The spread of the novel coronavirus (COVID-19) epidemic has served to rob millions of workers of their income, while numerous businesses throughout the country are struggling for survival or are facing up to the possibility of going bankrupt.

Discussing the harrowing economic developments with a VOV reporter, Nguyen Huu Thanh, Director of Eurolink Joint Stock Company, said that regrettably his company is no longer able to maintain production due to enduring a 80% drop in first quarter revenue, with revenue in March down 95%. With production halted it has hampered the target of achieving 120% revenue growth compared to 2019’s figures, with many firms in a similar situation facing bankruptcy.

For many years, Eurolink's production and business operations have been entirely dependent on the flow of import and export goods. In fact, the company usually imports materials every three months, with up to 80% of its materials being imported from Italy, one of the world's  worst hit by the COVID-19 in Europe. 

In addition to a shortage of raw materials, Eurolink is also facing the prospect of capital depletion, therefore increasing the possibly that the firm will be forced to completely halt operations by April 20.

With a total of 300 members of staff, up to 85% of employees operating across two industries, garments along with leather and footwear, have been cut, with only 15% of the labour force being maintained in order to conduct small orders domestically. Thanh added his hopes of the government's support packages serving to help his company deal with issues relating to the salaries of staff, insurance, union fees, and other matters until it is able to resume operations.

Moreover, many local garment and textile enterprises are encountering a similarly negative situation, with all of them being hit by the consequences of the raging epidemic. This has led to approximately 70% of businesses moving to cut their staffing in March, whilst 80% are poised to lay off personnel in April and May.

According to the Vietnam Textile & Apparel Association, after Chinese manufacturers  successfully restored roughly 80% of the supply of raw materials in March, the United States and Europe, two main markets which account for over 60% of the country’s total export turnover for textile and apparel products, experienced outbreaks of the epidemic. Consequently, local garment and textile enterprises have suffered major difficulties due to being unable to export their products.

The association has calculated that if the epidemic ends in June, the textile and garment industry will lose approximately VND12,000 billion, whilst the falling demand could lead to a price drop of more than 20%.

A recent survey conducted by the Private Economic Development Research Board of the Prime Minister's Administrative Procedures Advisory Council indicates that, if the epidemic drags out for six months, 74% of businesses surveyed could go bankrupt. Furthermore,  nearly 30% of enterprises will lose between 20% and 50% of their turnover, whilst 60% of firms will lose more than half of their turnover.

Regarding the export sector, the Ministry of Industry and Trade believes that if the disease continues in the short term, import and export growth between the country and the EU will be relatively low. However, if the epidemic continues into the middle of the year, the nation’s exports to the EU may decrease by between 6% and 8% in Q1 and Q2. 

A number of key products such as computers along with phones and their components are predicted to endure a sharp decline due to difficulties occurring in both supply and falling market demand.