Khanh Hoa Province’s Economic Revival Driven by Green Growth and Innovation

Khatoco’s garment factory, now operational with all four production lines and more than 1,000 workers, is bustling as they strive to fulfill orders for both domestic and international clientele. This positive scenario was unimaginable just three years ago for Tran Minh Quang, who oversees the Khatoco Board of Members.

Quang disclosed that besides the garment sector, all business segments within the company have shown solid recovery and are progressively transitioning towards eco-friendly production in alignment with global shifts.

The garment industry underwent an arduous phase, encountering times when production nearly came to a standstill and orders dwindled. The aftermath of the Covid-19 period, coupled with global inflation and geopolitical tensions, prompted consumers to curb spending, significantly impacting the garment sector that witnessed a decline in orders.

However, since the onset of the year, the market has rebounded, with processing prices on the rise, invigorating the company’s operations. In a mere six months, the company has accomplished 66% of its annual target, especially flourishing in the export segment where the market is witnessing a robust recovery amidst a surge in orders.

Khatoco has secured contracts that ensure operational sustainability until Q1/2025, with processing prices climbing by 5-10% compared to the year’s commencement.

“We are actively engaging in new contract negotiations and working towards establishing a high-end fashion brand linked to Nha Trang Bay, aiming to transform Nha Trang into a future fashion hub,” he stated.

The Khatoco spokesperson believes that challenges are ever-present but leveraging opportunities for recovery and growth is pivotal. Embracing changing consumer preferences, the company has pivoted from low-priced products to concentrating on top-quality, higher-priced items.

“It might sound contradictory, but when people tighten their budgets, they seek and purchase durable, high-quality products. Hence, high-quality items priced at 400,000-500,000 VND are outselling those in the 100,000-200,000 VND range,” he mentioned.

Khatoco’s narrative serves as a compelling illustration of Khanh Hoa province’s notable economic revival as of late. In the realm of tourism, there has been a significant influx of tourists. Tran Minh Duc, Director of Long Phu Tourism Joint Stock Company, proudly stated, “We have witnessed a substantial surge in tourist numbers!” Notably, last year saw a notable uptick in tourists, with the first half of this year witnessing a roughly 16% increase in tourist numbers compared to the previous year.

Engaging with VietNamNet correspondents on Hoa Lan Island in Ninh Phu (Ninh Hoa, Khanh Hoa) – the site of the company’s eco-tourism zone, Duc introduced a nature-friendly tourism model emphasizing selectivity for visitors. Despite being discerning, the island welcomes 800-1,000 visitors daily.

“Not only has there been a recovery, but the trend of visitors exploring Hoa Lan Island has been on a steady rise annually, with a significant number of international tourists from South Korea, Russia, among others,” he noted.

Nguyen Thi Le Thanh, Director of the Khanh Hoa Department of Tourism, announced that the number of overnight stays in the initial half of this year approached 5.2 million, an 88% surge compared to the analogous period in the previous year. Domestic tourists accounted for an estimated 2.8 million, marking a 40% rise, while international visitors reached nearly 2.4 million, a 3.2-fold increase from 2023. Revenue surpassed 26,072 billion VND ($1.03 billion), a 97% upswing compared to the preceding year.

Bolstered by its beach tourism allure, Khanh Hoa is poised to entice a substantial number of summer holidaymakers, setting sights on achieving the goal of hosting 9 million overnight tourists in 2024.

Having grappled with the repercussions of the Covid-19 pandemic, Khanh Hoa’s economy registered negative GRDP (Gross Regional Domestic Product) growth rates of -10.5% in 2020 and -5.58% in 2021. Through flexible, proactive, and resolute measures, Khanh Hoa’s GRDP staged an impressive recovery, reverting to a commendable growth trajectory, frequently securing top rankings nationwide.

In 2023, as per the General Statistics Office data, Khanh Hoa posted a GRDP growth rate of 10.35%, clinching the fourth spot nationally. In the initial half of this year, the province witnessed an estimated 12.73% upsurge in GRDP compared to the correlative period in the prior year, ranking second nationwide with noteworthy statistics.

Specifically, the industrial production index soared by 46%, total retail sales of goods and services amounted to around 62,585 billion VND, marking a 15.2% increase; tourism revenue nearly doubled relative to the previous year’s equivalent period; international tourists opting for Khanh Hoa surged by 3.3 times; and the province’s export turnover for the initial six months is projected to exceed 1 billion USD, up by 17%.

Chau Ngo Anh Nhan, Director of the Khanh Hoa Department of Planning and Investment, remarked, “Following the Covid-19 pandemic, the landscape in Khanh Hoa, particularly in Nha Trang, has metamorphosed. Domestic tourist numbers may have dwindled compared to pre-pandemic levels, but the service sector revenue has witnessed an upsurge. There has been a substantial influx of South Korean tourists, displaying favorable spending patterns and civilized conduct.”

“The inauguration of the final segment of the Cam Lam – Vinh Hao Expressway linking the Ho Chi Minh City – Nha Trang expressway, shaving travel time to merely 4.5 hours, has bolstered Khanh Hoa’s appeal, drawing in more visitors,” he appended.

Furthermore, the Incheon (South Korea) – Cam Ranh (Khanh Hoa) flight route, boasting over 20 daily flights, has not only enticed South Korean tourists but also American visitors, given Incheon’s status as a key international transit juncture.

Nonetheless, during the transitional phase in thought and activity, Khanh Hoa overlooked focusing adequately on industrial advancement.

Nhan highlighted that despite boasting scenic beaches and a favorable climate, Khanh Hoa fixated on bolstering tourism, leading to a tourism surge with the highest count of five-star hotel rooms nationally. While advantageous, this approach harbored risks.

When the Covid-19 crisis struck, the local economy faced instability owing to imbalances. Tourism felt the brunt of external fluctuations, prompting the province to explore additional industries capable of offsetting the decline in tourist numbers.

Reflecting on this learning curve, Khanh Hoa’s leadership recognized the necessity of economic equilibrium. While tourism remains a pivotal sector, it necessitates distinctive offerings. Specifically, the province aims to allure investments in culture, healthcare, and specialized treatments, enabling tourists to relish not only vacations but also wellness and beauty services. With a plethora of top-tier services, tourism quality is expected to enhance, rendering it more sustainable.

Regarding cultural initiatives, the province is channeling investments into a sports center on Vo Nguyen Giap Boulevard aimed at attracting major international events. Additionally, investments in museums and cultural-social endeavors are part of the community’s plan to foster local heritage preservation and amplify cultural magnetism.

Creating Diverse Tourism Opportunities in Khanh Hoa

Platforms in Khanh Hoa are working towards providing tourists with a wider range of recreational activities as opposed to the current focus on “resting and beach activities.”

Striving for Industrial Growth

The province has plans for 8-10 large industrial zones in Van Phong and two in Cam Ranh to shift the economic development focus away from tourism. The Van Phong 1 thermal power plant has already made a significant impact on industrial production.

Driving Economic Development Through Investments

By approving and adjusting multiple projects with substantial investments, Khanh Hoa is seeing a boost in its GRDP. Revoking delayed projects has also helped in speeding up ongoing projects to meet the increasing tourism demands.

Embracing Sustainability with Green Industrial Zones

In line with the Net Zero trend, Khanh Hoa is looking to attract green industrial zones to foster sustainable development. Trade promotion efforts and business agreements are being facilitated to support businesses in this green transition.

Green Initiatives in Business Practices

Khatoco, a notable company, is actively adapting to green practices by investing in modern technologies, prioritizing green energy, and implementing centralized wastewater treatment systems. The company is shifting towards natural-origin materials and pursuing certifications to meet international standards for environmental sustainability.

Balancing Economic Growth with Environmental Responsibility

Khatoco is committed to striking a balance between economic development and environmental sustainability to ensure its growth is responsible and in harmony with the environment.