World’s biggest maker of sneakers asked to halt Vietnam operations

Ho Chi Minh City is seeking the Vietnam premier’s approval to temporarily shut down a unit of Pou Chen Corp., the world’s largest maker of athletic shoes, because of concerns about a potential outbreak of the coronavirus.

Authorities for the metropolis, which has the most confirmed virus patients in the country after Hanoi, are concerned about Pouyuen Vietnam, which employs 70,000 workers and operates three shifts a day. An outbreak will affect not only the workers, but those at neighboring firms and four bordering provinces, the city’s mayor said in an April 11 letter to the prime minister and seen by Bloomberg News. The mayor’s office confirmed the authenticity of the letter.

The city has proposed a three-day suspension from Monday, coinciding with the final days of a 15-day national social distancing order imposed on April 1, to ensure the safety of workers amid the developing pandemic, Mayor Nguyen Thanh Phong said in the statement.

Pou Chen said it’s the largest branded athletic and casual footwear producer in the world, and a manufacturer for international brands such as Nike, Adidas and New Balance among others. The group produces over 300 million pairs of shoes per annum, it said on its website, accounting for approximately 20% of the combined wholesale value of the global branded athletic and casual footwear market.

Risk Indicators

Ho Chi Minh City last week issued a set of indicators to assess the infection risk of companies based there in an effort to curtail the outbreak. A firm is required to cease operations if it scores more than 80%, according to the statement. Pouyuen was graded at 81%.

The firm will comply with the decision and extend the suspension if the isolation order isn’t lifted after April 15, according to the statement, citing a company leader who met authorities on Friday.

Pouyuen will seek to limit the infection risk, the Thanh Nien newspaper reported, citing Cu Phat Nghiep, chairman of Pouyuen Vietnam Labour Union. Measures will include different starting hours, temperature checks, the use of face masks and social distancing.

Nghiep said he couldn’t immediately comment when reached by Bloomberg News. A representative at Pouyuen said he hadn’t heard of any shutdown plan by the company, adding it is closed on Sunday.

Vietnam had 262 virus cases as of April 13, including 144 patients who have recovered, according to the country’s health ministry.

By Mai Ngoc Chau – Bloomberg – April 13, 2020