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Factbox-How COVID-19 in Southeast Asia is threatening global supply chains By Reuters

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© Reuters. FILEPHOTO: A protective suit is worn by soldiers to disinfect streets following recent outbreaks of coronavirus diseases (COVID-19), in New Taipei City. May 27, 2021. REUTERS/Ann Wang/File Photo

SINGAPORE, (Reuters) – Coronavirus epidemics have hit Southeast Asia’s factories across all industries. They threaten the region’s recovery from COVID-19 and have disrupted global supply of goods like apparels and automobiles.

The Coronavirus bans forced companies to shut down factories, suspend or cut operations during a period when Asia’s manufacturing sector was already struggling with rising raw material prices and signs of slowing Chinese growth.

Vietnam, Malaysia, Thailand and Thailand are the three major regional manufacturing hubs. These countries produce some of the top consumer brands in the world.

VIETNAM

Vietnam’s major cities and industrial centres were hit hard by a coronavirus outbreak in April. They imposed strict lockdowns and forced electronics, footwear and apparel producers to cease or minimize their operations. In recent weeks, the restrictions were eased.

The initial outbreak affected northern industrial regions, which are home to suppliers of Apple (NASDAQ) and Samsung (KS), as well as other global tech firms.

Four industrial parks were ordered temporarily by Bac Giang, a northern province, in May. Three of them house Foxconn production facilities.

It spread to the south. Ho Chi Minh City in Vietnam and neighboring provinces enforced strict lockdown measures.

Taiwan’s Pou Chen Corp made footwear that month. Nike (NYSE:), and Adidas (OTC): The South Korean shoe manufacturer Nike shut three of their factories.

Nike has reduced its fiscal 2022 sales forecasts and warned that holiday delays could occur. Apple’s iPhone 13 customers are experiencing longer than expected delivery times as a result of an outbreak in Vietnam. Vietnam is the location of components that make up the camera module.

According to the Vietnam Textile and Apparel Association, several fashion companies have moved orders from Vietnam and over 60% of footwear and apparel manufacturers in Vietnam have been penalized for slow delivery.

MALAYSIA

Many automakers and semiconductor firms have stated in the recent months that supply chain disruptions caused by pandemics in Malaysia are affecting their business.

Malaysia placed a lockdown on June 1st after infections reached record-breaking levels. However, restrictions have been gradually lifted since July.

In June and July, many glove-makers were also affected by curbs in Malaysia which accounts for 67% of global rubber glove demand.

Malaysia has factories that serve semiconductor producers such as Europe’s STMicroelectronics or Infineon (OTC), and major carmakers, including Toyota Motor (NYSE.) Corp. Ford Motor (NYSE.) Co.

STMicroelectronics stated in July that it had temporarily shut down its Malaysian assembly plant for eleven days because of the coronavirus.

Infineon, the German chipmaker said that in August it would take a significant hit due to the shutdowns of its Malaysia plant.

The same month: Ford Motor Co said it would temporarily shutter the U.S. plant that builds its best-selling pickup truck due to a semiconductor-related parts shortage caused by the Malaysian outbreak.

THAILAND

Thailand implemented stricter restrictions for July and august in high-risk regions, such as Bangkok.

In order to prevent factory shut downs in Southeast Asia elsewhere, the government introduced “bubble and Seal” measures. These are where confirmed COVID-19 cases receive treatment. Close contacts from other workers are also made.

Numerous companies, including Charoen Pokphand Foods, Thai Plastic Industrial and Soomboon Advance Technology, have had to temporarily shut down operations due to deep cleaning following COVID-19 case resolutions in the recent months.

Toyota suspended vehicle production at three Thai plants in July because of parts shortages resulting from the pandemic.

Thailand is Asia’s fourth-largest autos assembly and export hub for some of the world’s largest carmakers such as Toyota and Honda.

Due to tight border control, infection and quarantines, a shortage of migrants has affected food production and rubber production.

Siam Agro-Food Industry (a Thai exporter of processed fruits) has not been able fill all 550 jobs it had because the workers have gone back to Thailand and are now unable enter Thailand.



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