September 3 – Yue Yuen Group, which is responsible for contract manufacturing business for international brands such as adidas and Nike, issued an announcement stating that due to the severe impact of the epidemic in Vietnam, the Bao Yuen Shoe Factory in Vietnam under its subsidiary Yue Yuen Industrial was closed due to… Due to the forced shutdown, most manufacturing capacity and operations were interrupted. Let’s look at the details.
September 3 – Yue Yuen Group, which is responsible for OEM manufacturing business for international brands such as adidas and Nike, issued an announcement stating:
Severely affected by the epidemic in Vietnam, the Baoyuan Shoe Factory in Vietnam, a subsidiary of Yue Yuen Industrial, was forced to suspend production, and most of its manufacturing capacity and operations were interrupted.
As the manufacturing business accounted for approximately 58% of Yue Yuen’s overall revenue in the first half of this year, and Vietnam is one of Yue Yuen’s main production bases, Vietnam accounted for 10% of total footwear exports in the first half of this year. The number of pairs of goods is about 45%. Based on the above reasons, Yue Yuen’s manufacturing business revenue will be greatly affected in the third quarter of this year.
Screenshot of Yue Yuen Group’s announcement on September 3
Baocheng further stated that in view of the fact that Vietnam has Since the epidemic has become more severe since September, the local government has adopted more stringent epidemic prevention measures, including the implementation of tougher city closure measures in Ho Chi Minh City and its surrounding provinces. In response to relevant measures, Vietnamese competent authorities have successively required factories to suspend operations. Since the shutdown on July 14, as of September 3, most of Yue Yuen’s manufacturing capacity in Vietnam has also been affected by relevant measures, causing operations to be interrupted.
Baocheng emphasized that Yue Yuen Industrial will closely monitor the situation of business interruption in Vietnam, take the health and safety of employees as the first priority, actively cooperate with the local government’s epidemic prevention regulations, and maintain maximum flexibility. Restart production when conditions permit so that operations can proceed safely and orderly. Yue Yuen will also continue to promote measures such as workplace cleaning, work diversion and workplace control, and encourage and increase the vaccination rate of employees.
Baocheng/Fengtai was forced to extend the shutdown again, and Q3 production capacity will be greatly affected
The Vietnamese factories of shoemaking duo Baocheng and Fengtai were forced to suspend operations again due to the epidemic.
Fengtai announced on September 2 that in compliance with the Vietnamese government’s epidemic prevention requirements, the suspension of operations at the Vietnamese factory has been extended to September 15. Baocheng also announced on August 31 that sub- The Baoyuan Shoe Factory located in Ho Chi Minh City, Vietnam, a subsidiary of Yue Yuen Industries, has suspended operations again due to the epidemic!
The legal person stated that the shutdown time of the shoemaking duo’s Vietnam factory will be from 7 The extension from mid-month to mid-September, and the specific time for resumption of work cannot be determined. The production capacity of the two companies in the third quarter will be greatly affected, and it is expected that there will be pressure on revenue and profits in the third quarter.
Among them, Fengtai Vietnam DVDPDODVMDS factory has suspended operations due to the increasingly severe epidemic in Vietnam. The shutdown has been extended from July 17 to 9/15 for about two months. .
As the Vietnamese factory’s shoemaking capacity accounts for more than 50% of Fengtai’s global production capacity, Fengtai’s total revenue in July was 5.87 billion yuan, which has hit a five-month low. The joint operating profit was 385 million yuan, an annual decrease of 25%. The legal person said that revenue and profits in August may be affected, and the impact on third-quarter revenue is estimated to be more than 30%.
In addition, Baocheng Group also announced on 8/31 that the Baoyuan Shoe Factory located in Ho Chi Minh City, Vietnam, a subsidiary of Yue Yuen Industrial, due to cooperating with the local government’s epidemic prevention requirements and the health and safety of colleagues For consideration, the suspension of operations of the factory has been extended again; there is no specific time for resumption of work, and it will be handled in accordance with relevant regulations of the local Vietnamese government.
Pou Chan Group’s Bao Yuan shoe factory in Ho Chi Minh City has 50,000 to 60,000 employees. It is Pou Chan’s largest overseas factory. Due to the delay in the epidemic in Vietnam cooling down, the factory has not cooled down since July. The work has been suspended since the 14th, and the resumption time has been repeatedly extended. Baocheng said that the shutdown of Baoyuan Shoe Factory has affected part of its production capacity, and it will coordinate with other factories in Indonesia, China, Cambodia, Myanmar, etc. to support production.
Because Baocheng has 6 factories in Vietnam, its footwear production capacity accounts for 45% of Baocheng’s global production capacity. Since the forced shutdown on 7/14, it has caused short-term operational fluctuations in Baocheng. 7 Monthly combined revenue was 1,712.6 billion yuan, a year-on-year decrease of nearly 12%. The impact on revenue is expected to be more obvious in August, and the overall revenue and profit performance in the third quarter will be tested. </p
