Vietnam'S Largest Textile Company Intends To Suspend Wages For Half Of Its Workers.

The Vinatex, the largest textile company in Vietnam, is considering whether to decide whether to stop wages for up to fifty thousand industrial workers.

According to the International Federation of textile manufacturers, the global textile industry orders fell by about 31% between the end of March and the beginning of April. For Vietnam, which relies heavily on the textile industry and relies on China and the European and American markets, the impact is even more striking.

According to the Ministry of industry and trade of Vietnam, the clothing and footwear orders in April and May dropped by 70%. Even if the epidemic is controlled by the end of May, Vinatex will lose 1 trillion dong dong (about 42 million US dollars), and its annual profit in 2019 will be only 51 million.

Vinatex CEO Le Tien Truong said in a media interview that if the order is damaged until May, 30%-50% jobs will disappear. Vinatex has over 200 factories throughout Vietnam, employing a total of about 100 thousand workers. At present, Vinatex occupies 10% of Vietnam's textile industry.

For Vietnam's textile industry, there have been two crises this year because of the epidemic. First of all, China began to shut down its fabric factories in February. After the resumption of work in March, the epidemic in Europe and America also led to a sharp fall in demand. As more and more consumers are asked to stay at home, clothing retailers are trying to cut down old orders and cancel new orders. GAP, the US apparel giant, recently said that its stores had been closed down since February due to the closure of its new crown pneumonia epidemic, and that the cash flow of this week is only 5 billion yuan, which is not enough to support operations.

Vinatex is a state-owned enterprise in Vietnam, and Japan's Itochu has 15% of its business, which is also a foundry of H&M and ZARA, a well-known fast fading brand. Even if Vietnam is seeking industrial upgrading (the introduction of Samsung factories, etc.), the textile industry still accounts for 10% of the country's exports.

More importantly, the clothing industry is a labor-intensive industry. The monthly salary of a large number of textile workers is only about 3 million Vietnamese shield (near the minimum wage limit), and a large number of unemployed means that the government needs to pay more money for relief. At present, Vietnamese government affected enterprises and workers have launched a relief scheme worth 62 trillion dong dong.

At the beginning of this month, the textile industry association of six Asian countries issued a joint statement requiring clothing brands to compensate for the loss caused by the cancellation of orders. At present, although H&M and other brands retain orders for maintaining factory operations, many brands have asked to postpone the completion of their orders, causing further cash flow to the struggling textile industry.