Changshin Vietnam, a South Korean shoemaker, became the second major Nike supplier to halt production in Vietnam on Thursday, closing three of its plants in Ho Chi Minh City due to a coronavirus epidemic. The companies in Dong Nai province, which employ almost 42,000 people, would stay closed until July 20, the Vietnamese government said in a statement, adding that the firms were responsible for many of the 177 infection cases discovered in the region.
Outside of U.S. business hours, Nike did not reply to Reuters’ request for comment, and calls to Changshin went unanswered.
Pou Chen Corp, a Taiwanese company that manufactures footwear for Nike and Adidas, halted operations at its facility in Ho Chi Minh City on Wednesday. The factory will be shuttered until July 23 for “health and safety reasons,” according to the firm, which added that it does not foresee a significant financial effect.
Since late April, Vietnam has experienced a surge in coronavirus infections. Overall, the country has registered 38,200 illnesses and 138 fatalities, with the vast majority of them occurring since May. Nike manufactures almost all of their footwear outside of the United States. According to the business, contract manufacturers in Vietnam produced about half of total Nike brand footwear in fiscal 2020.
According to a source, Nike has halted production at its Dong Nai factory in Taiwan until July 17. According to analysts, the decision would result in price increases for the company’s suppliers and a decrease in sales in China. Nike’s China sales have also suffered as a result of boycott demands in response to statements about forced labour in Xinjiang made by global companies.
