laconceria – 4 May 2023
Taking jobs away from Vietnam to give it to India. It seems to be the strategy of Pou Chen Corp, the largest global manufacturer of sporting shoes, which decided to cut 6,000 jobs from a Vietnam-based production site (in photo) and invest 280 million USD to build a new plant in India. The goal: to hire 20,000 people in the next 12 months. One year ago, Hong Fu Group had also planned to invest for a similar operation to that of Pou Chen.
Pou Chen lays off 6,000 people in Vietnam
It’s clear that Pou Chen’s supply chain follows a flexible model on the basis of convenience. During the years it reduced the quota produced in China to move it to Vietnam. In Ho Chi Minh City the company has a production site that employs 50,000 people. Yet, Reuters writes that the Taiwanese giant plans on cutting 3,000 people and not renew an additional 3,000 contracts by the end of 2023, mainly due to weak demand. It’s worth remembering that Adidas had, last November, opened an investigation in Pou Chen’s Myanmar plant, as 29 union members were fired after protesting.
20,000 in India
Other than these cuts, the company is investing in India. High Glory Footwear India, local controlled entity of Pou Chen, has decided to pour 280 million USD into the country to open a new production site in the Tamil Nadu state. The production site will employ 20,000 people within the next 12 months. “Let’s hope this is the first of many investments to come (in India)”, said vice-president George Liu (source Fibre2Fashion). Another Taiwanese shoes’ producer, Hong Fu Group signed a contract last year to invest 130 million USD to create a plant in Tamil Nadu. The site should host around 20,000 workers.