Recently, the epidemic in Vietnam remains severe, with the number of cases continuing to rise in many places and the death rate rising rapidly. The epidemic has dealt a heavy blow to Vietnam’s economy, and local companies are facing serious operating difficulties due to the epidemic.
According to statistics, 90,300 companies in Vietnam delisted in the first three quarters. At the same time, the impact of the epidemic on Vietnam’s manufacturing industry is gradually affecting many links in the industrial chain. The global supply chain of clothing, shoes and hats, electronic technology and other industries has also been disrupted. The production interruption and shipping problems have also made European and American clothing giants unbearable: they are considering re-selecting the supply chain!
98.9% of companies are facing serious difficulties due to the epidemic
90,300 companies have delisted
According to Vietnam According to data released by the General Bureau of Statistics, due to the severe impact of the new coronavirus epidemic, Vietnam’s gross domestic product (GDP) is expected to grow only 1.42% in the first nine months of 2021 compared with the same period last year. Among them, the second quarter economic data has been revised down from 6.61% growth to 6.57%; while the third quarter gross domestic product (GDP) fell 6.17% year-on-year, which was the first single-quarter decline since 2000.
Vietnam’s General Bureau of Statistics reported on the operations of enterprises nationwide in September this year A survey showed that 90,300 companies delisted across the country in the first three quarters, an increase of 15.3% over the same period last year. The survey shows that 94.3% of companies are facing difficulties due to the epidemic.
Among them, 98.9% of enterprises in 19 southern provinces and cities are facing serious difficulties due to the epidemic, especially enterprises in the southeast, where this proportion reaches 99.1%. More than 6,600 industrial enterprises across the country participated in the above survey, and 95% of them said they were affected by the epidemic. Among them, 80% of companies have increased investment due to epidemic prevention and control; 54.2% of companies have increased production costs due to rising raw material prices; 49.5% of companies have increased expenditures due to rising logistics prices; 40.8% of companies have a shortage of production raw materials; 33.4% Enterprises are experiencing labor shortages.
Production interruptions and shipping problems have made European and American clothing giants unbearable
They are considering re-selecting the supply chain!
The Vietnamese government reported in October 2021 that due to labor shortages and other constraints, the clothing export target will not be achieved, and there may be a gap of US$5 billion. The impact of the COVID-19 epidemic on Vietnam’s manufacturing industry is gradually affecting many links in the industrial chain. For example, Pou Chan Group is the world’s largest sports shoe manufacturer. October 6th was the day when its factory in Ho Chi Minh City officially resumed work. However, according to statistics on that day, only 20%-30% of the workers returned to their original jobs. More than 40,000 employees failed to return to work on time.
According to estimates from the Vietnam Textile and Garment Association, the industry originally employed 3 million people, but now 1 million of them have resigned, are temporarily unable to work, or are on unpaid leave. The association stated that the industry is facing labor shortages, supply chain disruptions and other difficulties. Foreign trade orders are not delivered in time and may not be able to meet the originally set full-year export targets.
Affected by the epidemic in Southeast Asia and the disruption of the global supply chain, various footwear and apparel retailers are shifting their production and manufacturing centers from Southeast Asia to the United States and Europe. Production disruptions in Vietnam and months-long shipping problems have pushed up costs and delayed supply delivery, forcing the fashion industry to rethink global supply chains and other issues.
At present, clothing brands such as German company Hugo Boss and Spanish Mango have transferred production and manufacturing from Vietnam to other European countries, such as Turkey, Morocco and Portugal. . In addition, American footwear retailer Steve Madden said that in addition to reducing the company’s production in Vietnam, it also plans to transfer 50% of its footwear production to Brazil and Mexico. Massimo Rennon, CEO of Italian clothing brand Benetton, said that they are increasing production in Serbia, Croatia, Turkey, Tunisia and Egypt and will halve Asian production by the end of 2022.
Lululemon (Canada), Columbia (U.S.) and Michael Kors (Michael Kors) have decided to move production out of Vietnam, re-locate and increase air transportation The use of etc. According to data from the Turkish Garment Chamber of Commerce and Association, due to increased EU orders, the country’s clothing exports will reach US$20 billion in 2021, a record high. In the first half of 2021, Bosnia and Herzegovina’s textile, leather and footwear exports in southern Europe reached US$436 million, exceeding the total exports for the whole of 2020.
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