As Vietnam battles a resurgence of Covid-19, the nation is going to extraordinary lengths to protect its reputation as a vital cog in the global tech supply chain — with thousands of workers sleeping on factory floors to minimize disruption.
In the northern provinces of Bac Ninh and Bac Giang, a key manufacturing hub that’s home to Samsung Electronics Co. and leading Apple Inc. suppliers, authorities say about 150,000 workers are living at industrial parks to reduce the risk of infections. In the commercial hub of Ho Chi Minh City, 22 companies with a workforce of 25,000 also set up sleepover sites for an unspecified number of employees, according to the city’s media center.
They’re sleeping on metal bunk beds with bamboo mats and cots in makeshift dormitories as well as in tents pitched on cement floors inside cavernous halls, and are quarantined until they test negative after returning from home.
“It’s strange to live in a factory and a bit difficult to sleep at first,” said Nguyen Thi Mai, 28, who’s been working for a Samsung supplier in Bac Giang for two years. “But my colleagues and I understand that it’s necessary and just temporary.”
Asia’s Factories See Hiccups as Virus Slams Parts of Region
Mai’s experience illustrates the stark divide between the world’s rich and poor. While employees in wealthy countries find refuge from the virus by working at home, the reverse approach is sometimes needed in developing nations that rely on physical labor to ensure their export-dependent economies keep powering ahead.
The Southeast Asian economy has benefited from a shift in the world’s supply chains, attracting more sophisticated manufacturing amid rising Chinese labor costs and the U.S.-China trade war. Massive foreign investment has created tens of thousands of factory jobs in some of the nation’s poorest provinces.
Authorities are now scrambling to defend such economic gains. In addition to initiating factory sleepovers, the government has allocated some of its relatively few vaccines to factory workers, including 400,000 shots for employees at Samsung and other global suppliers with plants in Bac Ninh and Bac Giang provinces.
Factory Closures
While Vietnam was successful at limiting infections during the early months of the pandemic, virus numbers began rising in late April. The outbreak forced the temporary closing of northern industrial parks housing units of Foxconn Technology Group and Luxshare Precision Industry Co., the primary assembler of Apple’s AirPods products.
Many companies are now being allowed to re-open after putting in place strict health and social distancing protocols.
Authorities have worked with companies including Luxshare “to have them arrange for their workers to sleep in the factories and in dormitories while also having them tested every week,” said Nguyen Dai Luong, chairman of the People’s Council of Viet Yen district, where four of the province’s five operating industrial parks are located. “That has significantly helped stop the virus spread and enabled factories to resume operations quickly.”
In Bac Ninh province, where Samsung has two factories, some companies have asked their administrative staff to work from home and allowed production line workers to sleep in the offices. Authorities told companies to arrange for workers to sleep on site for 15 days before switching with another group of employees, according to the provincial government’s website.
Foxconn, which makes networking products in the country and is planning to move some production of MacBooks and iPads to Vietnam, said in a statement it is “working closely with the Vietnamese government to ensure that we are able to comply with all relevant public health requirements.”
Samsung and Luxshare did not respond to emailed queries.
Vaccine Rollout
Alain Cany, chairman of the European Chamber of Commerce in Vietnam, said it was critical to minimize the economic impact of the virus and called for factory workers to be prioritized in the vaccine rollout.
“Factories and industrial zones are vital to Vietnam’s growth and development, as well as being an integral part of both local and international supply chains,” he said. “The most critical thing now, both for public health and economic growth, is a mass vaccination drive implemented at scale and pace.”
Vietnam had vaccinated about 4% of its population of 98 million as of early July, according to the health ministry. The government, though, is ramping up shots and aims to receive as many as 150 million doses to cover 75% of its population by early next year.
Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, said the measures should help keep production on track. And he stressed the importance of ensuring nations such as Vietnam, which are pivotal to global production, have access to adequate vaccine supplies.
“Although the slowdown might impact certain supply chains, I expect the situation to get back to normal quickly,” he said.
For now, camping out in factories enables workers like Le Thanh Hoa to keep earning a salary amid Vietnam’s lockdown-like restrictions in numerous parts of the country.
“We sleep in tents the company set up on the factory’s floor,” said the 25-year-old employee of South Korea’s Hana Micron Vina Co., an electronics components supplier. “I miss my parents sometimes but it’s actually quite nice to sleep in the factory because we have air conditioning 24 hours a day, unlike my home where it is very hot.”
— Eunice Chua in Singapore and Nguyen Dieu Tu Uyen in Hanoi
Charted Territory
Logistics Costs
Three main categories of logistics costs in the U.S. are near record highs
Source: Logistics Managers’ Index
*Note: 50 is the dividing line between expansion and contraction
The U.S. Logistics Managers’ Index for June reached the second-highest level on record, propelling the three-month moving average to an all-time high of 73.6. The monthly gauge measures capacity, utilization and costs for inventories, warehousing and transportation. The report released Tuesday showed warehouse and inventory costs at new highs, while transport prices were tapering off from a peak reached in April.
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— With assistance by Michelle Jamrisko, Debby Wu, and Mai Ngoc Chau
Supply China Latest: Vietnamese Workers Avoid Virus by Sleeping at Work - Bloomberg
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