Supply chains in Southeast Asia are racing to recover to full strength after months of factory stoppages and production cuts, including Viet Nam which is seeing a rapid return to normality, according to an article published on Japan’s Nikkei newspaper.

Illustrative image (Photo: VCCI)

The article reported that about 200 factories in the country contracted to make sportswear for Nike have resumed operations.

An executive of an industrial park in Ho Chi Minh City was quoted as saying that plants operated by Samsung Electronics and Intel will "provide assistance so that both companies' facilities will return to full production this month”.

Companies that produce electrical and electronic components essential for the auto industry are also returning to full strength, much to the relief of manufacturers around the globe.

Japan's Furukawa Electric expects to return to full capacity at its Vietnamese plants. Its three factories there make wire harnesses for automobiles, with the Ho Chi Minh City site alone staffed with about 8,000 workers.

The impact from the COVID restrictions has been particularly damaging to Southeast Asia's automotive industry. Viet Nam has a high concentration of wire harness factories, while Malaysia is a production hub for automotive semiconductors.

Viet Nam was the source of about 40 percent of Japan's wire harness imports in 2019. Suppliers Yazaki and Sumitomo Electric Industries are restoring production at their Vietnamese plants as well. This trend is expected to support a production comeback in Japan's auto sector, said the article.