Vietnam's power blackouts hit multinationals' manufacturing hubs

Samsung centre building is seen in Hanoi

By Khanh Vu and Francesco Guarascio

HANOI (Reuters) - Vietnam's rolling power cuts have hit industrial parks in the country's northern provinces where top global manufacturers such as Foxconn and Samsung have factories, officials said on Monday, as a surge in consumption amid a heatwave stretched the power supply system.

The frequent and often unannounced power cuts prompted EuroCham, which represents European companies in the country, to send a letter on Monday to the industry and trade ministry urging quick measures to address the emergency.

Some industrial parks in the northern provinces of Bac Ninh and Bac Giang have been facing blackouts, said two local investment officials, declining to be named as they were not authorised to speak to media.

"We are working with EVN later today to discuss the situation and possible measures to limit the impacts," one of the officials said, referring to the country's state utility Electricity of Vietnam.

The provinces house production facilities of Samsung Electronics, Foxconn, Canon Inc and Luxshare, among others.

"Vietnam's industry ministry should take urgent measures before the country's reputation as a reliable global manufacturing hub is undermined," Jean-Jacques Bouflet, deputy chairman of EuroCham Vietnam told Reuters on Monday, adding that the power cuts seriously disrupted industrial activities.

State media reports cited EVN's northern unit as saying power to Canon's factory in Bac Ninh will be cut from 8:00 am local time on Monday until 5:00am on Tuesday, adding power to at least five industrial parks and several villages in the province will be partially or fully cut for several hours during the first days of this week.

It was not immediately clear if the other companies were affected. The companies and EVN did not immediately respond to requests for comment.

The blackouts threaten efforts to avert an economic slowdown due to weak demand in key export markets, after first-quarter growth slipped to 3.3% from 5.9% in the fourth quarter.

The country has been turning off street lights and manufacturers switching operations to off-peak hours to keep the national power system running, with more than 11,000 companies having agreed to cut consumption where possible.

Deputy Minister of Industry and Trade Do Thang Hai admitted at a government meeting over the weekend that there had been "power shortages for households and businesses at certain locations at certain time", adding that the difficulties would continue.

(Reporting by Khanh Vu and Francesco Guarascio; Editing by Sriraj Kalluvila)