The Ministry of Investment and Planning of Vietnam announced that in the first half of this year, a total of 70,209 companies in Vietnam closed down, an increase of 24.9% over last year. This is equivalent to 400 companies closing down every day.
Vietnam's fourth wave of COVID-19 mutant strains is coming so fiercely that a number of industrial parks and factories are temporarily closed, production and supply chains in various regions are interrupted due to the implementation of social distancing, and the growth rate of industrial production in Vietnam has slowed down.
The 19 southern provinces and municipalities directly under the Central Government implemented social distancing in accordance with the government's instructions. Industrial production fell sharply in July, of which the industrial production index of Ho Chi Minh City fell by 19.4%.
It is reported that the main production bases of global brands from Toyota to Nike in Vietnam were forced to suspend work due to the blockade; electronics companies including Samsung and Foxconn are also facing production difficulties due to the blockade.
In addition, as the world's second largest exporter of textiles and garments, about one-third of Vietnam's textile and garment factories have been closed due to the epidemic. According to data from the Vietnam Textile and Apparel Association (Vitas), between 30% and 35% of garment factories in the country have closed down, among which Nike is one of the big brands.
After the most challenging year in history in peacetime, the global supply chain is likely to face even greater destruction.
Epidemic caused production shutdown in Vietnam factory
Due to the impact of the epidemic, Vietnam's foundries are close to "zero output", and local factories have stopped production, causing a "supply cut" crisis.
In addition, American importers and consumers have high import demand for Asian goods, especially Chinese goods, but the situation of port congestion, delivery delays, and space shortages has become more and more serious. The current products of U.S. retailers Inventory can only be maintained for about a month, setting a record for the lowest inventory in 30 years (since 1992).
"The epidemic has caused factories in South and Southeast Asia to stop production, increasing the risk of global supply chain disruption. American consumers may soon find that local shelves are empty." The US media recently warned of the epidemic to American consumers. Dilemma and impact.
According to a report from Vietnam Express, taking Nike shoes as an example, under the impact of the fourth round of the epidemic, Nike's foundry in Vietnam may face a "zero output" crisis. There are about 200 contract manufacturers in Vietnam, and the two largest contract OEMs, Baocheng Group and Chang Shin, have all shut down.
Baocheng Footwear, which has a factory in Ho Chi Minh City alone, employs about 62,000 Vietnamese workers. Nike shoes such as "coconut shoes" and sneakers, which are popular among young people, are produced in this factory. In addition, the report also wrote that in the financial report released in June this year, in the past fiscal year, Nike shoes produced in Vietnam accounted for 82% of the US consumer market. The suspension of the Vietnamese factory is alleged to be the main reason for the supply of Nike shoes in the United States.
