Business & Economy

Covid paralyzes Vietnam factories supplying international brands

Ho Chi Minh City, Vietnam, Jul 21 (EFE).- Vietnam’s largest outbreak of Covid-19 is affecting the production of suppliers to large international textile and footwear brands, with activity reduced or stopped completely in some factories.

According to a statement from the Vietnamese government, the factory of Taiwanese company Pouchen, the largest in Ho Chi Minh City with 56,000 workers, and a supplier to Nike, has had to close due to not being able to comply with the official requirements that workers sleep in the factory to stop the spread of infections to the community.

Pouchen is also a supplier to other international brands such as Adidas.

“The big factories that work for big brands can be closed for 15 days, but not much longer, because the brands are going to go to other countries – they have very large production,” a textile sector businessman who prefers to remain anonymous told Efe.

“That is a problem for Vietnam if this situation lasts too long. It is unfeasible that a factory with 20,000 workers keep the workers inside.”

Almost 50 percent of Nike’s footwear production is based in Vietnam, but the company has not indicated whether this stoppage will break distribution chains and affect the availability of its products in global markets.

The most affected are in Ho Chi Minh City, which on Friday will mark two weeks of its strictest confinement, with the population forced to stay home except for essential activities, and factories forced to close if workers are unable to stay there.

With around 57,000 cases and 245 deaths from Covid-19 since the start of the pandemic, Vietnam remains one of the countries with the lowest numbers, but it has been trying for weeks without success to control its strongest outbreak, which has overwhelmed its strategy of closing borders and exhaustive tracking and tracing methods.

With international tourism paralyzed, the country managed to maintain positive economic growth in 2020, especially thanks to the strength of its manufacturing industry and the trade war between Washington and Beijing, which favored the relocation of companies from China to Vietnam.

Vietnam, which in all of 2020 barely registered 1,500 Covid-19 infections, has one of the slowest vaccination rates in Asia, with 4.3 million people given one dose and only 310,000 fully immunized, out of more than 97 million inhabitants. EFE


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