COVID-19 Forces Vietnam Factories to Halt Production
The Ministry of Health in Vietnam recently reported a record number of 7,307 COVID-19 infections, raising Vietnam’s overall caseload to 81,678. Vietnam has been on lockdown and with this rise in infections extended their lockdown in Ho Chi Minh City through August 1, 2021. In addition, they will also be imposing further restrictions in the capital Hanoi in further effort to control the spread of the virus. With these new lockdown measures many companies have been forced to temporarily close their plants.
What companies are impacted by the lockdown?
Vietnam is a top exporter of textiles, electronics, and home goods. In Ho Chi Minh City companies in the apparel, textile, footwear, and electronics industries have been impacted. On July 13, 2021 several factories in the Saigon Hi-Tech Park were ordered to temporarily shut down after over 750 new COVID-19 cases were reported. Saigon’s Hi-Tech Park is home to 85 companies with over 45,000 workers. Specifically, Samsung Electronics HCMC CE Complex halted work at three of their plants in Ho Chi Minh City, reducing its workforce from 7,000 to 3,000.
In efforts to keep business moving, Samsung was working on plans to isolate employees at its complex. Other companies unable to house all employees on-site, including electronics manufacturer Intel, have reportedly rented nearby hotels and are using daily buses to bring employees in.
Locking down employees at their work facilities is not a long-term solution. Sleeping, eating, and working at the same for facility for months is quite a burden.
Expected Impact to on Supply Chain?
It remains unclear as to how these production suspensions will impact supply chains. However, production shutdowns at footwear manufacturers have already caused supply chain disruption at companies such as Nike, Inc. Sources reported that the company has begun using air freight to get its products out of Vietnam as quickly as possible amid shipping crunches.
Large companies that have their products manufactured in Vietnamese factories are at risk of disruption and likely to worsen in the coming weeks. Flow of cargo through Vietnamese ports is increasing which is putting pressure on logistical operations and creating potential issues with warehouse space.
How will this impact your supply chain?
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This service gives insight as it relates to this event as well as data that can help teams proactively mitigate impacts of future events through our supply chain module. Sign up for a free trial and learn how SiliconExpert can help your business’s supply chain management:
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