VIETNAM
& the Pandemic
Latest
CBEC China or Vietnam
This type of e-commerce is called cross-border e-commerce (CBEC), wherein, products or services are sold to buyers overseas through e-commerce websites. The extent of globalization is such that the annual growth rate of CBEC, which is 17%, has surpassed the growth...
VIETNAM ECONOMY * 2022 Forecast
Vietnam Economy * 2022 Forecast NDO - With trade and domestic production bouncing back despite negative impacts of the health crisis, the government is making its great efforts to continue reviving the economy, which is expected to take the lead in the region in...
Vietnamese Consumers & TET – Lunar New Year 2022
Latest ArticlesLatesVietnamese Consumers & TET - Lunar New Year 2022 The outbreak of COVID-19 has brought upon unprecedented challenges and is having a significant impact on Vietnam in many aspects. GDP grew only 1.42% this year through September, with its...
Vietnam FMCG Monitor in May 2021
Vietnam economic growth shows a recovery in Q1, together with an average CPI at 20-year low. Other economic indicators such as FDI also rebound significantly in the first quarter of 2021. However, the number of suspended operations still increases, remaining...
Vietnam Food & Beverage Industry 2021
According to a survey of Vietnam Report, 50 per cent of customers have spent more on foods boosting immune system and clean foods due to the COVID-19. Food and beverages are in the fast-moving consumer goods (FMCG) category. For many years, this has always been one...
FDI Data Shows Vietnam’s Steady Economic Growth
Vietnam Economic News Vietnam has garnered international praise for its swift and effective response to the COVID-19 outbreak. Although the country is not immune to the global economic downturn, its prospects for recovery remain positive and are the brightest among...
August 2021: Maintaining Operations
- As the fourth wave of the pandemic takes a toll on Vietnam, the Government has issued directives to ensure isolation and maintain production to ensure dual goals of containing the pandemic while ensuring economic activity.
- While businesses are facing challenges, many have adopted these measures to ensure they can maintain production despite lockdowns and movement restrictions.
- Vietnam looks at how businesses can maintain production while looking to the future and adapting to a new normal.
VIETNAM
August 2021: Maintaining Operations
Vietnam has been severely hit by the fourth wave of COVID-19 resulting in lockdowns, movement restrictions, and thus disruption to supply chains and factory shutdowns. While commercial center Ho Chi Minh City is the largest hotspot, all of the southern provinces have been affected along with strict social distancing measures. Besides the South, movement restrictions have also been introduced in major cities such as the capital Hanoi as well as Da Nang, Bac Ninh, and Hai Phong.
In this scenario, how can businesses operate and how can they ensure business continuity?
Vietnam’s new wave and restrictions have definitely made it challenging for business given that cases have been increasing and the Government has gradually ramped up movement restrictions. Businesses should ensure that they are up to date with the latest Government directives and restrictions as these can change frequently.
Government introduces directives for isolation and maintaining production
To main production and maintaining dual goals of epidemic prevention and economic growth, the Government asked industrial parks and manufacturing businesses to arrange employees to work at the factory or production site, and eat and sleep on-site if they want to maintain production. This is known as ‘3T’ or ‘three on the spot’. If businesses cannot do this, they must implement a ‘one route, two destinations’ model which means businesses must arrange transportation on one route between the accommodation location such as dormitory, hostel, or hotel, and the work venue. Businesses in certain areas that have not been able to adhere to the new requirements have suspended operations until they have made the necessary arrangements.
Nevertheless, this has posed challenges for businesses that have to respond to these changes in a short amount of time. Businesses have also struggled to ensure sufficient living arrangement facilities and food supplies for employees that are willing to stay on site.
In addition, authorities have mandated businesses to ensure safety as per COVID-19 norms on social distancing and separate working places at production sites.
These include COVID-19 test results before entering production sites as well as transport arrangements between the workplace and hostel/dormitory/apartment/hotel.
Employers are also required to register with the authorities if implementing the 3T or ‘one route, two destinations’ model but these may vary depending on the province and if the business is located in an industrial zone.
Employers should ensure that employees have agreed to live on-site and work before implementing these arrangements. If an employer needs to suspend work for 14 days, they would need to negotiate payment with the employee, but the payments must not be lower than the minimum wage. If the work suspension is more than 14 days, the salary can be negotiated with the employee as well as taking into consideration unpaid leave, annual leave or temporary suspension of the labor contract. Employees are also eligible for certain incentives by the Government if their work is affected by the pandemic.
Businesses will have to prepare, adapt, and accept the new normal
These regulations may change at short notice and businesses will have to keep up-to-date with the latest rules.
Nevertheless, some firms have managed to keep production going and have maintained being COVID-19 free. For example, around 3,000 firms in Binh Duong province, the next hotspot after Ho Chi Minh City, have managed to keep workers safe and production going. Most of the firms have managed to maintain operations going for the past 45 days.
Measures including, isolating completely from the outside, maintaining a specified area outside production sites for delivery drivers to pick up goods without any contact, and supplying workers with personal care products and living essentials. Drivers and cooks are also kept in separate areas and are tested frequently. Further, such businesses have also incentivized employees for staying on-site by paying compensation.
As with last year, businesses will have to learn to innovate and adapt and find new ways to continue operations. Rather than depend on government support, businesses would have to accept the new reality and adapt for the long-term. Even with vaccines, pandemic-related variants are likely to come back anytime and anywhere.
Therefore, having an uninterrupted supply chain will be crucial. Experts have said that, if Vietnam controls the pandemic by the third quarter and business activities can return to normal, around 9,000 workers would be needed to cater to demand at the end of the year in garment and footwear as well as increasing production for the lunar new year. Not only this prolonged factory shutdowns may affect demand in the US and Europe who get busy for the Thanksgiving and Christmas holidays.
According to the Ministry of Planning and Investment (MPI), in the first six months of 2021, 70,209 businesses closed – a 24.9 percent increase year on year – with most businesses shut being small scale and less than five years old. In contrast, more than 67,000 businesses were registered up 8.1 percent in the same period, mostly in manufacturing, car and motorbike retail and repair and construction.
Vietnam’s exports had increased by 29 percent in the first half of the year due to a recovering US market and the EU-Vietnam free trade agreement (EVFTA). Smart investors have already been working with suppliers to diversify and firms can negotiate for some items, but in the short-term costs are likely to increase.
Featured Author
Thinh D. Luu
Chief Executive Officer – Advisory Board of G.H.T Group
Staff Picks
CBEC China or Vietnam
This type of e-commerce is called cross-border e-commerce (CBEC), wherein, products or services are sold to buyers overseas through e-commerce websites. The extent of globalization is such that the annual growth rate of CBEC, which is 17%, has surpassed the growth...
CBEC China or Vietnam
This type of e-commerce is called cross-border e-commerce (CBEC), wherein, products or services are sold to buyers overseas through e-commerce websites. The extent of globalization is such that the annual growth rate of CBEC, which is 17%, has surpassed the growth...
VIETNAM ECONOMY * 2022 Forecast
Vietnam Economy * 2022 Forecast NDO - With trade and domestic production bouncing back despite negative impacts of the health crisis, the government is making its great efforts to continue reviving the economy, which is expected to take the lead in the region in...
Vietnamese Consumers & TET – Lunar New Year 2022
Latest ArticlesLatesVietnamese Consumers & TET - Lunar New Year 2022 The outbreak of COVID-19 has brought upon unprecedented challenges and is having a significant impact on Vietnam in many aspects. GDP grew only 1.42% this year through September, with its...
Vietnam FMCG Monitor in May 2021
Vietnam economic growth shows a recovery in Q1, together with an average CPI at 20-year low. Other economic indicators such as FDI also rebound significantly in the first quarter of 2021. However, the number of suspended operations still increases, remaining...
Work from Home
Work from Home
CBEC China or Vietnam
This type of e-commerce is called cross-border e-commerce (CBEC), wherein, products or services are sold to buyers overseas through e-commerce websites. The extent of globalization is such that the annual growth rate of CBEC, which is 17%, has surpassed the growth...
VIETNAM ECONOMY * 2022 Forecast
Vietnam Economy * 2022 Forecast NDO - With trade and domestic production bouncing back despite negative impacts of the health crisis, the government is making its great efforts to continue reviving the economy, which is expected to take the lead in the region in...
Vietnamese Consumers & TET – Lunar New Year 2022
Latest ArticlesLatesVietnamese Consumers & TET - Lunar New Year 2022 The outbreak of COVID-19 has brought upon unprecedented challenges and is having a significant impact on Vietnam in many aspects. GDP grew only 1.42% this year through September, with its...
Vietnam FMCG Monitor in May 2021
Vietnam economic growth shows a recovery in Q1, together with an average CPI at 20-year low. Other economic indicators such as FDI also rebound significantly in the first quarter of 2021. However, the number of suspended operations still increases, remaining...