Manufacturers feel the heat through erratic power cuts

Machinery is at risk of malfunction if unpredictable power cuts continue Photo: Le Toan

The Korean Chamber of Commerce in Vietnam (KoCham), the representative of over 10,000 Korean-invested enterprises generating more than one million jobs in Vietnam, on June 5 sent a document to the prime minister, the Government Office, and Electricity of Vietnam to report the impact of the interruption on its business community.

The chamber has received feedback on the unannounced power interruptions, which had forced firms to suspend operations and miss deadlines for orders, while impacting the working time of their employees.

Chairman Hong Sun said that the operation in factories was consecutively halted due to the unstable power supply. In many cities and provinces, power cuts have gone on for over three days a week, cutting capacity by half at many factories.

“South Korean enterprises suffer dual damage. When having power interruptions without prior notice, the workers still go to the factories and sit idle. Meanwhile, the manufacturing lines have to suspend operations and the companies still must pay salaries,” Sun said.

“Sudden power cuts also make machinery break down and the quality of products and goods are impacted,” he added. “In addition, suspending operations will affect the completion of orders, and even delay exports. Thereby, in the case of compulsory blackouts, firms expect authorities to give specific notice and be proactive in having their workers off production plans, saving production costs.”

According to KoCham, although there are no specific statistics about the damage to South Korean groups due to power interruption, they are sure it causes serious damage to the business community.

Pham Van Tuan, general director of An Phat Holdings, an environmentally friendly plastic group in Vietnam, is worried about the rotational power cut at its factory.

Tuan said that the capacity of the factory is 300 tonnes per day, however, at present, the unstable power has suspended operation. Employees have to work on their day-off to offset the diminished capacity. The company also has to negotiate with partners to offset the remaining goods in the following months.

“Our partners also have foreign-invested enterprises, thus ensuring the deadline for order delivery is a crucial requirement to ensure the prestige of the company,” Tuan said.

In Hanoi and the northern provinces, power outages can last anywhere from half to an entire day. In areas where electricity is heavily needed for production, electricity is prioritised for production during the day and only provided to residents at night.

According to the Ministry of Industry and Trade (MoIT), the total accessible capacity of the northern power system (including imported electricity) that can be mobilised to satisfy electricity demand is around 17,500-17,900MW, approximately 60 per cent of the installed capacity.

During the upcoming heatwave, the demand in the north may reach 24,000MW and the northern grid will fall short by approximately 4,350MW. The MoIT warns that the shortfall of power will have a significant impact on the power supply, not solely in the north but on a national scale, until July.

The European Chamber of Commerce in Vietnam (EuroCham) and the broader business community have expressed growing concerns regarding the ongoing power shortages in Hanoi and northern Vietnam. Many European companies with production and manufacturing facilities in the region, including numerous EuroCham members, have been adversely affected. Swift action is imperative to preserve Vietnam’s reputation as a dependable global supplier, the chamber said.

EuroCham has intensified its advocacy efforts by writing a letter to the MoIT to propose a series of short- and long-term measures designed to alleviate the effects of the ongoing power outages.

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