35% of Vietnam's garment factories shut down, and more than 70,000 enterprises close down
Affected by this wave of new crown epidemics, Vietnam's closed manufacturing companies have greatly increased. In the first half of the year, the number of companies that closed down in Vietnam reached 70,209, a year-on-year increase of 24.9%. Among them, the textile industry, a pillar industry in Vietnam, suffered severe damage, and 35% of enterprises have been forced to close their businesses.
Vu Dejiang, chairman of the Vietnam Textile and Apparel Association, said that due to the severe impact of the new crown epidemic, the Vietnamese textile and apparel industry is facing severe challenges. In the southern region where the epidemic is most severe, a large number of textile and apparel companies have ceased production. Many companies have implemented the "three-in-place" (on-site production, on-site dining, and on-site accommodation) model for a period of time, but they are unable to stick to it. The reason is that the cost of maintaining production is too high, the production efficiency is low, and workers have to arrange food and lodging. The pressure was so great that many factories were forced to stop production. At present, only spinning, weaving, and printing and dyeing enterprises can maintain the "three-in-place" model. The common feature of these enterprises is that they use a large number of machinery and equipment, employ less labor, and it is relatively easy to arrange for workers to eat and stay on-site. However, garment manufacturing enterprises employ a large amount of labor, and some enterprises employ as many as tens of thousands of people. It is not feasible to implement the "three-in-place" model.
Vietnam’s textile industry is facing challenges such as low vaccination rates and labor shortages. Even if the epidemic is under control by the end of August, the textile industry’s exports in 2021 will only reach 33 billion U.S. dollars, a year-on-year decrease of 6%, and only 84% of the annual target.
According to the assessment of the Vietnam Direct Investment Securities Company (VNDirect), the lack of empty containers and the increasing logistics costs may affect Vietnam’s ODM and OBM orders.
According to the latest news from the Vietnamese Ministry of Health on the evening of the 19th, in the past 24 hours, there have been 10,654 confirmed cases of new coronary pneumonia in Vietnam.
As of the evening of the 19th local time, Vietnam had a total of 312,611 confirmed cases of new coronary pneumonia, of which 12,059 recovered and 7,150 died.