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(Baonghean)2013 marked the tenth anniversary of Khanh Viet Corporation (Khatoco), headquartered in Nha Trang City, Khanh Hoa Province, directly investing in Nghe An Province through one of its 25 subsidiaries, Tan Khanh An One-Member Limited Company. After 10 years, Tan Khanh An has proven the effectiveness of the investment capital, demonstrated by its remarkable growth rate, creating jobs for many workers, and being one of the units making a significant contribution to Nghe An's budget.
In preparation for the Nghe An Investment Promotion Conference in the spring of 2013, I learned that Tan Khanh An was one of 21 enterprises awarded by the Provincial People's Committee. During a meeting with engineer Pham Van Binh – the company's director – he shared his successes as well as his concerns about directly leading the company's development.
Talking to Mr. Binh, I learned a lot about Khatoco's investment path in Nghe An and the efforts of the provincial leaders to work alongside the investor to revive a factory with outdated technology, small capacity, and backward practices; as well as the great social responsibility towards the lives of 150 workers and their families. This is the story of the Nghe An Tobacco Factory in the early 21st century. For a long time, the factory operated inefficiently, with assets worth only 1.7 billion VND. At that time, the State was reorganizing the tobacco industry nationwide, so the Government only issued temporary production stamps every three months and extended the deadline for production conversion or dissolution. Facing the high risk of dissolution, the biggest question for the factory's leaders was, what would happen to the 150 workers who had dedicated their lives to the factory?
Tan Khanh An Company's packaging manufacturing plant.
That concern was the main driving force that prompted the leaders of Nghe An province and the factory's leadership to quickly find a new, effective direction to revive the unit. And this was also the origin of the 10-year "partnership" between Khatoco and Nghe An province that continues to this day. "Right at a difficult time, we directly contacted many companies and finally Khatoco decided to take over the factory as a dependent accounting unit from the beginning of June 2003 under the name Tan Khanh An," Mr. Binh recalled. With Khatoco's investment, experience, and technology, Tan Khanh An – a name that holds much meaning and hope from an investor from Khanh Hoa in Nghe An province – the factory gradually overcame its difficulties. “This phase is a crucial stepping stone for the factory's revival and its eventual transformation into an independent accounting unit. We are simultaneously producing 6-7 million cigarettes per year on a production line, while also focusing on reorganizing our workforce and preparing investment plans to expand into the plastic packaging manufacturing sector,” Mr. Binh said.
By 2006, the packaging production conversion project was completed and put into operation. Khatoco decided to convert the Tan Khanh An Factory into Tan Khanh An One-Member Limited Liability Company, operating independently, specializing in the production of cigarettes, plastic packaging, and trading.
As we entered the plastic packaging factory, Director Binh whispered in my ear, almost drowning out the sound of the machinery: “The entire company started production on the 6th day of the Lunar New Year to ensure we have enough products to deliver to customers. During this economic downturn, finding a market for our products is very difficult, but we already have orders for the entire first quarter of this year.” Understanding Tan Khanh An's business performance better, I looked at the charts comparing the company's annual growth from 2007 to 2012. Production volume, revenue, profit, and tax contributions increased steadily each year. For example, in 2007, revenue was only over 98.8 billion VND, but by 2012 it had increased to 256.6 billion VND. Even more encouraging is that revenue from plastic packaging production accounted for three-quarters of the total revenue, with cigarettes making up the remaining one-quarter. The company's tax contributions also increased rapidly from over 11.7 billion VND in 2007 to 52.5 billion VND in 2012.
The packaging production line, with a capacity of 25 million products per year, and the cigarette production line, with a capacity of 30 million products per year, operate non-stop. Products are sold to customers nationwide, from Phu Tho and Quang Ninh to Thua Thien Hue. Therefore, the income and benefits of the staff and workers are guaranteed, with an average salary of 5.3 million VND per person per month. Mr. Nguyen Xuan Anh, who has worked at the company for 7 years, happily stated: “Working here provides a stable and relatively high income compared to the general average, so I feel secure in staying here long-term. Currently, my average income is 5.2 million VND per month.” Another worker, Ms. Nguyen Thi Hong Tham, added: “I earn 4 million VND per month, not including bonuses for holidays and Tet (Lunar New Year), and various insurance benefits, which are very comprehensive. This past Tet, I received a bonus of 10 million VND, so my family had a very comfortable Lunar New Year celebration.” From the perspective of an investor and an employer, Director Binh stated: “Nghe An workers are very diligent and quick-witted in production compared to workers in many other regions of the country. The most regrettable thing is that their work discipline and industrial work ethic are not yet high. Therefore, at our factory, we have to clearly assign each step in the production line to each individual worker. Only then can we improve each person's awareness, implement a fair system of rewards and punishments to enhance responsibility, and fully utilize the strengths of the workers.”
Mr. Binh's perspective is also an objective assessment of Nghe An's workforce, which is why Tan Khanh An has found ways to maximize the qualities of Nghe An's labor force over the past 10 years. Regarding Nghe An's investment environment, he still believes that the abundant and diligent workforce remains the province's advantage in attracting investment, alongside an improving and increasingly open investment environment. "Nghe An has a lot of development potential. We are in the early stages of attracting investment, so we need to focus on changing the social and technical environment to create even greater appeal. In addition, every citizen, business in Nghe An, and even businesses already operating in Nghe An need to be empowered to become a bridge to attract investment for the province," Mr. Binh shared.
Text and photos: Thanh Duy
