Manufacturing companies in Vietnam must reassess where they are locating during the holiday season, as the country faces increasingly stringent regulations. COVID restrictions.
Vietnam was hard hit by the pandemic, and, with an increase in the number of infected and a less than good vaccination rate, the manufacturing industry has taken a hit.
“This is a really bad time for Vietnam,†Ankiti Bose, co-founder and CEO of Zilingo, a major brand fashion supplier, told CNBC. “The holiday season expeditions need to happen right away. ”
Bose told CNBC that his clients had started to change direction on where to conduct manufacturing in places such as India, Bangladesh, Sri Lanka and Indonesia.
“Bangladesh and India suffered major lockdowns,†Bose said, “but almost everything was back to normal in terms of production within a few weeksâ€.
Zilingo is not too affected by the problems in Vietnam, since less than 10% of its suppliers manufacture there; However, Bose told CNBC that the country is an important region due to specialized equipment that can be difficult to find in other regions.
“Vietnam specializes in synthetic fibers and China is the quick alternative for many brands,†Bose said. “We make it easy for most buyers very quickly through our digital channels. “
Shoes and clothes Manufacturers have particularly suffered, as a number of these companies have had to close their factories in the south of the country, including in Ho Chi Minh City, according to CNBC.
Nike had shares downgraded by BTIG last week, the stock broker citing production issues as the reason. These problems should be an important part quarterly reports from Nike due out after the market closes on September 23.
Data suggests that the economic situation in Vietnam will only get worse, according to CNBC, which reports that purchases of manufactured goods, customs exports and industrial production all fell significantly last month.
