Nike has made a sharp recovery from the pandemic as it reported $ 12.3 billion in revenue for the spring months ending its financial year in an all-time high profit. However, there’s bad news for Swoosh as they see a big problem for their production plans in FY 2022.
Nike’s massive production plant located in Ho Chi Minh City in Vietnam faces a shutdown after a Covid – 19 spread across the factory with several workers said to be infected. The company declined to comment on whether store supplies would see deficits as a consequence of the health crisis.
About half of Nike’s shoes were manufactured in Vietnam in the last financial year, as it faces challenges for its supply chain network globally. Vietnam has seen a record rise in cases since last April, with many infection clusters in its industrial provinces. Vietnam has vaccinated around 4% of its 100 million population. Its capital Hanoi has stopped all non-essential services due to new groups of Covid infections and on Sunday urged its citizens to stay at home.
One of Nike’s worst affected suppliers in the region, Pou Chen Corp, also makes footwear for Adidas and is the world’s largest manufacturer of branded trainers. In a statement, the country’s health ministry said Pou Chen’s Pouyuen Vietnam factory would see a suspension in operations for 10 days.
The factory has over 56,000 workers, the largest in the entire city. It was unable to stay open and arrange for its workers to sleep at the factory, as required by authorities to limit the spread of infections. The government added factory workers to its vaccine priority list after the rise in cases in late April forced manufacturing areas in the north of the country to close.
Nike employs over 4,50,000 workers in these factories and over 80% of them are women. Nike has rolled out a statement saying, “The health and safety of our teammates, as well as that of our suppliers, remains our top priority, We are confident in Nike’s ability to navigate these near-term dynamics, and we remain prudent in our planning.”
The company has promised to continue to work with its suppliers to support them in response to the rise in Covid cases.
It seems while most of the world returns to normal Asian nations continue to tackle the pandemic, and to tackle this, western companies with production facilities all across Asia must join hands with health authorities to stop the outbreak.