Factbox: How COVID-19 in Southeast Asia is threatening world provide chains

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SINGAPORE, Oct 6 (Reuters) – Fresh coronavirus outbreaks in Southeast Asia have harm manufacturing facility exercise throughout industries, threatening the area’s restoration from the COVID-19 pandemic and disrupting world provides of products similar to apparels, vehicles, and electronics.

Coronavirus curbs have led firms to close factories and droop or scale back operations at a time when Asia’s manufacturing sector is already grappling with rising uncooked materials prices and indicators of a slowing Chinese economic system.

Vietnam, Malaysia and Thailand are three of the area’s main manufacturing hubs and produce items for a few of the world’s largest client manufacturers.

VIETNAM

A coronavirus wave since April compelled Vietnam’s largest cities and industrial hubs to impose strict lockdowns, prompting electronics, attire and footwear producers to droop or scale back operations. The restrictions have been eased in current weeks.

The outbreak initially hit northern industrial areas, the place suppliers for Apple (AAPL.O), Samsung (005930.KS) and different world tech corporations are situated. learn extra

In May, the northern province of Bac Giang ordered 4 industrial parks, together with three that home manufacturing services of Taiwan’s Foxconn (2317.TW), to briefly shut down. learn extra

The outbreak unfold additional south and, in July, Ho Chi Minh City and neighbouring industrial provinces imposed strict lockdown measures.

That month, Taiwan’s Pou Chen Corp (9904.TW), which makes footwear for Nike (NKE.N) and Adidas (ADSGn.DE), suspended operations at its plant in Ho Chi Minh City and Changshin Vietnam, a South Korean agency manufacturing sneakers for Nike, shut three of its factories. learn extra

Nike has minimize its fiscal 2022 gross sales expectations and warned of vacation delays. Buyers of Apple’s new iPhone 13 are going through longer-than-expected supply occasions due to the outbreak in Vietnam, the place parts for the gadget’s new digital camera module are assembled. learn extra

The Vietnam Textile and Apparel Association stated a number of worldwide vogue manufacturers have shifted their orders away from Vietnam and 60% of attire and footwear makers within the nation have been fined for sluggish deliveries.

MALAYSIA

Several automakers and semiconductor firms have stated in current months that pandemic-related disruptions in Malaysia have been hitting provide chains. learn extra

Malaysia imposed a lockdown in June as infections hit document ranges however has steadily eased restrictions on manufacturing since July.

Curbs in Malaysia, which provides about 67% of the worldwide rubber glove market, additionally compelled many glove makers to droop operations in June and July. learn extra

Malaysia is dwelling to factories serving semiconductor makers similar to Europe’s STMicroelectronics (STM.BN) and Infineon (IFXGn.DE), in addition to main carmakers together with Toyota Motor Corp (7203.T) and Ford Motor Co (F.N).

STMicroelectronics stated in July it briefly closed its meeting plant in Malaysia for 11 days because of the coronavirus.

German chipmaker Infineon stated in August the agency will take a success within the excessive double-digit million euros from shutdowns at its Malaysia plant.

That similar month, Ford Motor Co stated it could briefly shutter the U.S. plant that builds its best-selling pickup truck because of a semiconductor-related elements scarcity brought on by the Malaysian outbreak. learn extra

THAILAND

Thailand imposed more durable restrictions in July and August in high-risk provinces together with Bangkok. learn extra

To keep away from the manufacturing facility shutdowns seen elsewhere in Southeast Asia, the federal government adopted “bubble and seal” measures, whereby confirmed COVID-19 circumstances are despatched for therapy and shut contacts remoted from the opposite employees.

But a number of firms have needed to briefly shut operations for deep cleansing after COVID-19 circumstances in current months, together with Charoen Pokphand Foods (CPF.BK), Thai Plastic Industrial (TPLASm.BK), and Soomboon Advance Technology (SAT.BK).

In July, Toyota (7203.T) halted car manufacturing at three of its Thai crops because of elements shortages brought on by the pandemic. learn extra .

Thailand is Asia’s fourth-largest autos meeting and export hub for a few of the world’s largest carmakers similar to Toyota and Honda (7267.T). learn extra

A scarcity of migrant employees, because of strict border controls, infections and quarantines, has additionally hit meals and rubber manufacturing.

Siam Agro-Food Industry, a Thai processed fruit exporter, has solely been capable of fill 400 of the 550 roles it has accessible as employees, who returned to their dwelling international locations, are unable to enter Thailand because of border closures.

Reporting by Liz Lee in Kuala Lumpur and Orathai Sriring in Bangkok; Writing by Ana Nicolaci da Costa; Editing by Sam Holmes

Soldiers in protective suits disinfect a street following the recent surge of coronavirus disease (COVID-19) infections, in the Tucheng district of New Taipei City, Taiwan May 27, 2021. REUTERS/Ann Wang/File Photo

A man works at an assembly line of Vinfast Auto factory in Hai Phong city, Vietnam, June 14, 2019. REUTERS/Kham

Soldiers in protective suits disinfect a street following the recent surge of coronavirus disease (COVID-19) infections, in the Tucheng district of New Taipei City, Taiwan May 27, 2021. REUTERS/Ann Wang/File Photo