July 27, 2021

Asian textiles lose more than 200 million euros per coronavirus

The coronavirus is facing a heavy blow to the textile industry in several Southeast Asian countries, where losses in the sector can amount to some 238 million dollars (about 207 million euros), especially in Vietnam.

The impact in the region is mainly due to the shortage of raw materials from China, the epicenter of COVID-19 and the main supplier of Southeast Asia.

Textile is a sector of weight in Southeast Asia, which makes clothes for various foreign groups such as the Swedish H&M and the Spanish Inditex, which for example provide clothing and footwear 149 factories in Vietnam and 144 in Cambodia, according to data from the company that owns brands like Zara.

According to a UN report from the beginning of March, the impact on impact in the region will be felt especially in Vietnam (183 million euros), Thailand (14 million euros) and Indonesia (10 million euros).

In Vietnam, the textile industry has grown in recent years to provide employment for some three million workers throughout the country and produce exports worth 39,000 million dollars (34,500 million euros), all thanks to costs of production lower than in China.

“95% of Vietnamese textile factories produce with Chinese fabric,” David Lee, sales director at Phukhang Manufacture and Trading, a company that works with major brands in the United Kingdom and Spain, told Efe.

The strict sanitary and customs controls with all the goods that come from China, together with the unemployment of many factories in that country have slowed the production of many Vietnamese companies, which are looking for alternatives to the Asian giant to import the fabric.

But even companies that do not depend on Chinese suppliers are suffering the effects of the crisis due to the general economic slowdown.

The textile industry in Burma does not yet have a volume comparable to that of Vietnamese, but its exports have not stopped growing since 2013, to reach 4,000 million dollars (about 3,500 million euros) in the fiscal year 2018-2019, according to the Burmese Ministry of Commerce.

However, the growth of the sector, which employs some 500,000 workers, has been suffering a serious setback since January as a result of the shortage of raw materials, mostly from China, and declining orders.

Since January, seven factories have been permanently closed, four have been temporarily closed and two others have been forced to reduce their workforce in the Yangon and Pegu regions, incipient industrial belts in the country, according to information from the Burmese Ministry of Labor collected by the local press

The closures have meant the dismissal of more than 3,000 workers, many of whom have organized protests because they have not received their February wages.

“The situation will not improve, I estimate, until the end of April … We are really worried,” Khine Khine Nwe, deputy secretary general of the Federation of the Chamber of Commerce and Industry of Myanmar, told Efe.

In Cambodia, the textile industry, which employs about 700,000 workers and accounts for 45% of its exports, is also being hit by the coronavirus and, according to the Ministry of Labor, 10 factories have suspended production so far, which It has affected about 3,000 workers, but the situation is likely to get even worse.

“In March almost 200 factories could face the suspension as a result of the lack of raw materials, which would affect 160,000 workers,” a spokesman for the Ministry of Labor said in statements collected by local media last week.


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