Exporters in Vietnam always sell “outright” and take long positions. If prices collapse between time of purchase and time of selling, severe losses will be experienced. In 2004, the situation was very positive for exporters as prices were increasing throughout the year so that the exporter margin could be permanently widened. However, the risk that prices are falling are not at all covered or hedged; exporters are running large risks in a highly competitive and fluctuating market such as cashew.

The idealised supply chain as presented above does not include processing to cashew for consumption (salted cashew, etc.). Quantities produced for Vietnamese consumers are very small and cashew processing is carried out entirely by processors/exporters. Skills in marketing for end products to consumers or skills in establishing viable marketing and distribution channels are hardly available at the level of exporters/processors.

[pic]

Figure 5 Cost and Margins in Vietnamese Cashew (author’s calculation and interviews)

8 Trade and export

In 2004, Vietnam has become the world’s second largest producer and exporter of cashew after India, with processing capacities exceeding national cashew production. With the entry of Vietnam into the world market, market setup changed by a steep increase of supply.

During 1990s, Vietnam became a relevant producer. Until 1995 Vietnam was exporting almost 20% of its production in the semi processed form of nuts in shell (NIS). From 1995 onwards, Vietnam built up processing capacities to export their entire crop in the form of cashew kernel while even importing semi processed NIS to meet its processing capacities. Today, Vietnam consists of processing facilities to process around 450.000 tons NIS/year. That means that Vietnam presently imports an additional 50.000 to 100.000 tons NIS to meet domestic processing capacities.

This change from a NIS exporter to an importer of NIS was important for Vietnam to increase value adding of cashew in Vietnam and to become a direct trading partner to the international cashew buyers rather than only providing semi-processed products. Today, Vietnam exports the largest parts of its production to the US (41%), followed by China (20%) and a number of European countries.

[pic]

Figure 6 Exports destinations of Vietnamese Cashew kernel exports in 2004 (FAO 2005)

9 Internal consumption

Vietnam produces a variety of finished cashew products. Especially salted cashew can be readily found in supermarkets. These cashew are produced largely by cashew processors. The general food industry has not picked up cashew as a product to be marketable to end consumers yet.

Local consumption remains low so far, at an estimated 2 to 5% of total production or around 2.000 tons/year. The reason for relatively low local consumption can be found on low consumer awareness while prices for cashew remain high. There is hardly any focused advertisement done, neither for promoting health benefits, nor the “on the go” characteristics which make cashew so popular in the European and US markets.

It appears, however, that with an increasing available income, increasing health awareness of Vietnamese people as well as following international trends, the prospects of increasing local cashew consumption in Vietnam appear to be good. VINACAS has also as one of their objectives to promote internal consumption, however, no coherent concept for doing so is in place. The same applies for the marketing of possible by products, such as from cashew apples.

Looking at cases from other countries, e.g. the US, the potential of promoting internal for cashew consumption appears excellent. Although the best known nuts are peanuts, the most preferred nut is clearly cashew (see Figure 7).

[pic]

Figure 7 Consumer Preference of different nuts in the US market (Almond Board 2004)

Vietnams integration into the International Cashew Market

1 International Cashew trade

In the international market, different types of cashew are traded. Cashew kernels or raw cashew nuts are traded and defined by physical quality description (size, colour and % broken). Kernels represent the last step of processing before exporting and further processing, as salting, packaging, etc. Largest exporters of cashew kernel are India, Vietnam and Brazil.

Secondly, cashew is traded in a semi-processed form of raw nuts or nuts in shell (NIS). Countries with limited processing capacity, especially West African countries, are mainly exporting raw nuts to countries with excess processing capacities. In contrast to African countries, Asian producing countries have been successfully increasing processing capacities over time to be able to process at least the local production. By that, countries can limit export of raw nuts while increasing in-country value creation to process cashew kernels and export directly to consuming countries. Largest importers of raw nuts are India, Vietnam and Brazil.

2 Supply

Figures of worldwide cashew production are difficult to obtain, due to a highly competitive market in which information is closely held. In 2001, FAO estimated a total world production at around 1.4 Mio t of NIS of which more than 900.000 tons NIS (or around 225.000 tons of cashew kernels) enter the international market annually. Today, after Vietnam increased production and demand has been increasing steadily, this figure would need to be corrected upwards.

[pic]

Figure 8 Shares of total exported cashew kernel by India, Brazil, Vietnam and other producing countries (FAO 2004, Thanh 2004)

As it can be seen from Figure 8, the cashew market is clearly dominated by India, Brazil and Vietnam, providing around 90% of total exported cashew kernel. Largest exporting country remains India; Vietnam has become second largest, pushing Brazil to third largest producer. Other cashew producing countries are African countries, such as Tanzania, Mozambique, Cameroon and Kenya.

Since the mid 1990s, worldwide production and exports of cashew doubled in quantity; within this development, Vietnam has been a major contributor to the expansion. Cashew nut exports from Vietnam have been expanding rapidly; in 2004 (100.000 tons), exports reached 15 times the quantity of 1993 (6.000 tons), see Figure 9.

[pic]

Figure 9 Development of cashew kernel exports of the three major producing countries

3 Demand

Cashew nuts have been popular in the US and are increasingly appreciated in Europe as a snack as well as an ingredient in cereals and for cooking. In contrast to basic nut products, such as walnuts, almonds, etc., premium nuts like pistachios or cashew are increasingly gaining popularity in due to its taste and nutritional value and low fat content compared to other nuts. Nuts in general are increasingly appreciated as specialty snack (honey roasted, chilly coated, etc.) as well as healthy snacks, as they contain a large percentage of unsaturated fatty acids. Cashew in particular, is mostly consumed by the higher income groups in the US and Europe because of its higher price compared other nuts, such as peanuts or walnuts.

Imports of cashew nuts have been increasing in the major markets of the European Union, the US and China. In 2003, total cashew imports in the US were over 100.000 tons, in the European Union about 60.000 tons. Together, the US and EU make up around 65% of the worldwide cashew imports. Demand of cashew in producing countries remains generally small due to the high price of cashew nuts compared to other local available nuts.

[pic]

Figure 10 Cashew kernel Imports of US and EU (FAO 2004)

Within the given world market setup, Vietnam has taken its position and is supplying an increasing quantity of cashew kernels into a growing market. Such strategy has been achieved by Vietnam in quantity terms, now the Vietnamese cashew sector need to consolidate and proof that they are a responsible player in the market.

4 Pricing

Export prices for cashew have been favourable over the past years. Especially 2004 has been a year with exceptional increase of export prices (Figure 11). An increasing total amount of internationally traded cashew can lead to a higher fluctuation in prices, e.g. when producing countries try to hold back cashew. Such efforts have been done by India in the past already in order to prevent Vietnam for further expanding their cashew activities.

Cashew prices have been characterised by good stability compared to other crops. Reason for the stability is that there is no cashew futures market in place and cashew prices reflect the supply and demand situation on the world market. Therefore, price volatility has been low in recent years (Figure 12).

[pic]

Figure 11 Kernel Prices for standard export quality from Vietnam

[pic]

Figure 12 World Market Price Volatility cashew kernel

Sustainability issues in the Vietnamese Cashew sector

1 Environmental sustainability

1 Forest Resources

Environmental considerations of cashew are ranging from cultivation to processing. Under present policy recommendations, a consolidation of cashew growing areas is recommended. That means that it is not to be expected that natural forests including their habitat are being endangered in view of cutting down for the establishment of new cashew plantations. It can be expected though, that due to the presently continued high world market prices coupled with a downward cycle in Vietnamese production, that farmers will increase their plantations into natural forests. However, the overall impact of cashew production on natural forests, however, can be considered as low.

2 Soil and Water

Cashew is a drought resistant tree; however, in order to achieve good yields, around 1.500 mm rainfall/year is required. As farmers have been earning good incomes from cashew, it can be expected that cultivation practices will intensify in the future, including the increasing use of irrigation. As it can be seen in the past years, weather conditions in Vietnam appear to become drier over time so that farmers might be ready to use more irrigation from groundwater sources. Such developments can be potentially very dangerous as it can be seen from Daklak in the coffee sector now. The increasing use of groundwater can lead depletion of ground water with many knock on effects. Secondly, under the hot and dry climate as in many cashew areas of Vietnam, irrigation can lead to salination of soils, a hardly irreversible damage of the soils. Irrigation is especially important during establishment of young trees because it speeds up the growth in a dry season. Due to the deep root system the trees, it can survive several months without irrigation when mature. Mature trees should receive 1.800 l of water per tree every 2 weeks (or 5 mm/ha).

Before a more intensive cashew production can be followed in Vietnam, including new high yielding varieties on extended areas, risks must be carefully evaluated in order to avoid water and soil related problems. Soil and water interrelations need to be carefully checked and soil/water conserving measures such as mulching should be advised. Such activities are presently not yet pressuring, however, could become relevant under certain situations. Grass strips in inter-rows between tree lines are an additional practice to prevent erosion and preserve soil resources (see Annex 1).

3 Fertiliser and Pesticides

Cashew is a perennial tree crop with little nutrient requirements. The new varieties introduced into Vietnam are more demanding in view of water and nutrients and therefore require higher investments in order to reach optimum yields. In view of fertilisation, application of nitrogen and phosphate are important. Amounts applied are small however, and in view of increasing fertiliser prices in Vietnam, it is expected that fertilisers are rather applied to little than in excess[1]. It is suggested that additional training on best practices for sustainable fertiliser use should be fostered in order to guarantee best performance of trees.

4 Solid Waste, Waste Water and Air Emissions

Farmers are presently focusing on the cashew nut. Apples are not utilised so far. The dumping of cashew apples does not provoke any environmental problems, however, it represents a by-product which has a potential for monetary valorisation.

Processing facilities in Vietnam are centralised deal with quantities between 5.000 and 25.000 tons of raw cashew nuts per year each. Processing facilities are mostly equipped with basic machines. Especially roasting equipment appears to be technologically outdated, leading to environmental problems. Large amounts of smoke are emitted, containing caustic oil which is putting a danger to the environment. So far, environmental institutions in Vietnam appear to be weak on giving penalties for smoke and waste emissions, therefore hardly any factory changes practices.

Hardly any data on environmental impact of cashew processing are available, although the general public opinion claims that processing is environmental damaging. In order to monitor impacts and possible improvements, environmental monitoring and possible even Environmental Management Accounting (EMA) could be used to improve identify the economic dimensions of environmental effects in cashew processing.

5 Energy Efficiency

Energy efficiency of roasting ovens seems to be low. Insulation appears to be insufficient and no hot air recycling is done, leading to excessive use of fuel. As cashew shells are used for fuelling ovens, the need for more careful use of energy for roasting might not be pressuring, however, in the light of possible stricter environmental laws in the future, the fuelling with cashew shells containing oil might be limited. It should be made an evaluation of costs and benefits on different fuelling technologies to establish the clear costs of fuelling (including direct and indirect environmental costs).

2 Social sustainability

1 Labour and wages

Labour on farm is partly family labour, partly hired labour. Competition for hired labour has been increasing lately in the rural areas of South Vietnam. Industrial parks are expanding quickly, pulling unskilled and semi-skilled labour away from rural areas. Industrial parks pay higher wages compared to simple farm work; simple farm labour has increased from 20.000 VND to around 30.000 VND/day over the last two years.

The rising pressure on labour resources is also felt in the cashew processing industry. Shelling, testa removal and sorting is done by hand as described earlier. In a situation where labour is getting more expensive due to the increasing competition from industrial parks, the situation of labour issues (safety, general labour conditions, etc.) should be monitored closely.

Processing cashew is laborious work during which workers get in contact with the caustic oil from the cashew shells during several processing steps. In the processing factories visited, workers wear rubber gloves for protection during shelling. When working at roasting ovens, workers are normally not well protected from neither heat nor the oil fumes. The smell and smoke in the mostly not well ventilated and dark factory halls do not provide ideal working environment. Factory managers are well aware of the difficulties stemming from oil and heat during processing but mostly do not improve situation because of a lack of financial resources. Factories with larger through put of cashew seem to be able to provide better working conditions.

The growing cashew processing industry has created a large number of jobs and income for unskilled labour in rural areas. From this perspective, cashew processing has established a new rural industry with all related job creations of transport, services, etc.

Although many larger factories have certificates for HACCP, ISO 9001, etc., labour conditions are not certified. Standards like SA 8000, certifying safety and social correct labour conditions, are not applied in the cashew industry. Clients demand certificates for health safety rather than for social and environmental concerns.

2 Children

Presently, child labour is not a problem in Vietnam. Labour is affordable and available so that there is no pressure to employ children in processing. Children in Vietnam have a special stranding and labour laws protect children and childhood. Children are not seen in laborious and dirty work like cashew shelling. Still, children issues should be monitored closely as the increasing pressure on labour resources could mean that more children will be employed in the future.

3 Gender

Gender discussions are common in development countries, especially in labour intensive export orientated commodities such as cashew. Criticism on the exploitation of women in cashew processing has been lead already in other countries, e.g. Mozambique (Kanji, 2004). Argumentation is that women are receiving less salary and are generally more vulnerable. A study also brought up health concerns for women working in cashew processing, especially mentioning reproductive health problems due to the long hours sitting.

In Vietnam, it is also apparent that in factories, mainly women do the simple works such as shelling and testa removal. Salary for both men and women is similar, however, women are hardly found in higher positions in the Vietnamese cashew industry. Under a rising pressure on labour resources it can be expected that the position of women as labour force will become more difficult in the future. Therefore, gender issues should be monitored.

4 Working conditions and wages

Long term contracts for ordinary factory workers are both on a permanent as well as on a seasonal basis. Facilities of large factories are well equipped, i.e. with a canteen providing free food to workers. Safety and labour laws are regularly checked by Vietnamese authorities, however, especially at smaller scale processors, implementation of ideal working conditions is often exceeding financial capacity of factory managers.

Wages are paid on daily basis and/or related to productivity. Salaries are in line with national regulations.

3 Economic sustainability

1 Supply Chain Equitability

The supply chain under present market situation is sustainable and provides all participants a good income. A main aspect that makes the supply chain sustainable is the explicit private organisation of the sector, leading to a healthy competition on a level playing field.

An average cashew farmer earns by selling raw nuts an income which lies above the average Vietnamese per capita income. As cashew farmers have additional income and are not 100% dependent on one crop, per capita income of farmers can be expected to be higher than illustrated in this entirely cashew focused study.

Collectors and small traders provide crucial services by buffering the supply between farmers and processors while providing transport of cashew nuts from remote areas. Depending on quantities and specialisation, collectors and traders can earn good money with such business.

Processors and exporters run the highest risk along the supply chain because they have to supply certain qualities and quantities at specific times to increasingly demanding clients. The ever changing market price and the large time span between purchase of cashew nuts and export of kernels make economic planning difficult for exporters. No price risk management by exporters is carried out so that exporters run high risks if purchase prices will be higher than export prices in a falling market. The increasing quantity of cashew each exporter is dealing with combined with the high price risk puts a question mark to long term sustainability of exporters under present situation. The risk of bankruptcy of a large exporter would mean a big damage to the supply chain.

2 Value adding

Presently, the cashew industry is entirely focused on exporting cashew kernel. The internal market is presently not well utilised and a large potential for value adding is not being used. Also, value adding should be aimed for to make better use of by products, e.g. from cashew apples. Marketing is not done in a coherent and focused way in order to widen basis of consumers.

Towards a cashew and sustainability PPP project

1 Possibilities for an export orientated project intervention

Sustainability issues are new to the young and successful cashew industry in Vietnam. When talking about sustainability, sector participants appear to be self confident and do not see immediate problems. Potential sustainability problems in the future are overshadowed by the presently exceptionally good prices. However, as it can be seen from other commodities like coffee, real sustainability problems occur in low price phases when sector participants are under pressure to work on a short-term profitability.

Cashew projects towards sustainable conduct are not new. Kraft Foods is conducting a cashew project with USAID in Guinea (see http://www.kraft.com/responsibility/agriculture_cashewguinea.aspx), supporting local farmers and small business. OLAM conducts a similar project with TechnoServe on the entire African continent (see http://www.technoserve.org/news/OlamCashew022005.htm). Objective of this initiative is to support framework conditions to increase quality and quantity of Cashew production in Africa.

The following key issues appear to have possibly mid term adverse affects on the sustainability of the sector

|Problem Fields |Proposed Interventions |
| | |
|Trading practices | |
| | |
|Processors and exporters face large risks by taking physical |Training in international trading practices and markets for |
|positions of cashew between signing delivery contracts (early |VINACAS and selected exporters |
|in the season) and date of delivery (end of season). Price |Evaluation of risk management tools |
|developments in the meantime can push exporters in the loss |Development of an cashew exporters handbook |
|zone. Non contract compliance has been experienced already in | |
|Vietnam and gives a negative sector image. Speculative | |
|behaviour should be avoided by sector participants by all means| |
|in order to provide a long term viability of the sector. | |
| | |
|Environmental performance and waste treatment | |
| | |
|Environmental pollution in processing is severe through by | |
|products and smoke. Awareness for environmental problems at |Establishment of best practices show case for clean cashew |
|level of processors remains low. |processing at selected processors |
| |Study on cost and benefits of cleaner production, potentials|
| |of energy conservation through process optimisation, |
| |Environmental Management Accounting, waste treatment and |
| |avoidance, eco efficiency certification. |
| |Development of an industry wide cleaner production program |
| |with VINACAS. |
| |Investigate into improved usage of by-products, such as |
| |cashew apples and testa. |
| |Dissemination Workshops |
| | |
|Labour & Gender | |
| | |
|Labour conditions in processing are not ideal and varying |Support program to VINACAS to establish an internationally |
|strongly between large and medium to small processors. Problems|accepted industry standard for labour conditions, i.e. SA |
|are occurring especially during shelling during which workers |8000 (Social Accountability) in order to reach a holistic |
|get in contact with caustic oil from shells. Gender issues can |sustainability approach. |
|potentially be boiled up by NGOs and the industry needs to be |Monitor and further investigate into gender and children |
|prepared to meet such challenge. |issues at processing. |
| | |
|Sustainable Production practices | |
| | |
|Cashew production does not require large amounts of inputs, |Distributing best practices on cashew farming to farming |
|however, irrigation and fertilising is increasingly recommended|communities with VINACAS and local extension services to |
|when new varieties are planted. Although water use and |develop and deliver optimal training messages as well as |
|irrigation is not used excessively at present, irrigation can |promote diversification of production. |
|lead to unsustainable water use in the very dry areas of VN |Establishment of on farm demo-plots in cooperation with |
|cashew production. |VINACAS, extension departments and research organisations to|
| |test multi-cropping systems in order to reduce farmers’ risk|
| |exposures. |
| |Establish best practices on irrigation for new cashew |
| |varieties in order to avoid over extraction |

2 Possibilities for a local market orientated project intervention

|Problem Fields |Proposed Interventions |
| | |
|Local marketing of cashew products | |
| | |
|Only few large Vietnamese processors are successfully following|Development of a sector wide cashew promotion strategy under|
|a strategy to sell cashew products to end users. Consumer |VINACAS. |
|awareness for health benefits of cashew as well as the cashew |Development of new cashew products, including products from |
|as a specialty snack is not present at consumer level. |cashew apple. |
|Therefore, consumption is still low in VN – although with an | |
|increasing available income, potential for marketing seems | |
|high. | |

3 Potential project partners and region

In the Vietnamese context, VINACAS appears to be a good project partner for activities in production, processing and trading. Although VINACAS is only a small organisation and has only one permanent administrative staff, the personal involvement of key players of the sector participants is impressive. During a possible project conduct, it appears to be most feasible to choose members of VINACAS as pilot companies and pilot production areas for project interventions.

A project setup project could be carried out regionally, exceeding the borders of Vietnam. GTZ has working contacts in the cashew industry of Cambodia. Most cashew from Cambodia is going in the form of raw nuts for final processing to Vietnam. In view of including more cashew producing countries (similar to the regional approach taken by the TechnoServe/OLAM project in Africa), a regional approach appears to make sense,, consisting of project sites in Vietnam and Cambodia.

From donor side, GTZ stated interest in providing technical support and possibly funds for a PPP project either in Vietnam or regionally together with Cambodia. Especially regional PPP projects are politically on the agenda of development agencies such as GTZ.

A project intervention should be carried out in a PPP approach in order to safeguard the inclusion of both market perspectives provided by the private partner and development perspectives by GTZ. Amounts of funds will need to be discussed with GTZ in detail.

Literature

- Almond Board (2004): Consumer AAU Top-line. - FAO (2005): www.fao.org. Online Statistical Data Base. - Kanji, Nazneen (2004): Corporate Responsibility and women’s employment. The Cashew Nut Case. International Institute for Environment and Development. London. UK. - Pham Dinh Thanh (2003): Hat Dieu. San Xuat va che bien. Ho Chi Minh City. Vietnam. - Pham Dinh Than (2005): Personal Communication. - USAID (2002): Susbsector Assessment of the Nigerian Cashew Industry. Washington. USA - VINACAS (2005): Bao Cao – Tong Ket Hoat Dong Nam 2004. Ho Chi Minh City. Vietnam. - Vietnam Economic Times – several issues.

Annex 1 – Cashew Production

Annex 2 - Cashew Processing

-----------------------
[1] Approximately 75 g LAN and 200 g superphosphate per year age of the tree is applied annually with a maximum of 750 g LAN and 2 kg superphosphate. Cashew trees are subject to zinc deficiency that can be treated with 200 g zinc oxide/100 l water applied as leaf spray.

-----------------------
[pic]

[pic]

[pic] [pic]

[pic]

[pic]

[pic]

Figure 2 Vietnam Cashew areas in (i) total area hectare under cultivation in ha, (ii) total processing capacity in tons and (iii) total production output in tons (from left to right; after VINACAS 2005)

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

Picture 3: Cashew and high protein cattle feed inter-planted

Picture 4: Cashew apples used as compost in banana field

Picture 5: Cashew drying

Picture 2: Cashew garden

Picture 1: Cashew nut and apple

Picture 6: Cashew soaking

Picture 7: Cashew roasting machine

Picture 8: Cashew steaming machine

Picture 9: Cashew shelling

Picture 10: Cashew shelling

Picture 11: Cashew shells

Picture 12: Cashew Nut Shell Liquid pressing

Picture 13: Testa Removal

Picture 14: Grading

Picture 15: Grading

[pic]

[pic]

Picture 16: Cashew Grades

Picture 17: Vacuum Packaged Cashew for export

[pic]

Picture 17: Cashew Nut Shell Liquid (left), packaged cashew nuts for local consumption (right)

-----------------------
Sustainability Aspects in the Vietnamese Cashew Sector – A Fact Finding and Risk Assessment

Sustainability Aspects in the Vietnamese Cashew Sector – A Fact Finding and Risk Assessment

Sustainability Aspects in the Vietnamese Cashew Sector – A Fact Finding and Risk Assessment

Sustainability Aspects in the Vietnamese Cashew Sector – A Fact Finding and Risk Assessment

Sustainability Aspects in the Vietnamese Cashew Sector – A Fact Finding and Risk Assessment

Sustainability Aspects in the Vietnamese Cashew Sector – A Fact Finding and Risk Assessment

Similar Documents

Premium Essay

Project on Indian Financial System

...Share Capital Deposit Reserves 9 41901.43 79740.98 7630.19 19854.46 11428.33 0.00 7363.67 0.00 81.29 14666.05 0.00 216.39 3229.06 5708.90 4788.64 8068.68 9295.81 5978.88 49686.30 24108.28 5526.90 1364.24 0.00 6596.73 0.00 0.00 12696.33 1119.41 68710.61 14062.72 47826.93 2294.10 18113.96 22774.65 0.00 1935.41 0.00 12069.93 4084.08 4417.76 3724.24 3782.40 2322.68 2688.19 54.48 10.37 5722.25 620.89 0.00 0.00 5.55 182.50 2190.41 11.31 45.47 8754.05 33395.91 2547.49 40.19 1458.83 2057.68 10565.88 8331.02 15380.22 8479.22 14982.73 57.97 50543.92 50162.48 3574.11 30824.21 34812.29 0.00 46663.78 42612.16 15985.05 25717.52 4915.93 5241.47 0.00 752.01 0.00 956557.96 Total Owned Fund Borrowings Deposit Investments Name of RRB State Sponsor Bank Loan Loan Recovery issued Net Profit Loss Net NPA % (As on % during the June 2010) (After Tax) Amount period 16 80.85 73.26 71.25 79.40 88.46 66.18 70.31 84.48 59.39 90.47 63.94 59.27 80.93 80.18 77.95 76.16 83.84 83.88 83.57 85.21 90.29 89.01 86.85 76.42 76.38 47.65 83.64 59.24 76.51 91.30 80.14 82.24 85.93 92.47 79.28 79.40 71.18 87.42 61.15 75.03 73.15 87.03 65.50 70.15 75.58 40.58 78.80 82.12 68.62 82.15 67.29 79.04 59.00 71.66 97.03 94.28 93.58 95.47 88.35 87.62 93.11 82.58 92.21 90.35 85.47...

Words: 3493 - Pages: 14

Premium Essay

Strategic Management in Banking Industry

...continuously to achieve best practices. For example regarding axis bank : Profit after tax up 34.76% to `3,388.49 crores Net interest income up 31.14% to `6,562.99 crores Fee & other income up 32.39% to `4,135.16 crores Deposits up 33.93% to `189,237.80 crores Demand deposits up 17.78% to `77,767.40 crores Advances up 36.48% to `142,407.83 crores Retail assets up 33.32% to `27,759.23 crores Network of branches and extension counters increased from 983 to 1,390 Total number of atms went up from 4,293 to 6,270 Net npa ratio as a percentage of net customer assets down to 0.26% from 0.36% Earnings per share (basic) increased from `65.78 to `82.95 Proposed dividend up from 120% to 140% Capital adequacy ratio stood at 12.65% as against the minimum regulatory norm of 9% And also they must nurture a few core competencies to stay ahead of rivals. Eg. Rivals can quickly copy any market position and competitive advantage is at best temporary. For example, in the banking industry if any bank comes up with a new product or scheme or merges up with other or introduces cost cutting approaches other banks also follow them immediately and that particular scheme is then easily intimated by others. This act of banks copying/intimating one another leads to no form of a benefit to the parties concerned. It only leads to destructive competition or hyper competition. This situation ultimately makes a firm to shutdown operations. For example, Bank of Rajasthan getting acquired by ICICI...

Words: 12386 - Pages: 50

Premium Essay

Cool

...financial market in many emerging countries and hence its role in economic development can not be overemphasized. In addition, world over, financial markets are getting less insular. The investors in developed countries are seeking investment opportunities beyond the confines of their domestic economy to enhance return and diversify risks. The investment in stock involves many risks. The investor has to know the exact time to buy and sell a security. The investors have to carry analysis before investing in any stocks. Most of the investors are unaware about the analysis to be carried out before investing. The study involves analysis of earnings per share, price to earnings and analysis of risk through beta value, of the banks in equity market. Technical analysis helps the investor to know whether the stock is in over sold region or over bought region and to find any trend reversals. Based on these analysis investor can make buy or sell decision. Indian banking industry...

Words: 12842 - Pages: 52

Premium Essay

Disadvantages Of IMPS

...Immediate Payment Service (IMPS): Introduction IMPS is a service provided by Indian banks to their customers to help them carry out interbank funds transfers in real-time. Customers do not need to wait for the bank to open to transfer money and are free to transfer funds on weekends, holidays or weekdays. The terms of service may be slightly different from one bank to another. The maximum amount that the customers can transfer using IMPS is Rs. 2 lakh. Here are a few ways people can use IMPS: • Transfer funds • Receive payments • Carry out mobile banking transactions • Make merchant payments • Search Aadhaar Seeding status with the bank account IMPS Transaction Charges Banks levy fees on each IMPS transaction. The rate may vary slightly...

Words: 1050 - Pages: 5

Premium Essay

Google

...5/20/2015 How to Open a Bank Account under PMJDY? — JanDhanYojana.Net JanDhanYojana.Net HOW TO OPEN BANKS APPLICATION FORM 0 Tweet CHOTA KHATA IMPLEMENTATION 1 Like 26 RUPAY CARD HIGHLIGHTS LAST DATE 39 How to Open a Bank Account under PMJDY? Zero Account Opening* icicidirect.com/zeroacopening T&C apply. Online Share Trading Made Easy with ICICIdirect.com. Children Investment Plan myuniverse.co.in/ZipSip Invest as low as Rs 1000pm in SIPs in 2Mins & create long­term wealth The Jan Dhan Yojana has made opening an account pretty easily. The Reserve Bank of India has also reduced the strictness of opening the account pretty easily. Previously opening an account was a long process and thus it took a long time. With these new norms creating an account is a pretty Apply Credit Card Online simple and easy. Opening of the account has become a fast bankbazaar.com/Flash_Sale paced process and now if you are looking to open a new Get a Free Rs.1500* Gift Card. Compare over 30 Options. Apply Now! Open Free* Trading A/C rsec.co.in/Request_a_Call Online with Reliance Securities & Enjoy Competitive Brokerage Plans. account t will only take few minutes. A Bank account these days can be opened with the help of an Aadhar card. This card or any identification proof will be helpful in opening an account in the country’s major Public and Private sector bank. For opening an account you will......

Words: 1022 - Pages: 5

Free Essay

Gjdsjkshjcs

...BARODA MANIPAL SCHOOL OF BANKING POST GRADUATE DIPLOMA IN BANKING AND FINANCE HANDBOOK FOR PARTICIPANTS TABLE OF CONTENTS Topic Introduction Vision, Mission and Values Aim of the programme and learning outcomes Programme Structure and curriculum design Assessment Project work Student Activities Award for Best student of the batch Library Academic norms and rules General Rules & Regulations Hostel Rules Regulations governing discipline for participants at BMSB Rules for issuing Night out pass to BMSB participants Appendix A: Grading system of Manipal University for PGDB&F course Appendix B: Format for seeking permission for time off / leaving campus during academic hours / Leave application Page No. 3 3 3 3 6 8 8 8 9 10 11 13 18 24 25 27 2 PROGRAMME DETAILS Introduction Bank of Baroda and the Manipal Group have joined hands to set up Baroda Manipal School of Banking (BMSB) to cater to the needs of providing well trained Banking personnel to Bank of Baroda. A special one year programme has been developed to train young graduates in all facets of Banking and Management for absorption into Bank of Baroda on their successful completion of the course. On successful completion of the programme, the programme participants would be awarded Postgraduate Diploma in Banking and Finance by the Manipal University. Vision: Shaping young minds into professional, tech-savvy Bankers Mission: To be one of the best Banking schools in India, developing Professional......

Words: 8678 - Pages: 35

Free Essay

Risk Management in Banks

...RISK MANAGEMENT IN BANKS The business of banking today is synonymous with active risk management than it was ever before. The success and failure of a banking institution heavily depends on the strength of the risk management system in the current environment. This is true as the very business of banking is risk-taking as an intermediary, i.e. interposing between savers (depositor) on one hand and the borrower on the other hand, thereby accepting the risks of intermediation. Risk Management: Meaning & Components A risk can be defined as an unplanned event with financial consequences resulting in loss or reduced earnings. Therefore, a risky proposition is one with potential profit or a looming loss. Risk stems from uncertainty or unpredictability of the future. In commercial and business risk generates profit or loss depending upon the way in which it is managed. Risk can be defined as the volatility of the potential outcome.  Risk is the possibility of something adverse happening.   Risk management is the process of assessing risk, taking steps to reduce risk to an acceptable level and maintaining that level of risk. The essential components of any risk management system are – * Risk Identification: i.e. the naming and defining of each type of risk associated with a transaction or type of product or service; * Risk Measurement: i.e. the estimation of the size, probability and timing of potential loss under various scenarios; * Risk Control: i.e....

Words: 1618 - Pages: 7

Premium Essay

Bob Hr Policies

...HR Objectives * To initiate & institutionalize globally competitive HR practices in the Bank in our pursuit to become a Bank of international standards and to become an employer of preferred choice; * To put in place relevant HRD strategies and use modern methodologies to undertake organizational renewal; identify and nurture talent, bring about marked changes in the mindset of employees at all levels so as to enhance HR Quality; * To create a performance-driven culture and an exciting workplace for the employees * To create a pool of entrepreneurial managers and business leaders for future; * To inculcate a strong and effective sales and service culture across levels in the organization in order to generate strong stakeholder affiliation; * To create a learning organization for employees’ intellectual growth and creativity; and to re-skill the workforce to operate in digitally enabled modern core banking environment.  HR Business Model * The Strategic HR Business Model adopted by Bank of Baroda incorporates its HR Mission and Philosophy and is focused towards attainment of long-term organizational goals. A very strong Organizational Leadership at different levels forms the key link in the Model. These are: * Strategic Leadership - Corporate level * Business Leadership - Zonal & Regional level  * Operational Leadership - Business unit level i.e. branch * The two vital Human Resource sub-systems i.e. HR Planning &......

Words: 1430 - Pages: 6

Premium Essay

A Case Study of Banks in Fiji

...A CASE STUDY ON BANKS IN FIJI COMPILED BY: SHINAL PRIYANKA CHAND 1 INTRODUCTION Fiji has a well developed financial system that not only is secure and sound but has remained flexible despite the recent global financial crisis. The strong involvement of the banking industry to the Fiji Financial System has been a major factor in this regard. Over the years the Banks have invested heavily in Fiji and have remained committed to delivering services that have helped shape and develop our country into what it is today. At the end of 2010 the commercial bank’s assets alone was approximately 42% of the entire financial system and this highlights the importance of this industry in the local economy. The value of total assets of the commercial banks at the end of 2010 was $4.5b and equates to around 75% of GDP. Commercial banks are financial institutions that primarily intermediate between the savers and the borrowers in an economy. They also buy and sell foreign currencies and facilitate trade and the transfer of payments both domestically and across international borders. It is these very transactions that help to pay for our salaries, the importation of goods and services that we use almost every day, and provide the much needed capital for investment. At the end of 2010, the total loan book value of all banks stood at $3.1b and this has grown by 159% over the last 10 years. Furthermore, Commercial banks play an......

Words: 4408 - Pages: 18

Free Essay

Market Structure

...Oscars J.K. Simmons, "Whiplash" WINNER supporting role Best Supporting Actress * Patricia Arquette, "Boyhood" WINNER Directing * Alejandro González Iñárritu, "Birdman" WINNER Best Actor Eddie Redmayne, "The Theory of Everything" WINNER Best Actress Julianne Moore, "Still Alice" WINNER Best Picture "Birdman" WINNER today's Current Affairs : 03 - 03 - 2015 1) New Delhi Chief Secretary: IAS officer Kewal K Sharma was on 3 March 2015 appointed as Chief Secretary of Delhi. His appointment was approved by Union Home Ministry. At present, Sharma is the chief secretary of Goa. Sharma was appointed as the Goa chief secretary on 1 January 2015. 2) Global Billionaire’s 2015 annual list The United States topped the list with 536 rich people, followed by China at 213 rich people, Germany at 103 rich people and India at 90 rich people. Richest Person : Bill Gates (79.2 billion US dollars). 2nd Richest Person: Carlos Slim ( 77.1 billion US dollars ) Indians in this list : Mukesh Ambani – Reliance Industries Limited, ranked 39, Dilip Shanghvi ranked 44 and Azim Premji ranked 48. 3) Chairman of National Book Trust : Baldev Sharma as chairman of National Book Trust (NBT). He replaced A. Sethumadhavan. 4) Dubai Duty Free Tennis Championships: Roger Federer on 28 February 2015 won the Dubai Duty Free Tennis Championships title. To lift his seventh Dubai Championship title, Federer defeated world number one Novak Djokovic of Serbia 6-3, 7-5. 5) Olacabs acquired......

Words: 1692 - Pages: 7

Premium Essay

Indian Banking Sector Update

...board on the PSU banks ‘bribery for loans’ scam, 2G and MFI loans, liquidity concerns and rising G-Sec yields. However, one has to take a call on whether the sector will keep correcting further. We believe the sector will continue to remain under pressure in the near term where stocks may not give a sharp bounce-back but shall remain around these levels until we are able to see a sharp uptick in credit and deposits growth alongside pressure on yields easing off. Exhibit 1: Tight liquidity, short term rates up – longer term still better off 10 9 8 (%) 7 6 5 4 3 30-Nov-09 31-May-10 31-Aug-10 31-Mar-10 30-Nov-10 30-Sep-10 31-Oct-09 31-Jan-10 31-Dec-09 30-Jun-10 28-Feb-10 30-Apr-10 31-Oct-10 31-Jul-10 Bank Nifty Nifty (RHS) Repo Source: Bloomberg, ICICIdirect.com Research 1 Yr Gsec 3M CD 10 Yr Gsec The recent bribery for loans scam concern, mounting pension liabilities remain an overhang on the sector. We expect a reduction in valuation multiples of PSU banks, particularly midcap PSU banks. Their range of 1.5x-2x may shift to 1.4-1.8x. We recommend investors buy large cap stocks like HDFC Bank (higher CASA and corrected), Bank of Baroda (strong asset book) and among other midcaps Oriental Bank of Commerce (cheap valuation) and Development Credit Bank (sharp correction and turning profitable) in current market conditions. Exhibit 2: Banking stocks - Price Correction Bank Bank of Baroda Bank of India Dena Bank IDBI Indian Overseas Bank Oriental Bank of......

Words: 5522 - Pages: 23

Premium Essay

Rbi Directions on Inspection and Scrutiny, Acquisition and Amalgamation of Banks, and Foreign Banks.

...INSPECTION DEPARTMENT CENTRAL OFFICE Inspection Department was set up along with the formation of the Reserve Bank of India in 1935. Objectives The objectives of the Department are: ™ To assess in clear terms the achieved and achievable performance of the Offices/branches and Central Office Departments with the available resources. ™ To suggest appropriate improvements so that performance level could be enhanced further. ™ To oversee the overall Audit function and its various mechanisms put in place. ™ To give feedback to the Top Management on the performance of Offices and Central Office Departments. Streams of Inspection in the Bank Presently, the following types of inspections are carried out/co-ordinated by the Inspection Department as per the periodicity indicated against them. • Management Audit & System Inspection • Information System Audit • Snap Audit • Concurrent Audit • Control Self Assessment Audit Management Audit & System Inspection Under the Management Audit and System Inspection (MA & SI), the inspection teams examine, evaluate and report on the adequacy and reliability of the existing systems and follow-up to ensure that laws, regulations, internal policies and procedures are meticulously followed and the work is carried out as per defined procedures and Central Office instructions.......

Words: 2715 - Pages: 11

Premium Essay

Impact of Information Technology in Banking Sector

...S.No. | Bank | Tenure | Interest Rate | 1 | Lakshmi Vilas Bank | 1 year to less than 2 years | 10.50% | 2 | Tamil Nadu Mercantile Bank | 1 year to less than 2 years | 10.25% | 3 | City Union Bank | Above 3 years upto & inclusive of 5 years | 10.10% | 4 | Dhanalaxmi Bank | 300 days | 10.00% | 5 | State Bank of Travancore | 1 year and above | 9.50% | 6 | South Indian Bank | 300 days | 10.00% | 7 | Karur Vysya Bank | 1 year to 2 years | 10.00% | 8 | State Bank of Patiala | 999 days | 9.75% | 9 | Syndicate Bank | 211 to 269 days | 9.55% | 10 | Punjab and Sind Bank | 500 days | 9.75% | 11 | Karnataka Bank | 1 year to 2 years | 9.75% | 12 | Corporation Bank | 12 months | 9.65% | 13 | Yes Bank | 480 days | 9.60% | 14 | Kotak Bank | 1 Year & above upto and inclusive of 389 Days | 9.50% | 15 | IDBI Bank | 500 days | 9.50% | 16 | J&K Bank | 2 years to less than 5 years | 9.50% | 17 | Federal Bank | 1 year | 9.75% | 18 | Central Bank of India | 2 yr to less than 3 years | 9.30% | 19 | Axis Bank | 1 year to less than 14 months | 9.40% | 20 | Andhra Bank | 1 year | 9.40% | 21 | Vijaya Bank | 2 years to less than 3 years | 9.35% | 22 | Bank of Baroda | 444 days | 9.35% | 23 | Dena Bank | 1 year | 9.60% | 24 | Canara Bank | 1 year | 9.25% | 25 | Indian Overseas Bank | 1 year | 9.50% | 26 | ICICI Bank | 590 and 990 days | 9.25% | 27 | Bank of India | 555 days | 9.25% | 28 | Indian Bank | 1 year to less than 3 years |......

Words: 304 - Pages: 2

Premium Essay

Financial Inclusion

...Issue 1 - September 2012 Department of Financial Services Ministry of Finance Government of India Banking, Insurance, Pension A Journal of the Department of Financial Services Theme : Financial Inclusion Contents • Editorial and Messages • Financial Inclusion • Recent developments in Banking • Recent developments in Insurance • Recent developments in Pensions • Important appointments Publication issued by the Department of Financial Services, Ministry of Finance, Government of India odern economies depend upon efficient allocation and optimal utilisation of savings and credit. Banks, Insurance companies and Financial Institutions (FIs) play a pivotal role in undertaking this function and ensuring that high economic growth is sustained. In India, these institutions have facilitated the growth in the economy and have displayed remarkable resilience in the post financial crisis period. In the recent past, though the Indian economy has slowed down, Financing, Insurance, Real Estate and Business Services continue to record impressive growth of over 9 per cent. To improve the functioning of various FIs, the Department of Financial Services (DFS) has taken several initiatives and many more on the anvil. These include steps aimed to achieve effective financial inclusion, improve flow of agriculture credit and lending to minorities and for education, payments and receipts through electronic mode, infrastructure financing, debt recovery, timely settlement of......

Words: 8127 - Pages: 33

Premium Essay

Performance Management

...Pothan (Vice President – Institutional Banking Group, Development Bank of Singapore (DBS), Bangalore) Presented by Aditya Shetty Roll No. 258 MBA-Core Div C NMIMS 03-June-2011 Preface This project report has been prepared as part of the Summer Internship Program of the MBA-Core course curriculum at Narsee Monjee Institute of Management Studies (NMIMS), Mumbai. This is in partial fulfilment of the requirements of the MBA programme. The report focuses on the Small and Medium Enterprises (SME) segment of borrowers. SME market is the growing and upcoming sector in the banking industry. This encourages entrepreneurs to develop their company from small sized to the future big corporate. The basic aim of the project is an understanding of the SME market in Bangalore and designing a strategy for Development Bank of Singapore (DBS) to enter this segment. This subject was chosen since the subject is a new& developing field for the foreign banks and private banks. SME products help in understanding the various funding & non funding based lending mechanisms. This project will help me understand various means of understanding the various lending mechanisms used by banks. This understanding of SME business will help in the future to know more about the banking industry. Bangalore Aditya Shetty 03-June-2011 Acknowledgement I am thankful to Development Bank of Singapore (DBS) Bank to give me an opportunity to carry out my summer......

Words: 11564 - Pages: 47