Update: Manufacturers take on Ho Chi Minh City COVID restrictions

Date: Wednesday, August 25th, 2021
Source: Furniture Today

HO CHI MINH CITY — Upholstery manufacturer Manwah’s campaign to vaccinate workers at its multimillion-square-foot Ho Chi Minh City-area factory is one illustration of the immediate impact on furniture producers of a stay-at-home order the central government imposed this week in the face of rising COVID-19 cases spurred by the Delta variant.

In the past month, Manwah had obtained and administered COVID-19 vaccinations for close to 3,700 workers at the plant’s vaccine center. The company had hoped to add another 1,000 after a new supply of vaccines arrived over the weekend but ended up getting shots into just 100 arms. That was all the people Manwah could get to the plant after the more restrictive pandemic measures were announced. The company continues production and shipping but on a more limited basis than usual.

The order is the latest wrinkle in furniture’s supply chain and puts extra burden on area furniture manufacturers already struggling to keep product flowing in the face of a stressed transportation infrastructure on the ground and on ocean lanes.

Manwah has some 3,000 employees onsite in dorms at its HCMC-area factory, but it has around 8,000 total employees.

While it’s still producing and continues to ship from finished goods inventory, “it will take a couple of months to get back to the capacity we need,” Manwah USA CEO Guy Ray told Furniture Today. “We’re still producing and shipping, and we’re getting raw materials.”

In addition to the stay-at-home order effective Aug. 23, the government is deploying army troops to help police enforce the stricter measures. And on Tuesday, Ho Chi Minh City announced citywide COVID-19 testing for its 9 million people.

‘Live-in’ approach

Manufacturers with dormitories on their factory campuses housing workers hold an advantage right now assuming they have adequate raw materials to continue at least some production, even if they’re running at reduced staff levels.

Ashley CEO Todd Wanek said around 30% of its employees in Vietnam live on-site at its factories.

“The live-in policies for our factories are not changing,” he said in an e-mail. “We have thousands of people living in our factories and producing furniture. The only way to make it through this time is live-in.”

Along with workers living onsite, Manwah’s verticality pays off even more in the current situation. The company makes its own mechanisms and frames, components such as springs and zippers, and pours and cuts its own foam. Ray added that Manwah has 100 containers of wood on hand for frames.

Kuka Home’s HCMC-area plant, where 45% of workers had been vaccinated, is feeling the brunt of the stay-at-home order. Kuka also has two plants further north with on-site housing that remain in production, albeit at limited capacity due to travel restrictions.

“We assumed we’d be back up and running (in HCMC) the first week in September, but this has pushed that back,” said Matt Harrison, president of Kuka Home North America. “The other two factories in northern Vietnam are running at 30% capacity right now. With travel restrictions there, we still have the workers that stay at the factory.”

Another issue is complications with moving finished goods out of plants. Some sources report restrictions have slowed truck service to a trickle.

Harrison noted that Kuka is still shipping from southern Vietnam since it leased warehouse space at the ports,  which he said are congested but still operating.

“We’ve leased space to stock containers of finished goods, so we’re able to ship those containers out to service larger customers,” he said. “We’re still moving a lot of product.”

Harrison added Kuka, which has continued to vaccinate workers, remains in growth mode around HCMC.

“We’re still building another facility for dining and accent chairs that we expect to open the second quarter of next year,” he said.

With the lockdown in Vietnam, Manwah is bringing its Chinese production capacity to bear in order to maintain flow, producing some top-selling product that was being made in Vietnam in its China factory.

“We’re starting to ship (those goods) next week out of China to supplement the Vietnam situation,” Ray said.

Manwah also is working with ocean carriers to support shipments for customers running their own freight who no longer have contracts out of Chinese origin ports.


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