Company History/

  • Home
  • Company History
Share:

THE COMPANY'S ESTABLISHMENT AND DEVELOPMENT

During over the past three decades, CJ CTE has experienced different developing stages, besides all the advantages, the company has faced with many other difficulties. But a pretty consistent specific is that CJ CTE always shows its self-reliance, creativeness, in any circumstancy, to overcome its difficulties with a high spririt of solidarity from its collective group that always attaches to each other and to the enterprise’s common career. Thanks to that, CJ CTE has overcome many difficulties on its long way of development.

1. Summary of Direximco, precursor of CJ CTE:       

1.1 When talking about CTE, Direximco cannot be disregarded. Direximco was born in the background of 1979 - 1980, the production of industry and small craft industry of the City was nearly come to a standstill because of lack of materials, spare parts, works for labors… Besides, the government had to solve all  indispensable consequences of the country after  the war lasted tens of years; moreover, it also had to face with a new war at the two borders in the North and the Southwest.

According to the Resolution 6 of the Central Committee and the Resolution 26 of the Politburos, before a pressing demand of the general situation, by the end of April 1980,  the Hochiminh City Committee and the People’s Committee set forth the policy to form an Import-Export Team belonged to the Cooperative Union of Small Craft Industry of Hochiminh City. Through an experimental year, a lot of import-export deals under the new style shown a positive effect and gained a good business efficiency. Then, the government of the City issued its Decision no. 104/QĐ-UB dated 30 May 1981 to allow the establishment of Saigon Direximco (and other 3 import-export companies : Cholimex, Ramico, Ficonimex) in the City area.

1.2 In  the scanty budget of the City, according to the instructions of the Hochiminh City Committee and the People’s Committee, Direximco operated by its self-reliance under the motto of “two possibilities” (it can mobilize the capital from local and foreign countries and can submit an exact policy for immediate approval), and of “two impossibilities” (it cannot get the State’s budget capital and cannot loan from the import-export foreign currency fund). This is a creative and brave policy in that time history situation.

With a flexible way, from small to larger scale, investment of short term for a longer,  Direximco made a rapid development leap on its import-export turnovers At the same time, Direximco gained a profit and price difference of 1.6 billion Dong. This is a big amount at the beginning of 80 decade.
During Direximco’s operation, although business was being its main activity, the Leader  Board identified the trend of neighborhood provinces to do the imports/ exports by themselves, especially in the rude and semi-processing exports, and gradually become independent of the City. Since then, Direximco was required to have to organize some its own subsidiaries, to take its own initiative in looking for a long and stable export sources with high business efficiency basing on the potential and strong position of science and technology, the City’skill… by producing Refined goods for export. The investment decision on building processing subsidiaries shown this strategic intention. In March, 1982, Direximco started to build 2 processing factories for Fishery and Duck at  125/208 Road 14th, Ward 20, Tan Binh Dist., on a hollow area that needs to be basically renovated. With its great effort, after 95 days of urgent construction the factories were put into use on 05 June 1982.
Regarding the scale of premises, the first area of the whole processing space was 3.5 hectares, of which the architectural works were :

-
Frozen Fishery Factory
2,700 m2
-
Warehouse A, 5.000mt (built within  75 days)
l,950 m2
-
Warehouse B, 3,000mt (build within 60 days)
1,300 m2
-
Shrimp Semi-Processing Room
650m2
-
Cold storage
600 m2
-
Generator area
110 m2
-
Two water wells
100 m3/gi?
 

The Duck processing area (built within 15 days) was  l,800 m2 equipped mainly with a contact freezer, compressor….  By the end 6 months of 1982, the company processed 76mt of Frozen Shrimp, 172mt of Preserved Duct, gained its turnover of over l.7 million USD 

2. Transfer from Direximco into Cautre Enterprise: 

Basing on the Resolution 01/NQ-TW dated 14 Sep 1982 from the Politburos  and the Conference Resolution from the Standing Committee Members on the import-export (the Notice no.12/TB-TU dated 28 April 1983), the People’s Committee of HCMC issued the Decision no. 73/QĐ-UB to transfer Direximco into Cautre Enterprise (CTE).
According to the above Decision, CTE is a producer and processor for export, belonged to Foreign Trade Department of HCMC. The CTE’s products are Dried and Frozen Seafood and some other ones which are exactly stated in its annual plan. 

After several reorginzation of the City’s Foreign Trade Section, CTE belonged in turn Imp-Exp. Corporate of the City  (IMEXCO), Foreign Affairs Economy Section, Trade Service and now Saigon Trading Group.
In the transferred time, Direximco’s properties are very positive including high valued fixed assets, especially its big fund of goods.

Direximco transfeered all of its properties to Foreign Trade Service, of which the imported goods (fibers, rasins, chemicals….) valued at 10 million USD, 103 million Dong of exports and over 45 million Dong of industrial commodities.

The Foreign Trade Service returned an amount of 218 million Dong to CTE as its beginning business capital, of which: 
- Fixed capital: 143 million Dong
- Working capital: 75 million Dong

In fact, the above capital '' allocated by the Budget'' just is a part of Direximco’s accrumulation  gained from its business results. After the change in money in the country in 1985, its fixed capital converted to 14.3 million Dong. Through several revaluation according to the policy from the Finance Department and CTE’s  profit annually drawn (for its capital  kept intact) the above capital become 11.8 billon Dong, accounting about 11.4 % of its total capital  (the 1997 Balance sheet).
For working capital (75 million Dong), CTE returned full amount to the budget by the end 1984.
By the modest capital allocated, with its efforts, CTE has grown step by step to build the pretty large scale premises of the City as today.
The CTE’s growth is not really simple. Through its different stages, there has been a lot of much advantages, but also a lot of difficulties it has had to face, even the enterprise is sometimes required to have a lucid choice and high determination to overcome its hardship to avoid any standstill.

 

DEVELOPMENT STAGES OF THE ENTERPRISE
TheThirty-year operation of the enterprise can be divided into 4 main stages :
1. Stage 1983- 1989:  Producing, exporting and dealing imported goods

The operation feature in this stage was the combination of producing the exports and dealing the imports under the barter method (using the imports for mobilizing the exports), and using the profit and the price difference gained from the imports to support the exports.

1.1 Stage 1983 – 1987:  CTE, a “foot of goods” of IMEXCO
According to the Decision 73/QĐ-UB of the HCM City’s People’s Committee, after the transfer from Direximco, as many other exporting enterprises in the City, CTE  become IMEXCO’s “foot of goods”, IMEXCO was a clue among them. In the imports, CTE imported  through IMEXCO by “bartered goods” and its scope of “using right of foreign currencies”.

Under the condition that the IMEXCO’s organization was not strong enough, the management structure was still subsidized, the CTE’s self-control in finance and plan was not clearly and definitively solved, the goods usually bartered slowly… that resulted in stagnating the mobilization of materials for making goods, and much affecting the enterprise’s operation.

On the other hand, the CTE’s technical equipment and machinery and other means were not catching the production development that needs to be improved.
In the first 2 years, the export turnover was standstill :
-  1983 (the end 7 months of the year)     4.2 million USD
-  1984                                                  7.5 million USD

To unbound the pending difficulties, on the one hand, the enterprise had to take advantages of the support from the higher authorities, on the other hand, CTE strived by its self-reliance to find out the way to stabilize the production and push up its activities.
One of its main immediate measures was to push up the speed of building its technical material facilities, although it faced with  a lot of difficulties in materials, and capital as well. With the motto of “construction and production at the same time”, any completed construction was put into use immediately, the spaces were used more effective. Along with taking advantage of the foreign customers’ belief in deferring payment for importing machinery, the enterprise could seize an opportunity . Toghther the great success of the Scallop campaing gathered over 12,000mt of materials making over l,000mt of Frozen, Dried products, or the producing and exporting plan of nearly 3,000mt of Frozen Port for the Soviet Union in 2 years of 1985 and 1986 proved this creative method. Consequently, its export turnover in 1985 - 1987 considerably increased :
- 1985: 10.3 million USD/R
- 1986: 16.5 million USD/R
- 1987: 22.1 million USD/R


1.2  Stage 1988 – 1989: CTE started its direct exports.
The turnover in 1988 and 1989 had an obvious change :

No.
Year
Export turnover
Import turnover
1
1988
18.2 million USD/R
22.3 million USD/R
2
1989
25.0 million USD/R
18.4 million USD/R
 

The economy in the region by the end of 1988, early 1989 in general, and in the whole country in particular, entered a new stage with much difficulties.
- Industrial and small craft production was brought to a standstill, a lot of smuggled goods. Many companies abundantly done the imports without any plan that made  the raw materials and materials imported for their production (fibers, resins, chemicals… ) over stock, long storage, slow capital circle… they forced to sell them at a loss to take back their capital and continue their production. The exchange rate of the imports was usually lower than the one of the exports.
- Trading the imports, in fact, lost the effectiveness in supporting the exports.
- For the exports, the enterprise had its own difficulty as follows : 
a. Local price of materials were increasing basing on the devaluation speed of Vietnam currency
b. The worldwide market fluctuated disadvantageously: the enterprise’s export price of some main product (frozen shrimp…) was decreased due to the weak market consumption.

c.  High banking interests.
d.  Bankrupt effect from many local and foreign companies made difficult for the enterprise to take back its debts, slow inventory clearance, high obligation payable and the import-export tax policy was unreasonable
e.  Lack of power for production…..
The enterprise’s business and production was seriously affected by all of the above factors  : the average exchange rate of the exports in 1989 was up to 4,408 VND/1USD-R while that of the imports (after  deducting the import tax and circulation fee) was 4,281VND/1USD-R.

2. Stage 1990 - 1998: Entering in refining export goods, ceasing the import business.

Features of new business policy can be summarized as follows :

- Focusing on refeining export goods, not gathering the rude exports from outside.
- After its 20-year operation and efforts, quickly reducing and gradually ceasing the import business, focusing on producing export goods.
- The main imports were raw materials and materials for the enterprise’s production.
- Reviewing the exports, selecting some products including the new ones that the enterprise can have condition to make  good with  high efficiency, long development prospect for its investment.  
- Ajusting the exports, additionally producing new products such as Tea, Refined Mushroom, etc., besides its seafood products.
- Setting up the business efficiency as its first range. Carefully considering the economic efficency when drawing a plan and doing the exports, it is unnecessary to run after profits.
As a result, the enterprise overcome sooner its difficulties and continuously gained profit from 1991 onwards, although the direct export turnover sometimes fluctuated
No.
Year
Export turnover (1.000 USD)
Import turnover (1.000 USD)
Business efficiency
(Profit before taxes)  Million Dong
1
1990
10,916
6,200
2,018
2
1991
10,346
486
5,773
3
1992
16,113
244
11,991
4
1993
17,198
2,124
23,358
5
1994
10,110
4.009
13,528
6
1995
7,658
3,611
9,063
7
1996
4,908
961
9,103
8
1997
6,278
282
9,121
9
1998
2,220
489
3,300
 

From 1992, the enterprise started to do some joint venture projects from abroad as follows :

o Raising and Processing Duck and Fish for export Joint Venture Company (FOSACO) with an investment capital of 4 million USD of which the enterprise contributed 40 % (1,600,000 USD). Partner : Taiwanse company
After a time of operation, the joint venture company did not have any effect as expected, the enterprise requested to transfer the capital to the foreign partner and it was approved by the Planning and Investment Department.
o NORTH – SOUTH TEA JOINT VENTURE CORPORATION with an investment capital of 2.604 million USD of the enterprise contributed 50% (l.302 million USD).
Partner : Taiwanese company
After that , the two Party agreed to dissolve for their own business. The disolvent decision was approved by the Planning and Investment Department from 1 February 1995.
o NATURAL FOODS CO.,LTD, investment capital of 1 million USD of which the enterprise contributed 50% (500,000 USD). Partner : Japanese company which operated by the end of 1993 to 1998.
      
Also, the enterprise contributed its capital into 3 Joint stock Banks in the City.   

3. Stage 1999 - 2005: due to its increasing efforts, the enterprise today has built its premises larger and larger.

From the first space of 3.5 hectares, now it is 7.5 hectare of which over 30,000m2 of production areas, warehouse, cold storages and other subsidiary places.
Its equipment machinery is invested strong enough and capable to product and process various kinds of seafood, processed food, tea and other agricultural products and export to the European  countries, Japan, USA, Taiwan, Korea…. with an average annual volume of over   7,000mt and a turnover from 17 to 18 million USD/year.

Its equipment machinery is gradually innovated and newly installed by the technology from European and Japan that allows the enterprise to supply about  8,500mt of various kinds of products/year. Its freezing capacity is over 60mt/day and its cold storage capacity is 1,000mt of products.

To enable its goods to ingrate into the worldwide market, the enterprise applied the quality management system and food safety under HACCP plan in 1999, approved the code to export its bivalve Mollucs to the European countries in 2000 and gained the ISO 9001-2002 in 2003 certified by TUV CERT – Germany. Its trademark is quickly registered in 25 countries and gone on with other 23 countries.

3. Stage 2006 up to now:

Under the Decision no. 1398/QĐ dated 31 March 2005 from the People’s Committee of HCMC, the enterprise carried out its equitization. The purpose of equitizattion is to enhance its business efficiency and competition, to develop its self-reliance as well its employees’ creativeness, to mobilize more capital from outside for the enterprise’s development, and uphold the real mastery role of its labor force and shareholders.
Under the Decision no. 1817/QĐ dated 14 April 2006 from the People’s Committee of HCMC approved the plan of transferring Cautre Enterprise into CAUTRE EXPORT GOODS PROCESSING JOINT STOCK COMPANY. 

After equitization, the enterprisem is changed as follows :

English name: CJ CAUTRE FOODS JOINT STOCK COMPANY

Abbreviation: CJ CTE JSCO
Head office: 125/208 Luong The Vinh St., Tan Phu Ward, HCMC

CJ Cautre Foods Joint Stock Company has :
- its own legal entity in compliance with Vietnam Laws from its business registration.
- its independent economic accounting system.
- its own stamp, and banking account as law regulations.
- its organization, operation and business registration. under the Charter of Joint Stock Company and the Enterprise Law as stipulated

Charter capital: 117,000,000,000 VND (One hundred and seventeen billion Dong).
The first share issuance: 11,700,000 shares (eleven million and seven hundred thousand) valued at 10.000VND/share.

Over 30-year establishment and operation, CJ CTE is always an unit  well executing all of the guidelines and policies from the Communist Party and the State, overfulfilling its annual assigned plan, fully implementing the tax targets, keeping and developing its intact capital,