Vietnam update: factories continue long slog towards full capacity levels

HO CHI MINH CITY – It’s been nearly two months now that Vietnam began the long and drawn-out process of reopening its factories post lockdown.

At the time, the industry was predicting that it would take until early next year before plants reach anywhere near close to full capacity.

A recent email Home News Now received from a sourcing expert on the ground in Vietnam confirms that prediction, adding that it probably won’t be until the summer of 2022 before plants get back to 100% of their normal operations.

The expert, who has asked not to be identified, said that of the 20 factories he works with directly, staffing levels are between 30%-70%, with the majority around 45%-50%. The wide spread, he noted, was due to location of each factory as well as pay incentives.

Workers at a furniture plant in the Ho Chi Minh City area of Vietnam produce decorative wood panels.

The email went on to note that positive Covid results from cyclical testing also is forcing some factories to require workers to quarantine for around two weeks. The percentage of quarantined workers, he added, varies significantly from factory to factory, with some plants suspending full operations due to a high number of workers testing positive.

Which makes the spread of 30% to 70% or an average of 45% to 50% sound not bad, especially to those looking from the outside in.

Yet sources have noted that having X percentage of workers does not translate into being able to produce at the same capacity. In most cases, plants are operating at much lower level since many workers coming into the plants are new and have to be trained before they achieve anywhere close to full productivity.

And obviously, when workers who test positive have to be quarantined, that further lowers overall productivity and capacity.

In addition, the source noted, Vietnam is experiencing what is known as “breakout” cases affecting workers that have received both doses of the vaccine.

However, there doesn’t appear to be the same urgency for a full region-wide lockdowns as before, which he noted is like due to the government’s reluctance to continue to cripple the economy further.

“In some ways, they are somewhat turning a “blind eye” in this effort,” the source wrote, adding that cyclical testing will still impact staffing and production on a weekly, if not daily basis, not just at furniture production plants, but also at subcontractors, transport companies and materials suppliers.

“Consequently, their schedules and performance are affected accordingly and without notice,” the source added.

The bottom line? Based on conversations with factory owners and management, the source said staffing levels won’t get much higher than they are now until after Tet, which takes place from Jan. 28 to Feb. 6.

Thus, those awaiting goods from Vietnam, wholesalers and retailers alike, including online resources, could be in for a long winter. The industry can only hope, especially with a new variant on the horizon, that things don’t get worse before they get better.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at and at 336-508-4616.

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