Vietnam's textile and footwear industries hit by quarantine measures
06.10.2021 2916

Vietnam's textile and footwear industries hit by quarantine measures

The textile and footwear industry in Vietnam continues to suffer losses due to strict and prolonged quarantine restrictions due to the coronavirus epidemic. Companies expect delays and shortages of goods, as well as higher labor and logistics costs as the holiday season approaches, Worldfootwear.com writes.

Nike CFO Matt Friend stressed that most of Nike's factories in Vietnam are still closed due to government orders, and that production has been idle for about ten weeks since mid-July. Many companies have already begun to move production from Vietnam to other countries.

Vietnam is trying to control a serious COVID-19 Delta variant outbreak that led to severe lockdowns in July in Hanoi and Ho Chi Minh City, the latter being a major footwear manufacturing region and currently the epicenter of the coronavirus epidemic.

The government allowed factories to continue operating if they provided housing or transportation for their workers, but many businesses were unable to cover these costs or were forced to close after their employees tested positive for the coronavirus.

Manufacturing companies will be forced to pay high fines for late fulfillment of orders and risk not receiving new orders for next season.

Vietnamese Prime Minister Pham Minh Chin announced last Saturday that the government intends to loosen measures to contain the coronavirus, starting this week, in order to support the economy. However, Phan Thi Thanh Xuan, Secretary General of the Vietnam Leather, Footwear and Handbag Association, has already said that he does not expect positive results for the industry this year, and possibly next. The situation is complicated by the fact that thousands of migrant workers, who were left without work and savings, began to leave Ho Chi Minh City immediately after the quarantine restrictions were lifted. The outflow of migrant workers could further slow down Vietnam's economic recovery.

It is noted that before the pandemic, Vietnam was a leading destination for companies wishing to diversify their activities outside of China, including thanks to favorable tax policies for investors and a number of free trade agreements (with EU countries and membership in the Comprehensive and Progressive Agreement on the Pacific Partnership) ...

The textile and footwear industry in Vietnam continues to suffer losses due to strict and prolonged quarantine restrictions due to the coronavirus epidemic. Companies expect delays and ...
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