The Strategist

Nike and Adidas halt sneakers production due to pandemic

07/16/2021 - 03:38

Taiwanese manufacturer Pou Chen, which makes sneakers for Nike and Adidas, has suspended operations at a factory in Ho Chi Minh city, Vietnam. According to Reuters, the reason was an outbreak of COVID-19 in the country's industrial centr

The Vietnamese unit of Pou Chen, the largest employer in the city with 56,000 employees, was unable to provide overnight accommodation for employees at the site. So, when 49 cases of coronavirus were confirmed there, the Vietnamese Ministry of Health ordered the company to shut down operations for 10 days. 

The closure of the factory, in turn, affected the share price of the largest manufacturer of branded sports and casual shoes. At the close of trading, Pou Chen's securities were 1.3 per cent cheaper at NT$37.15 (US$1.33).

After successfully containing the spread of the virus at the beginning of the pandemic, since late April 2021, Vietnam has stopped coping and allowed the disease to spike. Record cases of infection and strict travel restrictions have left factories in the northern provinces - among them suppliers to Apple, Samsung and other global technology companies - unable to operate at full capacity.

Despite the current situation, there have been far fewer cases of coronavirus in Vietnam than in many other countries - some 36 000 cases and 130 deaths.