Vietnam’s manufacturers are part of a global crisis that is causing inflation to skyrocket and creating fears about the pace of recovery.
From shoes and sweaters to car components and coffee, Vietnam’s rigorous and lengthy coronavirus ban has resulted in product shortages among global companies such as Nike and Gap, which have become increasingly reliant on the Southeast Asian country’s manufacturers.
The snarl-ups in Vietnam’s factories are part of a bigger worldwide issue that is sending inflation soaring and creating fears about the global economy’s pace of recovery.
Vietnamese textile mill’s output plunged by 50 percent when Vietnam’s latest devastating virus wave first struck in spring. The factory is a key cog in the supply chain of several European and US clothing giants. Its fabric is later used in swimwear and sportswear for customers including Nike, Adidas and Gap. “We only survive if we have the stock,” says factory director Claudia Anselmi.
The virus, known as Covid-19, has forced tens of thousands of people to stay at home and disrupted supply chains in and out of the country. A complex web of checkpoints and confusing travel permit regulations have made life impossible for truck drivers and businesses trying to move goods across, as well as through, Vietnam. The virus has also hit coffee and car production, with Vietnam the world’s largest producer of robusta beans. Japan’s Fast retailing, which owns the popular Uniqlo brand, also blamed the situation in Vietnam for hold-ups on sweaters, hoodies and dresses.