Adidas Expands Footwear and Apparel Production in Vietnam

This move is a response to rising wages in China and the need for new low-wage workforces to produce their products. The COVID-19 pandemic and trade tensions between China and the US have further accelerated the trend towards diversifying supply chains.

As of July 2022, Adidas has 51 primary suppliers in Vietnam, employing over 190,000 workers. The factories are mainly located in southern Vietnam in the manufacturing hubs of Ho Chi Minh City, Binh Duong, and Dong Nai.

These locations were selected due to Vietnam's vast port system, particularly the Cai Mep-Thi Vai Port, which allows for low-cost shipping and a relatively high-skilled workforce in the garment and textile industry.

Adidas' partnership with Vietnam has been mutually beneficial, with the company benefiting from lower costs and the country from foreign direct investment inflows. This trend is expected to continue, as the Prime Minister of Vietnam and the head of Adidas recently discussed the company's expansion plans in the country.

Adidas produces footwear, apparel, and accessories in Vietnam. In 2022, the company had 7 factories producing accessories with 15,552 workers, 24 factories producing apparel with 63,513 workers, and 21 factories producing footwear with 114,233 workers. As the official sponsor of the 2022 World Cup, Adidas also listed several key suppliers in Vietnam among the factories producing sports equipment, apparel, and footwear.

Vietnam offers a promising opportunity for sportswear companies looking to establish a manufacturing presence, with a vast port system, low-cost shipping, and a skilled workforce. The Adidas-Vietnam partnership serves as a testament to the benefits Vietnam can offer and the potential for future growth in the garment and textile sector.

Source: Vietnam-Briefing