Li & Fung says factories of some suppliers in Vietnam damaged in protestsReprints
(Reuters) — Global exporter Li & Fung , based in Hong Kong, said the factory facilities of some suppliers in Vietnam had been damaged during anti-China protests and that the disruption caused would mainly affect clients in the United States.
"Each day, it is quite volatile in Vietnam. Most factories are closed so that workers are not at risk," Li & Fung Chief Executive Bruce Rockowitz said at the company's annual general meeting in Hong Kong on Thursday.
Thousands of Vietnamese set fire to foreign factories in industrial zones in the south of the country to protest against Chinese oil drilling in a part of the South China Sea claimed by Vietnam, officials said on Wednesday.
Vietnam accounted for 7% of sourcing last year at Li & Fung, which supplies retailers like Kohl's Corp. and Wal-Mart Stores Inc. with clothing, toys and other products.
Chairman William Fung said he was concerned about the situation in Vietnam and was still assessing the damage. The impact so far was limited, he said.
Scores of factories in industrial zones in the south of Vietnam have halted production, rattling investors who are worried about the impact on companies' profits. Li & Fung bucked the trend among companies with exposure to Vietnam, with its stock up more than 1 percent, beating a 0.4% gain for the benchmark index.
Shares of shoemaker Kingmaker Footwear Holdings Ltd. and fabric maker Texhong Textile Group slid more than 6% on Thursday after they said production in Vietnam had been suspended.
Fittec International Group Ltd., which makes printed circuit boards and electronic components, tumbled more than 10 percent after it said its factory in Vietnam had been torched and looted. It said it was too early to estimate the cost of the damage.
Shares of other Hong Kong-listed companies with facilities in Vietnam also fell, with motorcycle maker Vietnam Manufacturing and Export Processing (Holdings) down more than 4%.
Shoemaker Yue Yuen Industrial Holdings Ltd., maker of footwear for companies such as Nike Inc and Adidas, eased 0.2%, extending a 5% drop on Wednesday after it said it too had halted production in Vietnam.
Vietnam accounts for about a third of Yue Yuen's global production capacity, which amounted to 313 million pairs of shoes last year.