The Textile And Garment Factories That Are Moving To Southeast Asia Are Not Very Good. Facing The Crisis Of "Chain Breaking", Factories Begin To Put "No Pay Leave".
According to media reports in February 20th: Although many factories in China have been gradually started, Vietnam and Mainland China will be able to recover in May.
Since the outbreak of the epidemic, many mainland Chinese managers have been unable to enter Vietnam after the breakup of Vietnam and China. Besides, raw materials from mainland China are also in short supply. Large factories warn that the manufacturing industry in Vietnam is facing a chain breaking crisis.
According to the latest survey by the Bank of China, 15% of employees indicated that the company had started to pay unpaid leave, 14.5% were missing, and 10% had shortened operating hours and reduced costs.
According to expert Xu Zunci, About 40% of raw materials or spare parts imported from Vietnam must be imported from China. This is especially true in the electronics and communications industry, so a dilemma now facing Vietnam is that factories will start to discover that the raw material or spare parts may break down.
Chinese managers are unable to enter
Vietnam's orders can't be full enough to produce at full speed.
Vietnam's factories are also affected by the spread of the epidemic.
At about 3 p.m. on February 1st, the Vietnamese government announced no plans to refuse entry to flights from Taiwan, China, and thousands of Taiwanese were heading back to Vietnam to host the new spring. Therefore, the Vietnamese government made a decision to reject all flights from mainland China before May 1st.
The three month embargo between Mainland China and Vietnam still caused many investors to have a headache. In the Nanyue region, such as Hu Zhiming, Pingyang and Nai, where production is the main production, many enterprises moved their production lines in China to Vietnam. The production management system is mainly based on mainland cadres, and many of the directors of the Taiwan production line are "Lu Gan".
A Taiwanese businessman who moved to Vietnam from China estimated that in the area of Hu Zhiming, there were as many as 50 thousand Chinese passport holders for Taiwanese businessmen. The total number of mainland cadres in Vietnam should be less than 100 thousand.
A management team from the Pearl River Delta relocated to Vietnam has more than and 100 mainland cadres. When the mainland came to Wuhan pneumonia before the Spring Festival, the Taiwanese businessman who had been through the SARS epidemic was alerted and asked mainland colleagues from important management posts to return to Vietnam in advance.
When Vietnam issued a ban on navigation in February 1st, it was the first time to arrange Lu Qian to fly with China, and to apply for land visas to Kampuchea and land to Vietnam. The mainland cadres were then isolated for 14 days, so that they could avoid the next day's land closure. Because these cadres are the focus of production management, in order to avoid affecting the quality of production, we have to reduce production capacity and shift to two shifts production during this period.
An electronics manufacturer listed on the stock market moved its capacity from China to Vietnam in Pingyang province last year due to the Sino US trade war and the risk of diversification. The newly built plant was completed, and many foreign orders had been finalized. Hundreds of mainland cadres also had good visas, which could be launched only after the start of the new spring. Now Vietnam has suddenly announced the suspension, and the mainland cadres have failed to make the production line planning chaos. The industry reluctantly said: "such temporary situation, the customer will also understand!"
A global brand lingerie factory located in North Vietnam coast defense employs 10000 employees and employs more than 100 dry land workers.
Wuhan pneumonia also brings the impact of logistics. A Taiwanese bank manager who has worked for many years in Vietnam has assessed that Vietnam's Taiwanese industrial chain is closely linked with the mainland and supports each other very much. Although some industries have a relatively complete supply chain in Vietnam, it is difficult for Vietnam to completely replace China in terms of price and output.
Most manufacturers maintain more than one month's inventory, and their impact depends on the time when the epidemic can be controlled.
I can't help it!
The global supply chain is looking forward to the resumption of Chinese factories.
If you don't work again, we'll have to shut down.
China's advantage lies in the fact that we are the only country in the world that owns the whole industrial chain. It has 39 industrial categories, 191 middle classes and 525 sub categories. It is the only country in the world that possesses all the industrial categories of the United Nations Industrial Classification, thus forming a complete industrial system.
Apart from quality and competitiveness, we can independently produce all industrial products from garments, shoes and socks to aerospace, from raw materials to industrial aircraft, and can meet the needs of people's livelihood, military, infrastructure and scientific research.
Like this epidemic, such a large-scale economic loss, the world only China can resist, other countries simply can not resist, can only be resigned to fate. That is to say, as long as China does not fall, the people of the whole world will be saved.
This is also true for the textile and garment industry. Look at the cases in the following countries to see how strong China is in the global supply chain.
Some garment factories in Kampuchea will be temporarily suspended.
The reason is lack of China's accessories.
Kampuchea's Ministry of labour said on Monday that at least four garment processing plants in Kampuchea could be suspended because the outbreak of new crown virus caused delays in the supply of raw materials imported from China. Labor Ministry spokesman Heng Sour said the supply of raw materials for clothing, yarn, buttons and soles is now delayed.
Heng Sour told Reuters that four factories have expressed concern to the government. The four factories employ about 3000 workers. Heng Sour did not disclose the names of these factories or their processed brands.
The clothing industry is the largest industry in Kampuchea, creating an annual revenue of 7 billion US dollars for the Kampuchea economy.
The Ministry of health in Kampuchea said in a statement that the only confirmed case of the new crown virus in the country was a Chinese citizen living in the coastal city of Sihanoukville, which was restored to health on Monday.
At the same time, Kampuchea's clothing industry is also facing the threat of EU's cancellation of trade preferences.
Kampuchea has benefited from the EU's trade plan for all goods except weapons, which aims to promote the economic development of developing countries in the world and allow Kampuchea to export most of its goods to the EU without paying tariffs. In 2017, the total value of Kampuchea's exports to the EU was 5 billion euros. In 2016, EU countries accounted for about 40% of Kampuchea's export market. Kampuchea's main export products are mainly clothing. About 700 thousand of the country's population is employed by garment enterprises.
In September 2018, the UN Human Rights Council investigation group issued a report accusing the Burmese army of genocide against ethnic Roh people. Therefore, the EU has considered the grounds for violating human rights seriously, considering the cancellation of preferential treatment granted to Kampuchea. The EU will make a final decision on Wednesday.
Adidas (Adidas), PUMA (Puma) and Levi Strauss (Levi's) and other international clothing and footwear brands have sent letters to Kampuchea leader Hong Sen (Hun Sen), claiming that the labour and human rights problems in the country may lead to the EU's lifting of trade preferences for the clothing industry.
People familiar with the matter said that the EU might not completely cancel all trade preferences, and is expected to maintain some support for the apparel industry to help protect factory workers' livelihoods.
According to media reports in February 6th:
As the shoe factories in China have not yet started, the footwear industry in India has also been hit.
Singh Singh, general manager of Woodland, a footwear manufacturer in India, said that 10% of her shoes and special footwear materials were from China and are now interrupted by the outbreak. If China's raw material exports continue to break, it may cause a 5% to 10% loss of business to woodland.
Singh pointed out that woodland is trying to transfer orders from China to other places, but it takes time.
India's auto industry has also been affected, and the supply of components has been disrupted. Rajeev Chaba, President of MG Motor India, India, said that China is on a long vacation. At present, the impact of supply disruption on business is not yet known, but if supplies continue to disrupt, it will have an impact on India's auto industry.
All the affected industries are looking forward to China's full resumption of work, which can ease the problem of supply disruption.
Factories that migrate to Southeast Asia will not be able to start work smoothly.
In addition to China, many factories that migrate to Vietnam, Kampuchea and other places are unable to start work smoothly. It is understood that a textile factory last year due to the Sino US trade war hot, in order to diversify the risk, the capacity to move from China to Vietnam, the factory has just completed, foreign orders have also been issued, the mainland's management cadres have also completed the visa, only wait until the start of the new spring can start, but the Vietnamese government announced before May 1st to reject all "flights from the mainland" decision, now, the mainland management. If the cadres fail, the production line will not be able to operate smoothly. "Now we hope that our customers will be considerate of us. The boss reluctantly replied.
In addition, the epidemic also brings the impact of logistics. Although the industrial chain of Vietnam is gradually improving, many raw materials are imported from China, and the links between them are very close. "Most of our factories have only 1 months or so of surface accessories. If the epidemic continues to be severe, the output of China's surface accessories is interrupted, and we may have to face a shutdown." A garment manufacturer said.
Apart from Vietnam, Kampuchea is also facing the shortage of raw materials and fabrics. In view of this, if China's epidemic continues to spread, even if customers transfer orders to Vietnam, Kampuchea and other places, orders will be full, and they will not be able to complete them smoothly.
afterword
This epidemic not only has a great impact on China, Southeast Asian countries, the United States, and even the whole world, but also proves that China is indispensable in the textile industry chain. At the very beginning of the new crown pneumonia virus in China, US Commerce Secretary Ross once said, "the spread of the epidemic is conducive to the manufacturing industry in the United States." But more and more facts have proved that Ross wants more if he wants to take advantage of the epidemic and get rid of China. But fortunately, the epidemic has been effectively controlled, many new cases have dropped significantly, enterprises have also resumed work in succession, I believe that we are not far away from the real victory of the virus.
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