Orders plummeted, Vietnam factory facing more than a month of work shut down!

Not long ago, Today's Home reported that Lane Home Furnishing Shut Down and laid off all of its Employees. , arouses strong concern in the industry. In particular, friends working in the furniture industry in Vietnam expressed great regret over the closure of the factory and expressed concerns about the market for a period of time to come.

the S&P Global Vietnam Manufacturing Index hit a 13-month low in October. The recent market observation shows that during the Spring Festival this year, Vietnam factory will face extended shutdown news, almost confirmed!

"Despite an expected improvement in new orders and fewer shutdowns due to the pandemic, manufacturers remain optimistic about rising production over the coming year, but the lack of confidence is evident amid concerns about signs of weakening demand," said Andrew Harker, director of economics at S&P.

For now, many furniture makers in Vietnam are choosing to hibernate, waiting for the market to recover. In a survey of local factories in Vietnam, about 70 per cent said orders would continue to fall until the end of the year.

Do Xuan Lap, chairman of the Vietnam Furniture Association, said: "Enterprises are facing great pressure, such as loan interest from banks, input raw material costs, labor, export and transportation costs. "It will be very difficult for Vietnam to achieve its current export target of $16.5 billion by 2022."

Several furniture importers told Home Today that the factories they procured would be closed for an extended period, with the holiday beginning on Jan 22. The exact length of the shutdown is uncertain, but some believe it could last longer than a month.

"Our main plant was closed for about 10 days and, of course, our operations are manageable." "Said Hanna Hajjar, vice president of operations and supply chain at BDI, a furniture importer.

"But we are concerned about some of their sub-suppliers, which are expected to be closed for a longer period. We are monitoring the situation closely with the help of our agents. At this point, due to some forward planning, we do not expect any significant delays. We expect to launch the new bedroom range in mid-Q2 2023, as promised."

Martin Furniture is supplied by a number of Vietnamese factories, making the situation harder to track.

"We work with a dozen different plants, each of which operates independently," said Pat Hayes, its vice president of imports. I am currently collecting their plant closure plans. The stronger plants still seem to be extending their closures by two weeks, and others are talking about closing for the whole of January into the first week of February, depending on how many orders they get before December."

Hayes wasn't worried. As long as the situation is planned, it shouldn't have much impact.

"As we work closely with the factory according to the production schedule, the closure has no impact on us," he said. We have been considering their proposed closure plan and have increased our order book to cover the downtime next year."

Legends Furniture, which runs parallel to both import and domestic manufacturing, said the plant would close much earlier than usual and last until the end of the Lunar New Year holiday. Tim Donk, vice-president of sales, said: "All six of our plants will be closed in the last week of December. They don't have many new orders at the moment, and some of them are booked after the Spring Festival. Too much inventory and weak business. We don't need to worry. We have two new products planned, but they won't be available until April. We have enough existing stocks and the domestic factories are working well."

Christian Rohrbach, president of A-Americad, A solid wood importer, also confirmed the extended closure. "We heard that factories would be closed during the Spring Festival, usually for one or two weeks, and now orders are down, so they want to extend the closure," he said.

Like Hayes and Dunk, Robach isn't too worried: "It's not going to have a huge impact, and as long as you expect it, it's not too bad. It would have been worse if it had happened last year when inventories were falling. Fortunately, most companies in the furniture industry have plenty of inventory. Of course, it's still a negative effect."

Several other importers told ToDayHome that they had heard about the extended closure but were not confident enough to offer. There seems to be consensus that downtime will increase, although it is less certain for how long.

Some Vietnamese business publications have warned against the situation. An article in the Vietnamese daily VnExpress, "Western Orders Fall, Factories Face a Cold Winter," notes that factories are preparing for the worst as orders in the U.S. and Europe plummet. One plant has laid off more than 1,100 workers.