COVID-19 to slash Samsung Vietnam’s 2020 export target by $5.8bn: trade ministry
COVID-19 to slash Samsung Vietnam’s 2020 export target by $5.8bn: trade ministry
Specifically, the South Korean company’s exports will likely fall by $5.8 billion to $45.5 billion, the trade ministry said in a report to Prime Minister Nguyen Xuan Phuc on assessment of COVID-19 impacts on key industries.
On a larger scale, the ministry said that Vietnam’s electronics industry will be greatly affected in the next quarters of 2020, with demand falling in the U.S. and the European Union due to the complicated developments of the pandemic.
According to the ministry, the U.S. and the EU respectively account for 17 percent and 24 percent of Vietnam’s smartphone exports, and 17 percent and 14 percent of the Southeast Asian country’s computer and electronic exports.
The U.S. and EU markets also together make up over 50 percent of Samsung Electronics Vietnam’s export value.
Globally, the world’s smartphone shipments for 2020 are projected to drop ten percent, or by 100 million units, Nikkei Asian Review cited U.S. research company Strategy Analytics in a March 18 report.
As a result, electronic manufacturing and assembly companies in Vietnam will have very few long-term orders and new orders in the near future, the Vietnam Electronic Industry Association (VEIA) assessed.
Likewise, two other key export sectors of Vietnam, textile-footwear and wood products, will also be affected.
Particularly, many large customers from the U.S. and Europe have asked Vietnamese textile and footwear enterprises to space out or delay deliveries while not signing new contracts.
It is expected that Vietnam’s number of textile and footwear orders for April and May will plunge by about 70 percent.
Similarly, customers from the U.S. and EU markets, which account for 58 percent of Vietnam’s wood and forestry exports, have temporarily rejected shipments while delaying payments of signed orders.
New orders will not be negotiated until the epidemic ends.
The Vietnam Timber and Forest Product Association warned that the situation will force Vietnamese wood industry enterprises to cut their production by 70 percent in the next two weeks and completely stop production in a month.
