Nike and Adidas face supply-chain disruption after Vietnam factory closure

Taiwan’s Pou Chen, which makes footwear for companies such as Nike and Adidas, suspended operations at its plant in Ho Chi Minh City on Wednesday as COVID-19 curbs hit factories in the country’s business hub.

Vietnam’s health ministry said in a statement that production at Pou Chen’s Pouyuen Vietnam factory would be suspended for 10 days.

State media said 49 infections had been detected at the plant in Ho Chi Minh City, which is at the epicenter of the country’s worst coronavirus outbreak.

The company did not immediately respond to an email seeking comment.

Shares in Pou Chen, the world’s largest manufacturer of branded athletic and casual footwear, closed down 1.3% on Wednesday.

After successfully containing the disease for much of the pandemic, Vietnam has faced a more stubborn outbreak since late April.

Record infections and strict curbs on movement have left plants operating below capacity in northern provinces where suppliers for Apple, Samsung Electronics and other global tech firms are located, sources have said.

Pouyuen Vietnam, the largest employer in the city with 56,000 workers, was unable to arrange for its workers to sleep at the site as required by authorities to allow the business to remain open, the health ministry said on Wednesday.

Last year, Pouyuen Vietnam was ordered to suspend its production for two days after failing to meet local social distancing rules.

Earlier this week, state media said authorities also ordered 29 companies in the Tan Thuan Export Processing Zone, an industrial park, to suspend production due to the outbreak.

In the neighboring Saigon Hi-Tech Park, which houses international companies, more than 700 infections were detected in recent days and authorities ordered companies to shut units with infected workers, state media reported.

Despite the latest outbreak, Vietnam has recorded far lower caseloads than many other countries with 36,605 infections in total and 130 deaths.