Nike and Adidas maintain supply chain operations in Vietnam

November 17, 2021 | 13:23
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Rumours that Nike and Adidas would move production out of Vietnam in August and September were rebutted by the Vietnam Textile and Apparel Association (VITAS) as the brands do not own any plants in the country.
Nike and Adidas maintain supply chain operations in Vietnam
Nike and Adidas are not actually moving production out of Vietnam

Vu Duc Giang, chairman of the VITAS, confirmed that Nike and Adidas does not invest in factory facilities in Vietnam. Thus, there is no way that the two brands would relocate factories out of Vietnam. Instead, they may move some orders to other foreign partners when Vietnamese suppliers fail to deliver orders on time during the fourth wave of the pandemic. However, moving the orders is not easy for brands.

“As of October, Nike has yet to move any orders for Viet Tien Garment Corporation because the brand could not choose an alternative partner that could meet the requirements related to time, quality, and evaluation system like their Vietnamese partner," Giang added.

During the recent social distancing period, Vietnamese textile and garment enterprises could not meet delivery schedules. Thus, a number of orders (estimated at about 13-14 per cent) that needed to be delivered in November and December have been moved to other points of production.

However, there have been signs of orders returning for 2022 since the government issued Resolution No.128/NQ-CP promoting provisional regulations on safe, flexible adaptation to and effective control of COVID-19.

"Brands have more confidence when Vietnam reopens the economy. Therefore, based on global consumption trends, Vietnam's textile and garment sector targets to export about $43.5 billion in 2022," the VITAS chairman stated.

Since the reopening in October, textile and garment enterprises are speeding up production. The enterprises have been actively recruiting workers to promptly meet export orders.

Some enterprises such as Thanh Cong Textile and Garment Trading Investment, Century Yarn, and TNG posted better results than the previous months.

In the first 10 months of 2021, Vietnam's textile and garment industry recorded an export turnover of $32 billion, up 10.8 per cent over the same period last year. It is estimated that the total export turnover will reach $37.92 billion this year, up 8.1 per cent on-year.

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