Manufacturers clamber for continuity

Nidec Sankyo Vietnam, source: yp.vn

As over 230 workers have tested positive for the coronavirus, Nidec Sankyo Vietnam had to temporarily halt production in Saigon High-tech Park (SHTP) in Thu Duc city. Meanwhile, the company has turned part of its facility into an on-site quarantine zone for nearly 3,500 workers.

Nidec Sankyo Vietnam is among four subsidiaries of Nidec Group in SHTP. Likewise, its sister company Nidec Vietnam is scrambling to maintain operations.

Luu Kim Hong, chairman of the trade union at Nidec Vietnam, told VIR that the company has more than 6,000 workers, with one-third of them living in Thu Duc city’s ward next to the SHTP, which was recently locked down.

Nidec Vietnam has relied on the rest of its workers to fulfil the large amount of orders and has requested workers to do overtime to hit targets. It is also looking at recruiting more workers but such a thing is scarce during the pandemic.

Even more worrying, if infected cases are detected at the factory, Hong is afraid about the lack of on-site quarantine facilities. Because the factory site has only enough space for production, it is not possible to arrange quarantine area for thousands of workers as per the city’s request.

“Workers will not agree to stay at the factory site because of the living conditions. Indeed, we have prepared space in case of quarantine, but it is not eligible for such a large number of people to stay for a long time. We even rent hotels for workers to stay and pay all the fees for that, but very few people accept the solution due to high risks of infection,” he shared.

The SHTP is home to 85 businesses employing 4,500 employees, including 500 experts. There are three companies with 5,000 employees and 10 companies with 1000 employees. Some big investors in the SHTP include Intel, Samsung, Sanofi, Schneider, Jabil, and others.

As a subsidiary of Nikkiso Group, Nikkiso Vietnam has also felt the pain from the latest wave of coronavirus. Nikkiso Vietnam has its production base in Tan Thuan Industrial Zone in District 7, specialising in manufacturing high-quality medical products, including blood tubes for dialysis treatments.

Cao Tan Dung, general affairs manager of Nikkiso Co., Ltd., told VIR that the situation is getting worse with more and more workers infected in Tan Thuan Industrial Zone. At present the company is striving to tighten the anti-pandemic measures at the factory.

“There is an infected case in my factory as well so we had to put off the production a few days ago. A stay-at-work model seems a good idea now, because of the limited space in the factory,” he said.

Factories in industrial zones, export processing zones, and high-tech zones are suffering from pandemic spread among workers. Furthermore, since workers usually live together in an area, forced isolation numbers can be huge.

With no clear end in sight to Ho Chi Minh City’s pandemic woes, authorities and enterprises are sparing no time in preventing the spread and minimising losses.

In the meeting of the COVID-19 pandemic prevention and control team in the city, Hua Quoc Hung, director of Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA), claimed there were around 800 infected cases in 38 enterprises in such zones as of early last week. Among them, there were four enterprises with 100 or more cases.

For businesses with a large number of infections but currently lacking isolation spaces for F1 and F2 cases, there will be a possibility of cross-contamination. Authorities have asked state-owned enterprises to temporarily use their properties, offices, or factories as quarantine zones or screening test points. Around 38 enterprises have registered to arrange accommodation for their workers to stay at work.

The current outbreak had exerted a severe impact on Vietnam’s manufacturing sector. Containment measures and temporary business closures contributed to the sharpest falls in output and new orders since the first outbreak of the pandemic last year, while also exacerbating supply chain issues and making it more difficult to export products.

Jola Pasku, senior economist at American-British information provider IHS Markit, told VIR that Ho Chi Minh City accounts for approximately 22 per cent of Vietnam’s economic output, so any disruptions of economic activities there will likely have negative spillovers on economic indicators on a macro level.

“Depending on the scope of the current outbreak and the extent of the disruptions in industrial parks, we will likely witness a more pronounced slowdown in export-oriented manufacturing activities and GDP in the third quarter of the year,” she said.