Want to be in the loop?
subscribe to
our notification
Business News
FOOTWEAR GIANTS A STEP AHEAD IN PRODUCTION RESTART
Foreign footwear producers are maintaining their commitment to sourcing products from Vietnam as factories enjoy resumption of production following heavy delays and restrictions.
Around 200 Nike subcontractors in Vietnam have finally resumed production after the Delta variant caused temporary factory closures this summer. The sportswear giant intends to ramp up its production even further in Vietnam, according to chief sustainability officer Noel Kinder.
Nguyen Chi Trung, vice chairman of the Vietnam Leather and Footwear Association (LEFASO), said that groups like Nike continue to believe in Vietnam as one of the best places to provide quality footwear products to meet the needs of their customers. Having placed trust in Vietnam’s strategy to fight against the pandemic, according to Trung, major footwear groups are signing contracts with Vietnamese partners rather than moving orders out of the country.
Trung added that about 70-80 per cent of workers have returned to work at factories in Vietnam’s southern industrial zones in provinces such as Binh Duong, Dong Nai, and Long An. However, the lack of human resources will hinder factories from achieving full capacity. “There is also the risk of potential outbreaks as factories revive operations, and anxiety among workers about the pandemic will likely affect the quality of products,” Trung warned.
Vietnam’s footwear industry is labour-intensive, so many companies were forced to temporarily halt operations because they failed to accommodate large amounts of workers under stay-at-work models. The supply chain was disrupted for four months during social distancing measures, ultimately causing delays in product delivery and dampening buyers’ trust in Vietnamese market.
Le Quoc Thanh is general director of Feng Tay Group, which boasts five factories in Dong Nai with over 64,000 workers. After one month of resuming production in October, after all its factories were forced to close, Thanh noted that 80 per cent of workers had returned. “We don’t lack year-end orders from foreign brands but our challenge now is to recruit enough workforce to achieve 100 per cent capacity,” Thanh said.
In the same vein, a representative of Gia Dinh Footwear said that the company has reopened five factories in southern Vietnam to supply products to overseas buyers like Mango, Clarks, and Polo. The company, which employs 5,000 people, was able to produce up to half a million pairs of shoes per month for export before the pandemic emerged. However, it can only currently fulfil 70 per cent of its orders.
Meanwhile, 70 per cent of the workforce has so far returned to Pou Chen Corporation, a major Nike manufacturing partner. Pou Chen closed its factory in Ho Chi Minh City in July because of rising infections among its workers, and the company could not comply with stay-at-work methods due to the huge number of workers at its disposal.
Many factory owners have said they only expect to fully resume operations from the second half of 2022. At the moment, they are striving to fulfil a moderate number of orders for the Christmas and New Year seasons in overseas markets.
Trung from LEFASO stated that the main challenges for Vietnam’s footwear industry when reopening is to maintain orders and retain foreign buyers. “The country must keep the supply chain undisrupted in upcoming outbreaks,” he said. “If Vietnam can contain the pandemic and ensure safe living with COVID-19, foreign brands will be here to stay with Vietnam rather than moving orders to China, India, or Bangladesh.”
Trung noted that, for example, Ho Chi Minh City Department of Health announced guidance to separate F0 coronavirus cases at factories so that production activities can be continued – which reflects the efforts of the government and health ministry to avoid further supply chain disruption and offers up a positive outlook. “Indeed, we have seen positive signs for Vietnam’s footwear industry. Exports should recover by year-end thanks to rising orders. In 2022, the industry is expected to rebound strongly from the pandemic brought by a wide range of free trade agreements Vietnam has signed,” Trung added.
Source: VIR
Related News
![Card image cap](/uploads/news/Investment6.jpg)
VIETNAM ONE OF FASTEST-GROWING E-COMMERCE MARKETS IN SOUTHEAST ASIA
The report released on July 16 highlighted that the total GMV of Southeast Asia’s eight leading e-commerce platforms rose to $114.6 billion in 2023, up 15 per cent from 2022. The key drivers for the region's e-commerce GMV expansion in 2023 are Vietnam and Thailand, growing 52.9 per cent and 34.1 per cent on-year, respectively.
![Card image cap](/uploads/news/Industrial%20Zone.jpg)
VIỆT NAM TARGETS FULL MOBILE BROADBAND COVERAGE ON HIGHWAYS, INDUSTRIAL ZONES BY 2025
By 2025, Việt Nam aims to achieve one hundred per cent mobile broadband coverage on all national highways, expressways and railways under a plan to enhance the quality of Việt Nam’s mobile telecommunications network by 2025, which has been approved by the Ministry of Information and Communications (MIC).
![Card image cap](/uploads/Logo/Cathay%20%281%29.jpg)
ONE-TIME OFFER: COMPLEMENTARY CATHAY PACIFIC LOUNGE PASS
Begin your trip on the right note in Cathay Pacific’s first-ever ferry lounge, located at Shenzhen’s Shekou Cruise home port. Situated at the end of the pier, the ferry lounge offers a breathtaking 270-degree view of the sea. You can immerse yourself in sheer luxury and revel in the panoramic beauty. Catch a glimpse of Hong Kong in the distance.
![Card image cap](/uploads/news/Security.jpg)
2025 PIVOTAL FOR STOCK MARKET UPGRADE EFFORT
The Ministry of Finance (MoF) is expected to soon publish the entire content of the draft circular amending and supplementing four circulars on transactions, registration, depository, and clearing, as well as operations of securities companies and information disclosure. This move, along with feedback and explanations, aims to meet the criteria for upgrading Vietnam’s stock market.
![Card image cap](/uploads/news/bn-01.jpg)
VIETNAM INTENSIFIES E-COMMERCE TAX SCRUTINY
The department plans to offer guidance for and hold direct dialogues with e-commerce taxpayers to ensure compliance. Efforts will also include updating the e-commerce database, conducting risk analysis, and leveraging artificial intelligence (AI) to manage data and issue alerts.
![Card image cap](/uploads/news/eco2.jpg)
FOOTWEAR EXPORTS SEEN REACHING US$27 BILLION THIS YEAR
This optimistic forecast reflects the industry’s efforts to expand and diversify its markets. Lefaso indicated that Vietnam’s footwear sector will concentrate on traditional markets like the U.S. and the European Union, alongside markets with free trade agreements to maximize opportunities.