Korean companies in Vietnam struggle with Ho Chi Minh City lockdown

Industry

Published: 29 Aug. 2021, 18:00

Korean companies in Vietnam struggle with Ho Chi Minh City lockdown

An empty intersection in Ho Chi Minh City, Vietnam, on Monday. Stricter lockdown measures were applied to Ho Chi Minh City as Covid-19 case numbers remained high. [AP/YONHAP]

Vietnam is enforcing strict Covid-19 lockdown in Ho Chi Minh City, and Korean companies in the country are being affected.

“We’re basically done with business for the fall winter season,” said a 60 year old who owns a sportswear brand in Korea and Vietnam. “We should’ve finished delivering the fall clothes by now, but we weren't even able to get started.”

Tightened lockdown restrictions were implemented in Ho Chi Minh City starting Aug. 23 as Covid-19 case totals remained stubbornly high. Residents are prohibited from leaving their homes, even for food, until Sept. 15.

The three employees working for the sportswear brand’s Vietnamese division haven’t been able to leave their apartments or go to work.

“I did a rough calculation, and the damages total some 5 billion won [$4.3 million]," said the business owner. "We’re concerned that we might not be able to make winter clothes, but nothing can be done.”

Samsung Electronics' home appliance manufacturing factory in Ho Chi Minh City, Vietnam. [SAMSUNG ELECTRONICS]

The business owner added that he is worried whether the company can continue to employee the 40 people working in Korea with business almost impossible for fall and winter, saying he wishes the Korean government would step in to convince the Vietnamese government to ease restrictions.

About 10,000 Korean businesses operate in Vietnam, with many located in Ho Chi Minh City.

Big businesses are also feeling the pain, with the lockdown taking a toll on factory operations.

Samsung Electronics has a home appliance factory at the Saigon Hi-Tech Park, Ho Chi Minh City, employing about 7,000 people. It is operating with a reduced number of workers, at 30 percent of its total production capacity.

“The operation rate fell due to the lock down, but this doesn't mean that we’re suspending production,” said an official for Samsung Electronics. “Minimal logistics services will continue to operate at the Ho Chi Minh City factory."

The LG Electronics factory located in Haiphong — an industrial city located north of Vietnam — was saved from facing strict lockdown measures, but the company said they are keeping a close eye on the situation.

"We're far from the southern part of the country, and there are no problems with operating our factories," said a spokesperson for LG Electronics. "We aren't seeing any problems at other factories in Southeast Asian countries, but we're closely watching the spread of Covid-19 cases."

BY KANG KI-HEON [lee.taehee2@joongang.co.kr]