Vietnam's export hub factories may face weeks of disruption after Typhoon Yagi

Kyocera

11/09/2024 05:25

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      Yagi disrupts infrastructure, power supply
    

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      LG Electronics, Jinko Solar among companies hit
    

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      Many expect to resume some activity soon, others need
longer 
    

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      Flooding hits goods ready for export to US, EU
    

  
    By Francesco Guarascio, Phuong Nguyen and Khanh Vu
       HANOI, Sept 11 (Reuters) - Typhoon Yagi severely damaged
a large number of factories and flooded warehouses in northern
Vietnam's export-oriented industrial hubs, forcing plants to
shut, with some expected to take weeks to resume full
operations, executives said.
    The typhoon, the strongest in Asia this year, made landfall
in Vietnam's northern coast on Saturday and was still causing
deadly floods and landslides on Wednesday killing dozens and
ravaging key infrastructure, including power networks and roads.
    The disruptions could affect global supply chains as Vietnam
hosts large operations of multinationals that mostly export
their products to the United States, Europe and other developed
countries.
    In the coastal city of Haiphong, one of the areas worst hit
by the typhoon, 95% of businesses were expected to resume some
activities on Tuesday, the body managing Haiphong industrial
zones said on its website.
    "Many businesses had their roofs blown off, some walls were
torn and collapsed, gates, fences, signs, camera systems,
garages and sliding metal doors were overturned, water flooded
into factories," a report on its website said.
    In the DEEP C industrial zones, which host factories in
Haiphong and the neighbouring province of Quang Ninh, 20 out of
150 investors' plants will be out of service for at least a few
weeks, said Bruno Jaspaert, head of DEEP C industrial zones.
    Based on a review of his clients, he expected power
consumption at those facilities would remain one-third below
normal for weeks or months because many companies were busy
rebuilding their damaged factories. 
    Among the hardest hit at that industrial park was Jupiter
Logistics, which is part of a group co-owned by Japan Airlines
Co Ltd  9201.T , according to one official familiar with the
survey of the damage.
    Jupiter Logistics was not immediately available to comment.
    Goods ready for export or delivery to clients were flooded
in warehouses in the area, companies said.
    In another industrial park in Haiphong, South Korea's LG
Electronics  066570.KS  said it had partly resumed work on
Tuesday, although the factory's walls were crushed on Saturday
and a warehouse with refrigerators and washing machines had been
flooded. 
    "Many of them are gone with the wind," said Calvin Nguyen,
head of Vietnamese logistics firm WeDo Forwarding Co., referring
to products that were to be delivered to the United States and
the European Union, without specifying which goods.
    The company's three warehouses in Haiphong had their roofs
blown off and were still flooded on Wednesday, he said. 
    The industry ministry did not reply to a request for
comment.
    
    POWER CUTS
    Power outages were still affecting several areas in the
north, as Vietnam's state-owned power distributor EVN worked to
restore dozens of damaged electricity lines.
    In Quang Ninh, along the coast north of Haiphong, many
factories still had no electricity or water service, Jaspaert
said.
    Chinese solar panel maker Jinko Solar's  688223.SS  factory
in Quang Ninh was severely damaged, one of its workers said,
noting on Tuesday work had not resumed as windows had been
smashed and the roof had been blown away.
    Jinko was not immediately available for a comment.
    Far from the coast, the industrial hubs of Thai Nguyen and
Bac Giang which host large factories of multinationals such as
Samsung Electronics  005930.KS  and Apple  AAPL.O  supplier
Foxconn  005930.KS  were also facing severe flooding. 
    Samsung's large facilities in Thai Nguyen had not been
visibly affected on Tuesday evening, according to a Reuters
witness.
    Water was receding on Wednesday in the province, about 60 km
(37 miles) north of Hanoi, but more rain was expected. 
   

 (Reporting by Francesco Guarascio, Phuong Nguyen and Khanh Vu
in Hanoi; Minh Nguyen and Thinh Nguyen in Thai Nguyen;
additional reporting by Heekyong Yang in Seoul; Editing by
Sonali Paul)
 ((Francesco.Guarascio@thomsonreuters.com;))