Taiwanese businesses in Vietnam shut down amidst anti-China riots

A Vietnamese protester holds a banner in a rally against Beijing's deployment of an oil rig in the contested waters of the South China Sea, outside th

Due to conflict between China and Vietnam over South China Sea oilfields, Vietnamese demonstrators held protests in Binh Duong province’s foreign business dominated Vietnam Singapore Industrial Park on May 13 and may move towards Ho Chi Minh City and Dong Nai province.

News of numerous factories suffering attacks surfaced in Binh Duong, Vietnam as insecurity rose among Taiwanese businessmen. The Teco Group (1504) has a motor factory in Dong Nai, Vietnam. Teco Group chairman Theodore Huang indicated that Teco’s Vietnamese factory will shut down for one day Wednesday to ensure employee safety. Currently, no damages have been reported and whether the shutdown continues will depend on unfolding events.

Tatung (2371) stated that Vietmanese protesters destroyed offices and equipment at two of its Vietnamese subsidiaries Tuesday afternoon but relevant primary production equipment and important assets were not damaged. These two subsidiaries will shut down for three days. The company concluded that this incident will have a short-term impact but does not significantly affect the company’s primary production equipment, finances, and operations.

Taiwan has been Vietnam’s biggest investor in the last 20 years. Vietnam also has the second largest population of overseas Taiwanese businesses behind China including steel, textiles, and technology companies. After rioting was reported in Vietnam, companies including Formosa Chemicals & Fibre Corporation (1326), Far Eastern New Century Corporation (1402), and Eclat Textile Co., Ltd. (1476) have currently decided to give employees time off or temporarily shut down and will extend down shifts as necessary.

Tire manufacturers Cheng Shin Rubber Ind. Co., Ltd. (2105) and Kenda Rubber Industrial Co., Ltd. (2106) stated, even though rioting has been temporally calmed, both companies will temporarily shut down to ensure employee safety. Cheng Shin will continue to monitor developments to institute relevant workarounds. Kenda indicated that it has 1.5-2 months worth of inventory to cope with the current situation and can flexibly schedule capacity at its Shenzhen and Taiwan plants to meet customer needs.

The food industry, including Ve Wong Corporation (1203), Great Wall Ent. (1210), Uni-President Enterprises Corp. (1216), and AGV Products Corp. (1217), has plants in Vietnam. Currently, Uni-President’s Vietnamese plant has been invaded and harassed by rioters and has shut down. The other companies are conducting normal operations. Uni-President stated, employees have been dispersed and Taiwanese managers are not in danger. Uni-President is Vietnam’s largest aquatic feed manufacturer and currently has five factory campuses locally. One campus in Binh Duong province’s Song Than Industrial Park has approximately 1,000 employees, 95% local and 5% Taiwanese.

Ve Wong, whose Vietnamese factories account for 19% of its revenue, announced that anti-China riots in Binh Duong province do not impact current company finances or sales. AGV Products’ factory is in North Vietnam and is also unaffected.