Kinks remain as manufacturers resume operations

Kinks remain as manufacturers resume operations- Illustration photo

Life in Hanoi has since last week begun returning to its usual dynamism thanks to loosening social distancing rules, except in some high-risk districts and communes. On the first days of reopening, Dong Anh Footwear JSC called 300 employees on temporary leave back to work. After one month of reduced staff camping at work, workers can now commute from home every day.

“Our income and output have fully recovered, I am happy,” worker Dang Thu Ngan said. “Good morale has also improved performance significantly, with labour productivity at the factory rising 20 per cent over the stay-at-work model.”

Nguyen Thai Son, deputy director of Do Thanh Aluminium JSC said that the company had 129 workers camping on site during the past months. Do Thanh Aluminium and other manufacturers in Phu Thi Industrial Cluster requested Gia Lam People’s Committee to let workers living in safe areas commute to work and allow those in risky areas to stay at work. This has helped the businesses save costs and resume full operations easily.

Even before being recognised as a safe area, districts and communes have been supporting businesses. Stanley Vietnam in Gia Lam district has maintained production during social distancing.

Do Thanh Binh, head of Stanley Vietnam’s Administration Division said, “When the city conquers the coronavirus, the company’s capacity will receive another boost. We are looking forward to receiving assistance from the government because production costs have risen significantly. In addition to increasing input costs and materials, we pay VND150,000 ($6.50) for each worker a day and VND1 million ($44) in monthly allowance.”

While those in safe areas are enjoying the bounce back, those in risky areas are not barred from operating either if they can ensure safety for their employees. Hoang Van Tien, representative of ABB Power Grids Vietnam, said that the company’s safety force was established in May and performance has been quite good.

During social distancing, the company has been developed as a “safe area” according to the guidelines of Hoang Mai Trade Union. Sixty employees have been camping at work, all employees were tested each week, 95 per cent have received the first dose, and 5 per cent both. This allows the company to maintain operations without having to cut anyone’s salary.

The “safe corporate” model developed by the local labour authorities has been applied in nine companies. Thanks to companies like Do Thanh Aluminium, Megapharco, Stanley, and ABB keeping up production, the index of industrial production (IIP) of some industries in Hanoi increased 4.1 per cent on-year in the first nine months of this year, according to Hanoi Department of Statistics.

The IIP of the manufacturing and processing industry rose 3.9 per cent on-year, with that of many products also climbing, such as engine vehicles (16.8 per cent); clothing (14 per cent); beverage, paper, and paper-based products (11.1 per cent); wood and wooden products (9.1 per cent), and tobacco (8 per cent).

“The stay-at-work model has been successfully kept up production in businesses and factories. Besides this, a couple of thousand medium- and large-sized enterprises’ COVID-19 prevention plans have already been approved by the capital,” said Dau Ngoc Hung, director of Hanoi Department of Statistics.

While numerous enterprises can now operate well, some others were struggling on the first days of opening. For instance, textile producer Huyen Pham Co., Ltd. in Hai Ba Trung district is facing a lot of woes. “Some workers had quit during social distancing, and we have been exhausted by spending almost VND1 billion ($44,000) on rent, salary, and allowances over the last two months. We do not know how we can resume without money and workers,” said director Thu Huyen.

While Hanoi’s overall IIP in August was estimated to reduce by 8 per cent on-month, for the first eight months, it has increased by 6.3 per cent on-year. Seeing enterprises’ woes, Hanoi People’s Committee has announced several policies to support businesses by reducing fees and more.

Especially, Hanoi has delivered support packages for production and business loans such as restructuring loan payment terms, exempting and reducing loan interest, and reducing fees for clients hit by the health crisis.

Besides that, Hanoi Department of Industry and Trade has connected businesses and banks to apply for preferential credit and flexible interest rates.

At a recent online meeting with cities, provinces, and big corporations to remove difficulties for manufacturing enterprises in industrial and economic zones, Deputy Prime Minister Le Van Thanh stated that it is not necessary to shut down a whole factory if only one or two workers test positive for COVID-19. “It should be enough if only the production line linked to the cases is suspended,” he said. “Ministries and local authorities stand with the business community to restore production.”