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Nikkei Asia: Viet Nam leads rapid recovery in Southeast Asian supply chains

VGP – Viet Nam in particular is seeing a rapid return to normality as the country has eased restrictions. About 200 factories in the country contracted to make sportswear for Nike have resumed operations, according to a recent article on Nikkei Asia.

November 11, 2021 3:52 PM GMT+7

An industrial park in Ho Chi Minh City that houses plants operated by Samsung Electronics and Intel will "provide assistance so that both companies' facilities will return to full production this month," said a park executive.

Companies that produce electrical and electronic components essential for the auto industry are also returning to full strength, much to the relief of manufacturers around the globe, stated Nikkei Asia.

Japan's Furukawa Electric expects to return to full capacity at its Vietnamese plants. Its three factories there make wire harnesses for automobiles, with the Ho Chi Minh City site alone staffed with about 8,000 workers. Since October, utilization rate at all three factories has been steadily recovering.

The factory floors "have returned to a position where they can respond to requests from a client," said Furukawa Electric President Keiichi Kobayashi.

Viet Nam was the source of about 40 percent of Japan's wire harness imports last year, and domestic suppliers Yazaki and Sumitomo Electric Industries are restoring production at their Vietnamese plants as well. This trend is expected to support a production comeback in Japan's auto sector.

According to the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA), nearly 96 percent of enterprises at 17 processing and industrial zones in Ho Chi Minh City have resumed operations after over one month after social distancing measures were lifted.

More than 230,500 workers, or 80 percent of the total number, have returned to work. Notably, the rate hit 95-100 percent at some factories.

Meanwhile, the General Statistics Office announced that a total of 4,304 companies resumed their operations in October, up 29.8 percent against September.

In October only, Viet Nam saw 8,233 new enterprises established, with a total registered capital of VND108.6 trillion (US$4.77 billion), representing increases of 111.2 percent in the number of enterprises and 73.9 percent in capital against the previous month.

By Thuy Dung