Local firms reel from second COVID-19 wave

The return of COVID-19 has disrupted local businesses' plans adjusted after the pandemic’s initial impacts.
August 04, 2020 | 10:02
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A woman works at Hanoi-based Garment 10 Jsc (Garco 10). Photo: VnExpress

Many firms have been caught off guard by the sudden spike in new COVID-19 cases, disrupting plans adjusted after the pandemic’s initial impacts, VnExpress reported.

Garment factory owner Trang has a headache on her hands. She began calling workers back to work two months ago and started seeing orders picking up again in early July when Vietnam weathered the first wave of the novel coronavirus outbreak. But after the first community case was detected in Da Nang on July 25, many customers called early this week to cancel orders that she’d expected to deliver in mid-August.

The number of new orders from across many provinces and cities also began to drop. "I was trying to minimize losses from the first semi-lockdown earlier this year, and now this... everything stands still," the owner of the garment factory in Hanoi's Long Bien District said.

Her greatest worry now was that all the capital she’d spent on fabric that has recently arrived will now be stuck in inventory. Trang said she was considering a plan to find sewing companies to make cloth masks once again.

Trang is one of many local entrepreneurs that have seen their plans upended even as they were recovering from the first disruptions caused by the COVID-19 pandemic.

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Construction firms have also been hit by COVID-19. Photo: Vietnamnet

Tien Nam, deputy director of a construction enterprise in Hanoi sighed after being on the phone for nearly half an hour with the investor of a construction project in Da Nang.

"We have agreed to postpone the construction date from early August because the outbreak is strong there. This is a difficult decision for both sides but there is no other way," he said.

This is the second time that Nam's construction project in Da Nang has been delayed by the pandemic, the first postponement happening in March. Nam is worried and does not know when the project can be kick-started again.

"The machinery was transported to Da Nang a week ago and engineers and workers were mobilized. But now everything has been postponed indefinitely," he said.

At the beginning of the year, the company was forced to cut its staff by half and reduce salaries of the remaining, including managerial cadre by 30-50 percent. The second wave of COVID-19 infections has him wondering: "What will the future be?"

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Garment-textile is one of the sectors most affected by COVID-19. Photo: Vneconomy

Enterprises in sectors other than manufacturing have also been hit hard by the second COVID-19 wave.

The pandemic returned to the community on July 25 after more than three months. Since then the country has reported 174 domestic infections, including 120 cases in Da Nang. Six COVID-19 patients had died since Friday, including three on Sunday alone.

Luu Huynh, representative of an event management company in Ho Chi Minh City (HCMC), said customers had just canceled five events scheduled for August and this number would increase sharply if the outbreak escalates.

The last event to be canceled was a customer's conference specializing in electrical equipment to be held in Da Nang for which payment had been made for all air tickets and guest expenses. The company had already spent its own money to cover 50% of the event's construction costs, but the customer just canceled the event, giving no specific time when it can be reorganized.

Dinh Trong Thinh, a professor at the Academy of Finance in Hanoi, said: "If the second COVID-19 wave develops complicatedly, the economy could go into a state of turmoil. Then businesses, especially small and medium-sized enterprises with limited capital will not make it," he said.

Nearly 30,000 businesses suspend operations, 30 mln workers affected by COVID-19

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Photo: VOV

Up to 29,200 businesses in Vietnam registered to temporarily suspend operations in the first half of this year, up 38.2 percent year-on-year, according to General Statistics Office.

The number of newly established enterprises in Vietnam during the period fell 7.3 percent to 62,000 with a combined registered capital of VND 697.1 trillion (USD 30.07 billion), down 19 percent.

The GSO says a survey on business sentiment in the manufacturing and processing sectors in the second quarter of 2020 found 27.3 percent of enterprises experiencing improvements in business performance compared to the previous quarter while 40.8 percent faced difficulties and 31.9 percent said their business remained stable.

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A worker manufactures face masks at a factory in Hanoi. Photo: VnExpress

Meanwhile, some 30.8 million people aged over 15 in Vietnam have been left reeling by the coronavirus pandemic, with 897,500 losing their jobs.

The office reported that the service sector was the hardest hit, with 72 percent of the employees affected, followed by industry and construction with 67.8 percent and agro-forestry-fishery with 25.1 percent.

Jobs were lost in all sectors, especially processing and manufacturing, lodging and catering services, education and training, retail sales, and auto and motorbike repair services./.

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