5 October 2021
The chief executive of Macau-based leather manufacturing group ISA TanTec, Uwe Hutzler, has spoken of the recent challenges the group, like countless other manufacturers in Asia, has faced in recent weeks because of Covid-19 and power shortages, reports Leatherbiz.
Founder and Executive Chairman of ISA TanTec at a ceremony to celebrate the group’s expansion in Vietnam.
In the most recent edition of ISA TanTec’s regular newsletter, Mr Hutzler spoke frankly about the challenges the group is facing at the moment in Vietnam. Strict lockdowns because of outbreaks of covid-19 in Vietnam have led to factory closures.
Sports footwear group Nike recently told the Wall Street Journal that these production disruptions in Vietnam, where the Oregon-based brand now makes around half of its shoes, had cost it ten weeks of production, which might mean as many as 100 million pairs of shoes, since July.
Uwe Hutzler said ISA TanTec’s two facilities in Vietnam have, inevitably, been caught up in this. He explained that the management team at the older of its two tanneries there, Saigon TanTec, had gone through “countless procedures” to be able to re-open. He said 185 people had been allowed into the tannery and would eat, sleep and work there while the restrictions continue. He said the tannery was now in a position to “resume work at a lower-capacity level”.
Production at the second of the group’s tanneries in Vietnam, TransAsia TanTec, began in 2020. A group of workers there had been operating there on an eat-sleep-work basis for 12 weeks already. Mr Hutzler paid tribute to the team there and said an additional 36 people were currently in quarantine, outside the tannery, waiting to come back to work. He said this was “a good sign”.
Big brands such as Nike began producing its shoes in Vietnam when production in China became too expensive. However, in its comments to the Wall Street Journal, Nike said it had decided now to transfer some production back to China.
ISA TanTec also has a tannery in China, but life has not been easy there either, according to the chief executive. In China, the main problem manufacturing companies face is a lack of power. Mr Hutzler said power shortages have led to manufacturers in many regions being “forced to shut down for three to five days per week”. He confirmed that ISA TanTec is also impacted by this, but did not say to what extent.
According to the BBC, China’s power stations have cut back on their operating hours because of the high price of coal. It said the government in Beijing was already taking measures to reduce the country’s reliance on coal, but that the country still relies on coal for more than half of its power.