Eighty percent of leather and footwear enterprises in the south have stopped production due to social distancing and labor shortage.
“Leather and footwear businesses are suffering great losses due to having to stop or reduce production. They are faced with canceled orders while still having to bear the costs of maintaining factories and paying workers,” according to Vietnam Leather, Footwear and Handbag Association( Lefaso).
Lefaso said prolonged social distancing has forced 80 percent of leather and footwear factories in Ho Chi Minh City, Dong Nai, Binh Duong, An Giang, and Kien Giang to stop production for not being able to accommodate workers on-site or provide transportation to bring workers from their accommodations to the factory.
Businesses in the north and central regions have narrowed their production by 30-50 percent.
The lack of containers, high cost of logistics and international shipping (5-10 times), expensive fuel and the rising price of imported raw materials have majorly impacted the industry.
According to Lefaso, Vietnam earned $850 million from exports of footwear, and $150 million from handbags in August, year-on-year decreases of 38.5 percent and 37.9 percent.