Nike’s subcontractors in Vietnam have finally resumed production after the Delta variant had halted manufacturing processes in the region.
Nearly 200 factories in Vietnam that manufacture Nike products were closed after the Delta variant took hold on the country, causing the loss of over 160 million pairs of shoes.
Vietnamese contract factories made up a huge 50 per cent of branded footwear last year and the news of Nike’s factory closure caused its share price to slip 2.7 per cent in September.
Vietnam’s footwear factories, which produce shoes for Nike’s global sportswear rivals including Adidas and Puma, are expected to fully resume operations early next year after strict restrictions meant that factory workers were stuck in rural provinces.
The factories located in Vietnam’s southern industrial areas of Binh Duong, Dong Nai and Long An provinces have reported that 70 to 80 per cent of workers have returned to their jobs, according to Vietnam Leather Footwear and Handbag Association vice chairwoman Phan Thi Thanh Xuan.
Despite the majority of the workforce returning, analysts expect the supply chain to remain slow to begin with due to social distancing measures.
They believe that factories will start delivering a normal output in around five to six months.
“While Nike typically is incredibly well-equipped to manage such disruptions, we fear this issue is just too large to control, even for the best-run athletic brand in the world.”