On the 24th, Vietnam’s “Investors News” published an article saying: Despite the impact of the continued raging of the new crown epidemic, Vietnam’s textile industry, leather luggage and shoemaking industry, and wood products industry are still experiencing positive growth, contributing nearly 550 million yuan to Vietnam as a whole. billion U.S. dollars in export volume.
Since the outbreak of the fourth wave of the new crown epidemic in Vietnam on April 27, 2021, there have been three Industries that have been severely impacted by the COVID-19 epidemic are the textile industry, leather luggage and shoemaking industry, and wood products industry. However, in the first nine months of 2021, these three industries still brought Vietnam nearly US$55 billion in exports.
Data from the General Administration of Customs of Vietnam show that Vietnam’s textile export value in September 2021 was only US$2.28 billion, a decrease of US$377 million compared with August 2021; compared with July 2021, Month-on-month decrease of $855 million. This is the second consecutive month of negative growth in Vietnam’s textile industry; it is also the second lowest month in terms of export value in the first nine months of this year (the lowest was in February 2021, affected by the relatively long holiday period).
As of the third quarter of 2021, Vietnam’s textile industry exports amounted to US$23.41 billion, an increase of 5.6% over the same period in 2020, with an increase of US$1.23 billion. Among them, the amount of textile exports to the United States was US$11.62 billion, an increase of 11.1%; the amount of exports to the EU market was US$2.75 billion, an increase of 2.4%; the amount of exports to the Japanese market was US$2.28 billion, a decrease of 11.6%. An important reason for the growth of Vietnam’s textile industry exports is yarn exports. In the first nine months of 2021, Vietnam’s yarn export value was US$4.1 billion, an increase of 60.2% over the same period last year. Exports of various fabrics were nearly US$600 million, an increase of 83.4% over the same period last year.
Nearly 70% of Vietnam’s textile, leather and footwear companies have been fined for contract breach
Recently, representatives from the Vietnam Textile and Apparel Association (Vitas) and the Vietnam Leather, Footwear and Luggage Association (Lefaso) held a discussion on “Working Together to Promote the Sustainable Recovery of the Textile, Leather and Footwear Industry” Zhong said that nearly 70% of Vietnam’s textile, leather and footwear companies have been subject to contractual penalties from partners due to delayed delivery, and many orders have also been transferred.
Vitas, Lefaso and Public-Private Partnership (PPP) on textile and leather shoes in September A quick survey was conducted on the “health” of companies in similar industries. Nearly half of the textile, leather and footwear companies participating in the survey said that due to the increased transportation and logistics costs each time social distancing is extended, sea shipping time has doubled (goods from Asia to the United States take 80 days, compared with only 40 days before) , so delivery is delayed. This resulted in more than 68% of brands delaying delivery and companies being punished for contract breaches. More than 12% of brands had their orders canceled and required compensation, and about 21% of the brands proactively canceled their orders without compensation. Some companies have also had to switch to very costly air transportation after negotiating with their partners to extend delivery times.
Thang Van Kim, vice chairman of the Vietnam Textile and Garment Association, said: “The textile, leather and footwear industries have never faced such serious risks of supply chain disruption and labor shortage.”
In addition, according to “Vietnam News”, the Vietnam Textile and Apparel Association (Vitas) stated that due to the impact of the epidemic, Vietnam’s textile and apparel industry may not be able to achieve its production and business goals. The association believes that the last three months of this year are an extremely difficult period for the textile industry. Among them, the biggest risk is supply chain disruption due to customers shifting orders to other markets. Secondly, due to the large number of workers returning home to avoid the epidemic, there is a labor shortage. Therefore, it will be difficult for the industry to achieve the same annual export target of US$39 billion as in 2019 before the epidemic.
Textile and garment enterprises are “increasingly difficult” or encountering a shutdown crisis due to labor shortages
Since the outbreak of the fourth wave of COVID-19, many textile and garment enterprises in Vietnam have been in “increasingly difficult situations”. “Difficult” situation, and even face the risk of bankruptcy due to forced closure or suspension of production. This has led to increased inventories and a halt in production activity, affecting labor supply as many workers return to their hometowns due to the impact of the COVID-19 pandemic.
There are still many orders from the first few months of this year, and the demand for production and operation from now to the end of the year is very large. However, if localities do not lift blockades, travel restrictions, and implement measures to promote economic development as soon as possible, this year’s textile and apparel industry export target of US$39 billion will be difficult to achieve.
As Ho Chi Minh City in Vietnam lifts its months-long blockade, thousands of factory workers have chosen to flee and return home. The large-scale outflow of workers has brought direct difficulties to Vietnam’s economic recovery, and has also left many multinational companies represented by Nike and Apple with “no one available.” According to statistics, Nike footwear production will drop by as much as 180 million pairs. Apple has said that the launch of its new iPhone 13 will be slow in supply due to production issues in Vietnam. Samsung was even forced to close several storesFactory in Vietnam.
The latest data released by Vietnam’s General Bureau of Statistics shows that in the third quarter of this year, Vietnam’s GDP shrank by 6.1% year-on-year. This is the first quarterly decline that Vietnam has experienced since 2000.
On one side is the stagnant economy and factories, and on the other side is the raging epidemic.
As the Delta variant rages on, Vietnam has seen a total of nearly 770,000 new cases in the past 3 months Among the confirmed cases, 19,000 people have died due to infection with the new coronavirus, and the deaths are basically concentrated in Ho Chi Minh City, which has a developed manufacturing industry. According to the latest news from the Ministry of Health of Vietnam, from 17:00 on October 17 to 17:00 on October 18, Vietnam reported 3,168 new confirmed cases of new coronary pneumonia, including 9 imported cases from abroad and 3,159 locally confirmed cases (detected in the community). There are 1261 cases).
According to the Economic and Commercial Office of the Embassy of the Socialist Republic of Vietnam: The textile and leather shoe industries are the two industries with the largest employment in Vietnam, of which the textile industry employs approximately 2 million people. , the leather shoe industry employs approximately 1.4 million people, and there are nearly 1.5 million people engaged in trade and business activities related to the textile and leather shoe industries. From April 2021 to the present, the COVID-19 epidemic in Vietnam has continued to change in complex ways. As a result, 28 provinces and cities have adopted varying degrees of isolation and blockade measures. Many textile and leather industry companies have suspended production or been forced to reduce their production scale, and a large number of company employees have lost their jobs.
A survey of 256 companies in the textile and leather shoe industries by the Vietnam Labor Relations Research Center shows that nearly 60% of workers have experienced a decrease in income due to intermittent work stoppages, and 62% of workers have experienced a decrease in income due to continuous work stoppages. With no source of income due to work stoppage, 77% of workers have a negative mental state. At present, insufficient income and fear of the epidemic have caused employees in textile and leather shoes companies to be physically and mentally exhausted. Millions of workers have returned to their hometowns in Ho Chi Minh City, Binh Duong Province, and Dong Nai Province. Vietnam’s textile and leather shoe industries are in the post-epidemic production recovery stage or Facing a shutdown crisis due to labor shortage. </p
