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What Happened To The Shoes Factories In Vietnam And The Shoes Industry?

——400 factories close every day! Nike is in short supply!

 

【Foreword】

The data shows: In the first half of 2021, more than 70,000 companies,  including many shoe factories in Vietnam closed down, a year-on-year increase of nearly 25%. On average, about 400 companies collapsed every day.

Recently, according to news reports:

According to the statistics from the Ministry of Health of Vietnam, among the 157,000 people who returned to their hometown in Vietnam from October 1 to 8, more than 1,000 people tested positive. The Vietnamese government predicts that the number of returnees may exceed 2 million.

Hundreds of employees fled because only one person was diagnosed

The shadow of the epidemic looms over the production line

The fear of the new crown has always been with the workers on the front line of production. In July this year, hundreds of employees forcibly fled from a factory in Binh Duong Province, Vietnam, only because an employee was diagnosed with the new crown that day.

In the past three months, Vietnam has added nearly 770,000 new confirmed cases, of which 19,000 have died from the new crown. The deaths are basically concentrated in Ho Chi Minh City, where the manufacturing industry, especially shoe factories, is developed.

The government had no choice but to unblock the workers, and the workers took the opportunity to flee.

Since many international companies have set up production lines in Vietnam, a large number of multinational companies that have stopped production, such as many shoe factories, due to the epidemic have suffered heavy losses in the past few months. Under pressure from all parties, the Vietnamese government chose to unblock it with illness, but it backfired, and the workers who worked in the shoe factory took the chance to flee the city.

On October 3, a manufacturing company in Binh Duong Province, Vietnam responded to the call to resume work and production, but the employee attendance rate was less than 20%.

One-third of textile workers leave their jobs, and production is difficult to recover.

On October 6, the global shoe giant Baocheng Group announced the resumption of production, but the number of workers on the job did not exceed 30%, and more than 40,000 workers had not yet returned to the shoe factory.

Despite the adoption of salary increases and persuasion plans, the willingness of employees to return to work is still not high. According to statistics,  about 3 million workers in the textile and garment industry in Vietnam, and about 1 million are currently on leave or vacation.

Data show that from July to September 2021, the country’s gross domestic product (GDP) shrank by 6.17% year-on-year, the most significant quarterly decline in the country in 35 years. Statistics show that in the first half of 2021, more than 70,000 companies in Vietnam closed down, a year-on-year increase of nearly 25%, and an average of about 400 companies went down every day.

Vietnam stops production, hundreds of millions of pairs of Nike shoes cannot be delivered.

Vietnam is a substantial production base of Nike, and 51% of its footwear products are processed in Vietnam. You know there are many Nike shoe Manufacturers here.

Due to strict local epidemic prevention measures, the Nike shoe factory in Vietnam was basically closed from July to September. It is estimated that the current product inventory of Nike in the United States is the lowest in 30 years and can only maintain sales for about one month.

According to a senior analyst at BTIG in the United States, Nike currently has about 116 million pairs of shoes that cannot be produced. In the entire European and American regions, they are facing the embarrassment of Halloween “no ghosts to dress up” because related products are challenging to produce in Vietnam shoe factories.

Data Display:

Products made in Vietnam account for about one-third of American footwear products and one-fifth of American apparel products.

In mid-August, more than 80 footwear companies such as Nike and GAP wrote to US President Biden, stating that “the soundness of Vietnam’s footwear and clothing industry directly affects the soundness of the American industry.”

The end:

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