Production stalls at Taiwan factories in Vietnam due to COVID outbreak

21-Sep-2021 Intellasia | FocusTaiwan | 5:02 AM Print This Post

Several Taiwanese manufacturers in Vietnam have been struggling with production problems over the past weeks, as the southern part of the country remains in lockdown due to the latest wave of COVID-19 cases there.

Pou Chen Corp., an original design manufacturer for international footwear brands such as Nike, Adidas, Asics, New Balance, Timberland and Salomon, said recently that production at its factory in the southern Vietnam city of HCM City has ground to halt.

As a result, the Taiwanese company said, it expects a significant drop in its July-August revenue at that factory.

If the COVID-19 outbreak in southern Vietnam subsides in the fourth quarter and employees are allowed to return to work, they may be able to put in some overtime, which would make up for the third-quarter losses, Pou Chen said.

Ho Chi Minh, of the major footwear production areas in Vietnam, is the epicenter of the current COVID-19 outbreak in the Southeast Asian country, according to the government.

In the latest wave, Vietnam has been reporting more than 10,000 new COVID-19 cases per day and hundreds of deaths. As of Monday, the country had confirmed a total 687,063 cases and 17,090 deaths, according to Johns Hopkins University Coronavirus Resource Centre.

The data showed that 340,316 of those cases and 9,317 deaths had occurred over the past 28 days.

In southern parts of the country, including Ho Chi Minh, the government’s strict lockdown order was extended on September 13

for at least another two weeks, restricting people’s movement.

According to a Pou Chen executive at the Vietnam subsidiary, the company has been adhering to the government orders and has been trying to speed up vaccination of its 100,000 workers in the country, in an effort to help curb the COVID-19 outbreak.

The Pou Chen subsidiary manufactures shoes not only in Ho Chi Minh but also in Dong Nai and Tay Ninh provinces in southeastern Vietnam and Tien Giang province in the south, according to the executive.

Another Taiwanese contract footwear maker Feng Tay Group, which also supplies Nike and other international brands, said production at its Vietnam factories has been suspended for about two months.

Feng Tay said it had planned to reassign production to China, Indonesia and India, but its factories in those three countries are almost at full capacity, so it has decided to wait until it is allowed to resume work in Vietnam.

Its clients are fully aware of the Vietnam situation and are prepared to wait, the company added.

Meanwhile, Fusheng Co., a Taiwanese company that makes golf club heads, also said its production in Vietnam has been suspended since the end of July, but it was optimistic of a gradual return to normal in the fourth quarter, given that the vaccination rate in Vietnam was on the rise.

Fusheng said it is working on boost production when the Vietnamese government lifts the lockdown and production can resume.

At present, some production has been reassigned to China to make up the loss in Vietnam, but that has been limited because its China factories are almost at full capacity, the company said.

According to Fusheng, demand for golf club heads is currently strong in the United States, Japan and South Korea.


Category: Taiwan

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