Nghe An textile and garment enterprises struggle during the epidemic season

Shortage of workers due to epidemic

Currently, textile and garment enterprises proactively place orders to ensure jobs for workers. Photo: Thu Huyen

Currently, Nghe An has more than 20 garment projects that have been invested in, built and put into operation, creating jobs for more than 25,000 workers, mainly in rural areas. In addition, more than 10 other projects in the province have been and are making new investments or expanding capacity.

Mr. Nguyen Van Hiep - Head of Industrial Management Department, Department of Industry and Trade said: Although the Covid-19 epidemic is complicated, the supply chain of textile materials is not broken. The current encouraging signal for textile and garment enterprises is that orders are abundant, production continues to grow with export turnover in the first 6 months reaching 139 million USD, up 34.5% over the same period. In early 2021, many textile and garment enterprises in Nghe An have signed orders until the end of the year and the following year.

Textile and garment enterprises strictly implement epidemic prevention and control measures to maintain stable production. Photo: Thu Huyen

To performDual goals of economic development and epidemic preventionEnterprises proactively equip themselves with alcohol sanitizer, masks, rapid testing, develop work plans, arrange safe accommodation, pick up and drop off workers, etc.

However, businesses are also struggling with many difficulties:labor shortage, lack of containers for export, increased production costs... affecting profits, many orders at risk of not meeting progress are concerns of businesses.

According to the reporter's investigation, Hoang Thi Loan Textile Joint Stock Company currently has only 1/3 of its workers operating machines; Minh Anh - Kim Lien Garment Company is short of 500 workers; Prex Vinh Company Limited is better off but its capacity is less than 90%...

“Many workers have to be quarantined, causing the production line capacity to not reach its capacity; because some localities are locked down, social distancing to prevent and control the epidemic, and strictly controlling transportation vehicles, the cost of transporting goods in and out has also increased, taking a lot of time and effort of businesses,” Mr. Tran Duc Long - Chief Accountant of Prex Vinh Company Limited worried.

Minh Anh Garment Company - Nghe An deploys Covid-19 testing for workers and laborers. Photo: Thu Huyen

Mr. Nguyen Dinh Vinh - Deputy General Director of Minh Anh Garment Joint Stock Company - Nghe An shared: Our biggest difficulty right now is the shortage of labor and high production costs. At the time when Vinh city implemented Directive 16 and maintained epidemic prevention and control checkpoints, many workers in the districts could not enter Bac Vinh Industrial Park to work. Many workers in communes in Thanh Chuong, Nam Dan districts and Ha Tinh province had to quarantine at home.

Container rental prices hit record high

Not stopping there, most import and export businesses are stuck because of the lack of containers, the rental price of containers is high but there are no containers to rent, greatly affecting the import and export plan. Currently, Minh Anh - Kim Lien Garment Company has about 100 containers in inventory, and has to rent a yard to store the goods.

Many garment enterprises in Nghe An have arranged accommodation and meals for workers to ensure epidemic prevention and maintain production. Photo: Thu Huyen

To maintain production, we have to arrange vehicles to pick up and drop off workers. For example, Minh Anh - Kim Lien Garment Factory has more than 3,000 workers, of which 1,500 are concentrated in the districts. Every day, the company has arranged nearly 100 round-trip trips to transport workers, ensuring the principles of epidemic prevention and control. Then, rapid Covid-19 testing for thousands of workers also increased costs. Some orders have been issued but the disbursement is slow because the customers are also affected by the epidemic.

Mr. Nguyen Dinh Vinh - Deputy General Director of Minh Anh Garment Joint Stock Company - Nghe An

Sharing this difficulty, the leader of Hoang Thi Loan Textile Joint Stock Company said that currently the number of machine operators is only 1/3; some workers live in the company. In addition to the difficulty of not having enough machine operators is the problem of transportation costs. Every month our company needs about 40 containers to go and return but currently there are none; Since the end of 2020 until now, the transportation cost has increased cumulatively, and now the sea container shipping cost on some routes continues to increase at a record level.

Containers are loaded and unloaded at Cua Lo Port. Photo: Thu Huyen

For example, the shipping fee from Hai Phong Port to Europe used to cost about 1,500 USD/container, but now it is at 7,000 - 8,000 USD/container; from Hai Phong to the US before the pandemic was less than 1,000 USD/container, but now it has exceeded 10,000 USD. Besides the high shipping cost and the difficulty in booking a place on the ship, there are also no empty containers to rent, and the companies are constantly delaying. Currently, businesses have to export goods to Egypt but there are no containers, similarly, containers to import raw materials from Singapore are also expensive.

Lacking labor, Hoang Thi Loan Textile Factory currently has only 1/3 of its workers operating the machines. Photo: Thu Huyen

According to the leader of the Department of Industry and Trade, in the current complicated epidemic situation both domestically and globally, although textile and garment orders have returned, in order to develop sustainably and overcome challenges from the epidemic, textile and garment enterprises are in great need of support policies from the State. In addition to reducing and extending taxes, fees, bank interest rates, etc., there should be favorable policies for domestic and foreign investors to build closed textile and garment chains, thereby increasing the capacity of domestic enterprises, increasing export quantity and value, increasing profits, etc.

According to the Ministry of Industry and Trade, regarding the increase in container freight rates, representatives of shipping lines explained that the impact of the epidemic has prolonged the clearance of goods and the rotation of empty containers. In addition, the sudden increase in the amount of goods exported to Europe and the US has led to a shortage of empty containers for packing.
In response, shipping lines also proposed that authorities consider resolving the situation of thousands of unclaimed containers at the port to "source" empty containers for export.