Nike halts footwear production due to Covid outbreak

Production at some of Nike’s largest plants in Vietnam has been disrupted as Covid has spread through factories. 

The company refused to comment on whether store supplies would see shortages as a result of the outbreak.

Around half of Nike’s shoes were manufactured in Vietnam in the last financial year so this will mean challenges for its supply chain. 

Vietnam has seen a record rise in cases since last April with many infection clusters in its industrial provinces. 

Apple, Samsung and Puma could also be affected by the surge in cases recorded at suppliers’ factories in the country. 

“The health and safety of our teammates, as well as that of our suppliers, remains our top priority” – a statement from Nike said.

Nike said the company would continue to work with its suppliers to support them in response to the rise in Covid cases. 

“We are confident in Nike’s ability to navigate these near-term dynamics, and we remain prudent in our planning,” the statement added. 

One of Nike’s worst affected suppliers in the region, Pou Chen Corp, also makes footwear for Adidas and is the world’s largest manufacturer of branded trainers.

It suspended operations at its plant in Ho Chi Minh City on Wednesday due to the outbreak in infections. 

In a statement, the country’s health ministry said Pou Chen’s Pouyuen Vietnam factory would be suspended for 10 days. 

The factory is Ho Chi Minh City’s largest employer, with a total of 56,000 workers. But it was unable to stay open and arrange for its workers to sleep at the factory, as was required by authorities to limit the spread of infections, according to the health ministry. 

Nike employs over 450,000 workers in the country, 80 % of whom are women. 

Similar challenges could also be faced for Puma, whose footwear is also manufactured in the country. Apple and Samsung also have large suppliers in the worst affected factories in the northern region of Vietnam. 

Apple did not give a comment on whether the outbreak will mean item shortages in shops, while Adidas, Puma and Samsung did not immediately respond to the BBC’s request for comment. 

Samsung makes around half of its phones in Vietnam and has had to stop work at three factories in Ho Chin Minh City. According to the health ministry’s website, Samsung Electronics is planning for workers to sleep at the plants and has currently cut its staffing to 3,000 from 7,000.