Local sales of export-only products lead to losses for manufacturers

By Le Tuyet   May 15, 2024 | 11:09 pm PT
Local sales of export-only products lead to losses for manufacturers
An employee of Nobland Vietnam works in a factory in Ho Chi Minh City. Photo by VnExpress/Le Tuyet
Factories producing goods for export are suffering losses due to workers illicitly selling them locally in breach of agreements with international customers.

In Ho Chi Minh City, clothing manufacturer S.H. Vina once discovered that products it made solely for the U.S. market were being sold locally.

The customer found the shirts being sold in a local mall and canceled the order, severely denting S.H. Vina's finances and reputation, according to its production manager, Vo Minh Hung.

The company was never able to identify the guilty parties.

ST Saigon in Thu Duc City faced issues when a photo of a teddy bear it was producing appeared online before it reached store shelves.

Quynh Nguyen, a human resource manager at the firm said: "Everyone entering and leaving the factory is thoroughly examined. How did the teddy bear get out?"

The company hired investigators, who discovered that an employee had taken the photo.

She took parts of the bear over several days and assembled them together as a gift for her daughter and took a photo of it.

"It was a major issue that we had to deal with," Quynh said, adding that the company had to explain to its customer to avoid the penalty for violating contract terms.

A pay increase the employee was scheduled to get was canceled.

Nobland Vietnam, a South Korean garment company in District 12, recently lost 3,000 shirts and had to pay VND70 million (US$2,750) to buy them back from local stores.

The company could not find the thieves and decided to deduct the money from the salaries of over 100 employees in charge of finishing products.

But the workers would have none of it and complained to authorities, and the company had to revoke the fine, which was illegal.

Nguyen Thanh Do, head of the legal and policy department at the HCMC Union Labor Confederation, said many factories have lost products and some have complained to the police for a formal investigation.

S.H. Vina once lost tens of thousands of shirts and reported to the police, who found that company employees had disabled the GPS trackers on trucks and drove them to a secret location to steal the products en route to the airport, he said.

The company then had to fix the maximum time a truck driver had to reach the airport, he added.

Footwear maker Pouyuen Vietnam, a supplier to global giants Nike and Adidas, once lost hundreds of pairs of shoes.

A police investigation found that company drivers and security guards had colluded to steal the products, Kim Vinh Cuong, deputy chairman of its labor union, said.

The company then installed more cameras and made changes to security guards’ shifts to prevent thefts, he added.

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