Half of Nike's shoes are made in Vietnam © Diego Puletto/Getty Images
Half of Nike's shoes are made in Vietnam © Diego Puletto/Getty Images

Nike supplies under threat as factories shut

21 July 2021

A surge in Covid cases at the largest trainer factory in the world is threatening Nike’s global supply chain. 

The factory in Vietnam, which produces footwear for Nike and Adidas, has been shut down by health officials.  

Cases in Vietnam have drastically increased since April, with a large proportion situated in the country’s industrial provinces. 

Almost half of Nike’s shoes are produced in Vietnam. The outbreak also threatens Puma, Samsung and Apple, who have supplier factories in the area. 

Nike said in a statement: “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. 

“As we continue to navigate these circumstances, we expect our suppliers to prioritise the health and livelihoods of their employees and continue to comply with legal requirements and the Nike code of conduct on the provision of wages, benefits and severance.”

The factory is Ho Chi Minh City’s largest employer, employing over 56,000 people. It is the world's largest manufacturer of branded trainers. 

Last year, the site was ordered to suspend production for two days after failing to meet social distancing rules.

Samsung, which makes around half of its phones in Ho Chi Minh City, had to cut staff from 7,000 to 3,000 due to a rise in cases and suspended work at three factories in the city. 

Samsung is making provisions to allow workers to sleep at the factories to ensure production can continue.  

Vietnamese officials in Hanoi encouraged citizens to stay home due to rises in infections. All non-essential services have been ordered to shut. 

Only 4% of the Vietnamese population has been vaccinated. The country has a population of around 100m people. 

The news comes despite Nike efforts to increase the speeds at which it is able to supply its products to international markets by nearshoring production in Asia and North America and introducing 1,200 new automated machines to allow supply chains to be more responsive.

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