Adidas, Nike Among Brands Hit With Supply Chain Issues Amid Vietnam COVID Rise

The rise of the COVID-19 Delta variant has shuttered factories in Vietnam, which Financial Times (FT) writes has had adverse effects for global brands.

The country had been doing fairly well with handling COVID in 2020. Vietnam had managed to tame the spread of the virus. Its economy had grown and gotten new foreign investments.

But the cases have now hit record highs; FT writes that they’ve been trending between 7,000 and 8,000 per day. The country has recorded almost 200,000 cases since the beginning of July. The hardest-hit has been Ho Chi Minh, the largest city, which has since implemented rules about worker transport and housing and the way staff is deployed on factory floors.

Taiwanese footwear supplier Pou Chen, which makes shoes for Adidas and Nike, was among the companies to suspend production because of the new surge. Production stopped at the Ho Chi Minh facility as of July 14, and leaders said it would stay that way at least until Aug. 9, and the company’s other Vietnamese plants was scaled back.

And Feng Tay, which is another Taiwanese sports footwear maker, closed numerous factories last month.

The Vietname Textile and Apparel Association said over 30 percent of the country’s garment and textile facilities had been closed. Reports say vaccination rates among workers in the industry was “still very low.”

The Vietnam vaccination program was described by FT as “stuttering” and the government has been slow to get vaccines overall. FT writes that only around 1 percent of the country’s population has been fully vaccinated.

Earlier in the year, PYMNTS wrote about the way the new COVID outbreaks were threatening the production system. There was an outbreak in the Chinese city of Shenzhen at one of the world’s busiest ports, and there were COVID outbreaks in Taiwan and Malaysia as well. That came in early June just after both China and the U.S. had recorded their largest annual jumps in factory-gate and consumer prices.