Suspension of operations at four industrial zones in the northern province of Bac Giang is causing export chain breakdowns and impacts on general operations of the business community in the province.
|Photo: Duc Thanh |
The four industrial zones (IZs) of Dinh Tram, Quang Chau, Van Trung, and Song Khe-Noi Hoang are home to over 300 foreign-invested enterprises (FIEs) with some 163,000 workers, but these manufacturing hubs of large-scale FIEs in such as Luxshare, Foxconn, Hosiden Vietnam, and SI Flex are undergoing some serious restrictions.
Apple’s largest supplier Foxconn was preparing for interruption of facilities in Bac Giang which will impact the overall operation of the group in Vietnam, with Luxshare also expected to face disruption.
Foxconn has three factories in Bac Giang – Fuhong Precision Component Co., Ltd., New Wing Interconnect Technology Co., Ltd., and FuGiang Co., Ltd. At present, the operation of the former has yet to be impacted by the pandemic, but the remaining facilities are larger in scale and thus interruption is expected.
Foxconn general director Harry Zhuo said that the group has invested $900 million in Bac Giang, creating jobs for 35,000 people.
Along with operational impacts, the pandemic may impede the construction process of another member of Foxconn, Fukang Technology. Located in Quang Chau IZ, the project has the total investment capital of $260 million with design capacity of eight million laptops and tablets. The facility was expected to start operations in the third quarter this year.
Another company suffering damage from the pandemic is Hosiden Vietnam. Having 6,000 employees with numerous F1 and F2 coronavirus cases already, it is on alert and implementing pandemic prevention measures in an attempt to fight off increasing numbers of positive cases.
Last year despite the impact of the pandemic, Bac Giang still reported the import-export turnover of $21.8 billion, up 50.9 per cent on-year. The export turnover was $11.2 billion, with $3.1 billion coming from electronic products, $2.95 billion from telephone equipment, and $2.26 billion from power and solar panel products.
Bac Giang is the manufacturing hub of almost all of Apple’s partners, including Goertek, thus interruption will inevitably impact operation and export activities, with the exact damage likely to depend on the duration of restrictions.
Nguyen Xuan Ngoc, deputy director of Bac Giang Industrial Zones Management Authority, told VIR, “Since the pandemic outbreak, manufacturers have been impacted because a large volume of employees were isolated due to being related to COVID-19 patients. They also faced difficulties in recruiting a temporary labour force to offset for isolated employees. We estimate that 40 per cent of the labour force working in IZs in Bac Giang have to had to suspend their job so far, and as a result manufacturers are suffering serious damage.”
At an online meeting with Bac Giang People’s Committee and the management authority, almost all representatives of the 25 leading companies expressed concerns over the possible damage. “However, the interruption in operations is compulsory in order to place priority on preventing the expansion of the pandemic,” Ngoc explained. “The management authority is building plans to help manufacturers recover their operations as soon as possible.”