Vietnam Promises Samsung to Support Supply Chain Maintenance... Steps Toward Normalizing Factory Operations

On the 14th, the Ministry of Industry and Trade of Vietnam held a video conference with representatives from Samsung Electronics Vietnam and other manufacturing companies. (Photo by Ministry of Industry and Trade of Vietnam)

[Asia Economy Reporter Jeong Hyunjin] Samsung Electronics' Vietnam factory, which faced production disruptions due to the impact of COVID-19, is increasing its operating rate based on support from the local government. Amid the global logistics crisis shaking supply chains worldwide, risks related to production lines appear to be partially resolved.

According to the Vietnam Ministry of Industry and Trade on the 17th, Do Tang Hai, Deputy Minister of Industry of Vietnam, held a video conference on the 14th with more than 20 suppliers located in Ho Chi Minh, Hanoi, Bac Giang, Bac Ninh, Binh Duong, Dong Nai, including Choi Juho, Vice President and Head of Samsung Electronics Vietnam Complex. He promised to provide maximum support to help these companies maintain their supply chains.

The Vietnamese government stated that its top priority is to help companies achieve 'two goals' simultaneously: ensuring safety during the COVID-19 situation and maintaining production to prevent supply chain disruptions. Deputy Minister Do Tang Hai emphasized that by updating new support policies and incentives, he will act as a bridge between companies and the government, and expressed expectations that Samsung Electronics will collaborate with the Ministry of Industry to create and implement larger and more focused training programs to expand the participation of Vietnamese companies in the global supply chain.

Vice President Choi, who attended the meeting, said that the stability of Samsung Electronics Vietnam and its suppliers plays a very important role in the global production network, expressing confidence that timely and proactive support will be provided by the Vietnam Ministry of Industry. He added that the difficulties faced by companies will quickly diminish, which will further strengthen companies' trust in the Vietnamese government.

Choi Ju-ho, Head of Samsung Electronics Vietnam Complex (Vice President, top left), is speaking during a video conference with the Vietnamese Ministry of Industry and Trade on the 14th. (Photo by Vietnamese Ministry of Industry and Trade)

At the meeting, manufacturers including Samsung Vietnam pointed out the difficulties they faced due to COVID-19. In response, the Vietnam Ministry of Industry instructed its affiliated agencies to promptly resolve these issues and stated that it will closely cooperate with local governments to create an environment where production can gradually increase.

Samsung Electronics' Ho Chi Minh home appliance factory is the company's largest production base for household appliances. Currently, about 7,000 employees produce appliances such as TVs, washing machines, refrigerators, vacuum cleaners, and monitors. In July, the factory partially suspended production lines after many employees tested positive for COVID-19. As the factory's operating rate dropped, the supply of TVs entering the domestic market significantly decreased, resulting in longer waiting times to receive products.

Bloomberg recently reported, citing a representative from the Saigon Hi-Tech Park (SHTP) in Ho Chi Minh, that Samsung Electronics' Ho Chi Minh production line is expected to be fully operational by the end of next month. The representative said that the operating rate of most production facilities in the park currently reaches 70%, and efforts are underway to help fully normalize factory operations starting next month. Many foreign companies, including Samsung Electronics and Intel, are located in this industrial park.