Body blow for suppliers as Big C stops buying textile products in Việt Nam

July 04, 2019 - 14:08
Big C Vietnam has suspended local purchase of apparel but clarified it is only temporary and it does not plan to pull out of the garment business.


Representatives of garment and textile suppliers at Central Group Vietnam’s office after the Thai owner of Big C supermarket told them it was suspending purchases their products with immediate effect. — Photo

HCM CITY — Big C Vietnam has suspended local purchase of apparel but clarified it is only temporary and it does not plan to pull out of the garment business.

On July 2, Central Group, the owner of the Big C supermarket chain, sent a letter to Vietnamese vendors saying it plans to stop buying garments from this month “until further notice” to restructure the business.

“This temporary suspension of ordering is owing to a change in strategy of development of our soft-line concept in line with direction from Central Group in Thailand.”

The next day, many garment and textile suppliers visited its office in HCM City to protest.

They said Big C’s action would result in huge losses for them and affect thousands of workers.

Đỗ Thị Thùy Dung, director of Việt Impression JSC, which supplied garments for 13 years, told Sài Gòn Giải Phóng (Liberated Saigon) newspaper that Big C has proved with this surprise announcement it does not have goodwill towards its suppliers.

The supply contract was usually renewed by the two parties in February and July every year, but the company did not receive any notice from Big C until June 30, she said.

"We do not know what to tell our 100 workers or what to do with the large amount of goods, including ready-made products and fabrics made specifically for Big C, which are still in stock."

Phạm Xuân Hồng, chairman of the HCM City Association of Garment, Textile, Embroidery and Knitting, said Big C’s action without notifying in advance would definitely cause great losses to the suppliers.

Businesses should check if Big C acted in line with their contract, and sue it if it did not, he said.

At the meeting with suppliers, the company pledged to co-ordinate with them to come up with a solution within two weeks.

In a press release on Wednesday, Central Group said Big C Vietnam is developing new brands for its retail chain, including garment and textile department, and has a specific roadmap to achieve this.

Finding supply sources in Việt Nam is a top priority in this plan, it claimed.

Big C Vietnam is also reviewing its product portfolio and the feasibility of vendors supplying Vietnamese products of the highest quality.

“Big C Vietnam has more than 4,000 suppliers and is in the process of working with more than 200 garment suppliers to develop products of the best quality to serve not only the domestic market but also exports.

“The suspension of purchases of Vietnamese garment and textile products is temporary and Big C Vietnam affirms it is not stopping its garment and textile business operations in Việt Nam,” it said.

Nguyễn Huỳnh Trang, deputy director of the HCM City's Department of Industry and Trade, said Central Group has been asked for a report.

The department would seek complete information for textile companies and business groups to take appropriate measures to safeguard their rights, she said.

Central Group bought Big C from France’s Casino Group in 2016 at a cost of US$1.05 billion.

It also owns a large stake in electronics retail chain Nguyễn Kim. — VNS