Semi-empty warehouses, slow deliveries, supply difficulties by large multinationals that largely depend on local manufacturing. In August in different areas of the Vietnam restrictions have been tightened to contain the spread of infections from coronavirus, due to the massive circulation of the Delta variant. In addition to affecting the lives of tens of millions of people, the strict security measures in force in the country are having serious repercussions – also in Europe – on the export of clothing, footwear and the coffee trade. The big textile brands have important factories in Vietnam, the consequence could be an increase in prices charged to consumers.
WESTERN PRODUCTION
Business Insider reports that Nike, Gap, Urban Outfitters and other retailers are warning that the blockades in Vietnam are wreaking havoc in supply chains. The country is a major producer for many American apparel brands, and as the virus continues to spread, companies are struggling to replenish inventory to keep up with growing demand now that the US is out of the box. lockdown. “I would say our biggest concern right now is having the catalog of garments available,” said Richard Hayne, CEO of Urban Outfitters in an earnings conference call on Tuesday. “We don’t know when it will arrive, or how much it will cost. I am sure that other companies are in the same situation in areas where the country is completely closed ». Some of the biggest brands in the United States make most of their garments in Vietnam, according to Bank of America data. “Gap and Lululemon Athletica have about a third of their production here,” analysts report. While a report by Axios, reported by “Business Insider”, indicates that “Nike buys 51% of its footwear and 30% of its clothing in Vietnam”. Due to travel restrictions, manufacturers are struggling to transport goods to the port of Ho Chi Minh in the south of the country, triggering a long chain of delays and setbacks made even more complicated by the shortage of containers and the increase in costs for the export of goods, also these consequences of the pandemic.
FEW VACCINATES
Vaccines are lacking in the Southeast Asian country and the Delta mutation is more easily infiltrated. As of August 30, there were 14,219 new cases, the second highest daily increase since the start of the pandemic. The total number of infections in Vietnam has risen to 445,292, compared to less than 1,500 infections throughout 2020. Although six coronavirus vaccines have been authorized – those from AstraZeneca, Sinopharm, Pfizer – BioNTech, Moderna and Johnson & Johnson, in addition to Sputnik V – only 2.6% of the population, or about 2.5 million people, has completed the course of prophylaxis. The restrictions were introduced in Ho Chi Minh City, the heart of the outbreak, in June and were tightened further in August. Exporters told Bloomberg that transporting goods is a business, given the travel blocks imposed by the lockdown, and that the problem is exacerbated by skyrocketing costs.
FACTORIES CLOSED
As reported by “Loadstar”, the Vietnam Textile & Apparel association reported the closure of about 30% -50% of textile factories, which prompted customers to turn to competitors from other states. Exactly the same phenomenon that occurred, to the advantage of Vietnamese factories, last year with the closure of many activities in China in the early stages of the health emergency. Other companies in Vietnam would have slowed down due to a lack of supplies caused by port congestion and delays in customs controls. A logistics operator told the British newspaper about the bureaucratic complications and the lack of a coordinated approach by the Vietnamese authorities in managing the lockdown, with the need to submit the request for transit authorization for road hauliers to various ministries. The Delta variant outbreak has reduced millions of people now in isolation to misery and disrupted supply chains in the country, which is also the world’s second largest producer and exporter of coffee after Brazil. More than 20% of the coffee imported into the European Union in 2019 came from Vietnam. Now the rigid lockdown in force both in Ho Chi Minh, the most populous city with 13 million inhabitants and home to the main commercial port of the country, and in various areas of the central plains – nicknamed “the kingdom of coffee” for their approximately 570 thousand hectares of crops – is putting an entire sector in serious difficulty.
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