One in three Vietnamese textile factories are closed

According to the Vietnam Textile and Apparel Association (VITAS), about a third of Vietnam’s textile and clothing factories have closed due to the coronavirus pandemic. As good as all logistic chains are interrupted in the world’s second-largest textile exporter, in a crisis that could cost the industry billions.

Vaccination roll-out is slow

VITAS Chairman Vu Duc Giang says some of the affected factories – small and medium-sized enterprises, in particular – will remain shut for a long time. “Businesses do not have enough funds to pay for three-on-site working arrangements to support employees to return to work”, he told VNA. Moreover, vaccination coverage within Vietnam’s textile and garment industry is still relatively low, especially in key manufacturing areas located in the southwest and southeastern provinces.

According to data from VITAS, up to 90 % of supply chains in the industry are currently disrupted. The export value of the textile and clothing industry would drop by about a fifth, from 39 billion dollars to 32 to 33 billion “in the most optimistic scenario”. Giang also warned that delayed deliveries could lead to customers cancelling orders, which in turn could affect the entire industry in the longer term too.

Therefore, VITAS and three other industry associations have urged the Prime Minister to speed up vaccinations or financially support exporting companies to purchase vaccines for their employees.

Number 2 worldwide

Since last year, Vietnam has been the world’s second-largest clothing exporter after China. In total, the country exported over 24 billion euros worth of clothing and textiles. This year, that figure will barely rise (if at all) due to the consequences of the pandemic.

Several Western companies have already indicated that they face supply issues due to the fourth wave of the coronavirus pandemic. Only last month, Nike said that two of its main Vietnamese suppliers had temporarily closed their doors.