Home Nike store Adidas and Nike face COVID supply chain issues

Adidas and Nike face COVID supply chain issues

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The rise of the COVID-19 variant Delta has closed factories in Vietnam, which the Financial Times (FT) says has taken a toll on global brands.

The country was doing fairly well with handling COVID in 2020. Vietnam had successfully brought the spread of the virus under control. Its economy had grown and obtained new foreign investments.

But cases have now reached record levels; FT writes that they have trended between 7,000 and 8,000 per day. The country has recorded nearly 200,000 cases since early July. Hardest hit has been Ho Chi Minh, the largest city, which has since put in place rules regarding the transportation and accommodation of workers and the way staff are deployed in factories.

Taiwanese shoe supplier Pou Chen, which makes shoes for Adidas and Nike, was among the companies to halt production due to the new surge. Production stopped at the Ho Chi Minh plant on July 14, and executives said it would remain so until at least August 9, and the company’s other Vietnamese factories were downsized.

And Feng Tay, which is another Taiwanese sports shoe manufacturer, shut down many factories last month.

The Vietnamese Textile and Clothing Association said more than 30 percent of the country’s garment and textile facilities have been closed. Reports say vaccination rates among workers in the industry were “still very low”.

The vaccination program in Vietnam has been described by FT as a “stutter” and the government has been slow to obtain vaccines overall. FT writes that only about 1% of the country’s population has been fully immunized.

Earlier this year, PYMNTS wrote about how new outbreaks of COVID were threatening the production system. There has been an outbreak in the Chinese city of Shenzhen in one of the busiest ports in the world, and there have been outbreaks of COVID in Taiwan and Malaysia as well. This came in early June just after China and the United States recorded their largest annual increases in factory and consumer prices.

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