Daewon Chemical Vina Company Limited (Vietnam)

The subject specializes in producing synthetic PU leather as input material for other manufacturers (glove, shoe, air puff, household furniture…). In addition, the company provides solutions for wastewater treatment, thanks to its investment in DMS wastewater treatment system.In 4th outbreak of Covid-19 pandemic in 2021, the subject applied “three on the spot” solutions at factory site to maintain production. Since final months of 2022, the company has faced a shortage of orders due to the impact of the world economic recession. To maintain a stable production workforce, the company applies a rotating leave policy. The company's board of directors is looking for reasonable policies to overcome the current difficult period. In latest interview, the business operation has been more stable.According to the Vietnam Leather, Footwear and Handbag Association, the decline in export orders occurred in all enterprises of this industry, not excluding any units. The average volume of goods has decreased by about 30% compared to the beginning of the year. Specifically, the export turnover of leather and footwear in Sep 2022 was only USD 2 billion while in Aug 2022, it reached USD 2.6 billion. The decline in orders to the fourth quarter of 2022 is more severe and may continue until mid-2023. The reason is that high inflation caused purchasing power in major markets such as the US and EU to plunge, causing partners to have large inventories and unable to place new orders. These are the two main export markets, accounting for more than 70% of the export turnover of Vietnam's leather and footwear industry. Therefore, although some small markets can still be maintained, they still cannot make up for the shortfall. In addition, the most difficult thing is to worry about the operation of enterprises. Many large domestic enterprises such as Footgearmex Footwear Co., Ltd; Vietnam Samho Co., Ltd; Pouyuen Vietnam Company Limited,… have cut workers, no overtime, Saturday off... in the context of a sharp drop in orders.