Changshin Vietnam, a South Korean shoemaker, grew to become the second main Nike provider to droop manufacturing in Vietnam because it shut three of its factories close to HCMC on Thursday as a consequence of a coronavirus outbreak.
The factories in Dong Nai province, which make use of practically 42,000 staff, will stay shut till July 20, the Vietnamese authorities stated in an announcement, including lots of the 177 infection circumstances detected within the province had been from the factories.
Nike didn’t reply to Reuter’s request for remark outdoors U.S. enterprise hours, whereas calls to Changshin went unanswered.
On Wednesday, Taiwan’s Pou Chen Corp, which makes footwear for Nike and Adidas, suspended operations at its plant in Ho Chi Minh Metropolis. The plant will probably be closed till July 23 for “well-being and security issues”, the corporate stated, including it didn’t anticipate a significant monetary impression.
Vietnam had till lately efficiently contained coronavirus outbreaks, with restricted disruption to its essential manufacturing sector. Nonetheless, since late April, it has seen document circumstances on many days this month, most of these within the industrial hub Ho Chi Minh Metropolis and its neighboring industrial provinces of Dong Nai and Binh Duong.
The nation has recorded 38,200 infections and 138 deaths in general, an overwhelming majority of these since Might.
Nearly all of Nike’s footwear is manufactured outdoors in the US. The corporate has stated contract factories in Vietnam produced about 50 p.c of complete Nike model footwear in fiscal 2020, however, didn’t specify the volumes that got here from Changshin or Pou Chen.
The most recent resurgence in virus circumstances might sign one other hiccup for the world’s largest sportswear chain in 2021 after container shortages and U.S. port congestion held up Nike’s stock earlier within the yr.
“Having the factories shut for one or two weeks for Nike goes to trigger an enormous drawback for its provide chain,” China Market Analysis Group analyst Shaun Reinstated, including the shutdown would result in value hikes.
Nike additionally noticed its China gross sales take a success after calls to boycott international manufacturers for his or her feedback round pressured labor in Xinjiang.
Eclat Textile Co, a Taiwan-based garment and cloth provider, has suspended manufacturing at its Dong Nai plant till July 17, it instructed the Taipei inventory change.