Production, investments hampered by riots in Vietnam

Industrial production in Vietnam is facing limitations after anti-China protests turned violent, leaving at least twenty people dead and numerous factories damaged, as per ChemOrbis. The protests were launched in response to a Chinese move to set up an oil rig near the Paracel Islands, sovereignty over which is disputed between China, Vietnam and Taiwan. Riots launched by workers in Binh Duong Province, one of the country’s main industrial areas, targeted factories and offices owned by Chinese companies, although factories owned by Taiwanese and South Korean companies were also damaged as protesters attacked buildings with Chinese characters on their signs. According to media reports, Formosa Plastics Group announced that it was suspending operations and investments in Vietnam after the company’s facilities were vandalized and looted during the riots. Formosa has invested a total of $11.5 billion in Vietnam and employs 3,000 people in the country. The company reportedly commented that it may reconsider future investments in the country, complaining that the authorities had not done enough to protect foreign investors. In February, media sources reported that Formosa was planning to invest US$500 mln in Vietnam’s Dong Nai Province, including plans to build a 200,000 tpa PS plant which would be the second PS plant in Vietnam. The country’s first PS producer, Vietnam Polystyrene, reportedly suspended operations at its 50,000 tpa PS plant, with sources close to the company commenting that they hoped to resume production next week. Sources added that the company has not finalized its plans to restart yet as the situation remains tense and there are reports that some foreign workers are beginning to flee the country. An agent of a Taiwanese producer commented, “Many factories have been damaged and operations at many facilities, including those owned by Vietnamese companies, have been suspended. More demonstrations are expected and we believe that it will take some time before the situation is resolved.” A trader based in Vietnam said that several of their customers have suspended their operations as a result of the riots and that their sales have fallen accordingly. According to ChemOrbis, another trader based in Vietnam stated, “The market has been badly affected by the recent events as many plants are shut and some foreign workers have left the country. We believe that foreign investments in Vietnam will be curtailed as a result of these incidents.” Meanwhile, a Southeast Asian producer said that they are planning to divert their cargoes away from Vietnam out of concerns that the situation there may escalate.