"Trade Risks Worsen as Delta Descends on Southeast Asia Factories", 30 July 2021

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Factory shutdowns are accelerating in Vietnam, while Thailand is prepping for outbreaks among its manufacturers and the Philippines tightens restrictions in its economic heartland.

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The new closings in Vietnam follow recent decisions by local manufacturers for Nike Inc. and Adidas AG to suspend operations over virus restrictions. The country has been the second-largest supplier of apparel and footwear to the U.S. for many years, according to the American Apparel & Footwear Association, which represents more than 1,000 brands, including Gap Inc., J Crew Group Inc. and Levi Strauss and Co.

Meanwhile, Thailand’s 60,000 factories are preparing for the worst, with the national industry group helping set up contingency plans to isolate all workers as manufacturing emerges as a potential new hotspot for infections. Toyota Motor Corp. earlier this week extended indefinitely its shutdown of three plants in Thailand because of Covid-related parts shortages.

Industry groups in both countries have called on their governments to help procure vaccines they intend to distribute privately, seeking to accelerate inoculation programs that are behind schedule. Only about 10% of factory workers are vaccinated in Thailand, according to the Federation of Thai Industries.

“The sector is lost. There’s nowhere we can turn to for vaccines,” said Supant Mongkolsuthree, the Thai group’s chairman. “Vaccines are the best solution, the best way to protect the people and the manufacturing sector. This will help prevent factories from becoming a source of infections.”

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