Vietnam commits to supporting Samsung and its suppliers to maintain supply chain

Samsung’s factory in Thai Nguyen before the COVID-19 pandemic.

Vietnam’s Ministry of Industry and Trade on October 14 affirmed that country’s current top priority is to support businesses in Vietnam to achieve “dual goals” while ensuring safety in the context of the COVID-19 pandemic and maintaining production to avoid supply chain disruptions.

The commitment of the Vietnamese authorities was made at an online conference with Samsung Vietnam and more than 20 suppliers of Samsung Vietnam in Ho Chi Minh City, Hanoi, Bac Giang, Bac Ninh, Binh Duong and Dong Nai to grasp catch difficulties, problems and handle recommendations of Samsung and suppliers, and support enterprises to restore production and maintain supply chains in the coming time.

Earlier, on October 12, Bloomberg reported that the world’s two leading chip manufacturers, Intel Corporation and Samsung Electronics Company, are aiming to restore the entire operation of their factories in HCM City at the end of November, to help prevent the global supply chain from being disrupted by the impact of the COVID-19 pandemic.

The newspaper quoted a manager of Saigon Hi-Tech Park, which is supporting businesses to rent land here, as saying that many businesses are currently operating at about 70% of capacity and will operate at their full capacity next month. However, this representative did not say how to attract enough workers to return to work after the wave of workers’ migration to their hometowns from major production areas.

Many companies operating in the Saigon Hi-Tech Park lost about 20% of their export orders in July and August, the management of the Tech Park was quoted as saying by the Saigon Giai Phong newspaper.

The 4th outbreak of the disease has forced Vietnam to impose a blockade, isolation and closure of almost all factories in HCM City and other “epidemic” provinces.

Businesses that want to maintain operations must meet the “three on the spot” requirements (laborers work, eat and rest on the spot) set by the Vietnamese government. Intel spent $6 million a month to meet these regulations, according to Bloomberg.

In July, Samsung had to close 3 of its 16 factories in Saigon Hi-Tech Park while cutting more than half of its workers.

At the meeting on October 14, Samsung Vietnam and its suppliers proposed to the Ministry of Industry and Trade about the difficulties they are facing such as: Enterprises have to operate below capacity or suspend operations, lack of human resourcesdifficulty moving between areas, costs related to epidemic prevention…

The Samsung representative emphasized the risk of losing the market if the supply chain and exports are disrupted, the situation leads to customer cancellations and supply chain changes.

Enterprises also reflect that the application of regulations and control of goods circulation is inappropriate and inconsistent in localities, causing difficulties for enterprises’ production and business activities.

The stability of supply businesses plays a very important role in the global production chain in general and Samsung Vietnam in particular. During the recent complicated epidemic, Samsung Vietnam has made efforts together with supply companies to overcome difficulties by regularly working with supplier companies, encouraging employees, only directing companies in the supply network to apply the same epidemic prevention plan, partially support the epidemic prevention budget,” the official website of the Government of Vietnam quoted Mr. Choi Joo Ho, General Director of Samsung Vietnam as saying.

He expressed hope that Vietnam’s regulatory agencies will quickly remove difficulties for businesses to “help strengthen business confidence and the Government.”

Representative of the Ministry of Industry and Trade, Deputy Minister Do Thang Hai, pledged to coordinate with ministries, branches and localities to support businesses, timely update support policies, new incentives and solve difficulties for businesses. (Translated)