- News in Vietnam
- 27 September 2021
FDI enterprises worry about supply chain disruptions
The Covid-19 epidemic continues to break out in many places at home and abroad. Many FDI had to suspend production. Experts forecast that strict epidemic prevention and control could cause disruptions in domestic production and global supply chains.
Manufacturing enterprises are only allowed to operate when they have to ensure compliance with “3 activities in 1 place” or “1 route, 2 destinations”, many FDI enterprises are pretty worried about the risk of supply chain disruption.
Nike is a business that may soon face a shortage of sports shoes to supply the market because two of the suppliers of this brand in Vietnam are Changshin Vietnam (Korea) and Nike Inc. Pou Chen (Taiwan) has suspended operations.
Nike does not have a factory in Vietnam but operates through contracts with factories stretching from North to South. Nike suppliers are located all over the country. Some of their Bac Giang and Bac Ninh factories have been severely affected in the past few months. Currently, Covid-19 has hit the brand’s suppliers in Ho Chi Minh City, Binh Duong, Dong Nai, and Long An.
In addition to difficulties in the supply chain, sneakers brands and their suppliers will have to bear more burdens such as testing costs, quarantine fees, and food and tents for workers to stay in place work.
Information from the Vietnam Association of Supporting Industries (VASI) said that although that can still maintain production, nearly 50% of VASI businesses have experienced a decrease in revenue. After four outbreaks of the epidemic, the show became difficult, and the internal strength of enterprises gradually weakened. Especially in the fourth wave of the epidemic, in Ho Chi Minh City and many industrial zones, many businesses were forced to stop production, delay delivery, etc. The epidemic has caused supply chains in the manufacturing industry in Vietnam and a broken world.
In Vietnam, the epidemic is breaking out in industrial parks, causing many businesses to continue to fall into difficult situations, lacking components and materials for production. Due to the stressful situation of the Covid-19 epidemic, last week, Samsung Electronics suspended production in 3/16 factories in Ho Chi Minh City. Moreover, Hyundai Thanh Cong is expected to cut 20% of capacity and risk having to continue cutting if there is a shortage of chips. The production of this business has been significantly affected due to the lack of chip supply in the market.