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Haitian, Formosa suspend Vietnam operations after anti-China rioting

By: Steve Toloken

May 16, 2014

UPDATED — Vietnamese factories of Formosa Plastics and injection press maker Haitian International Holdings both suspended operations last week, following widespread anti-Chinese rioting that included mob assaults on Formosa factories.

Two people died and more than 100 were injured in several days of rioting, Vietnam's government said May 17 in its first official accounting of the violence, according to The New York Times and other Western media.

There were widespread reports of riots involving thousands of people, with hundreds of arrests, and damage and fires at foreign-owned factories in the south and central parts of Vietnam. The violence began as protests connected to a maritime boundary and oil drilling dispute between the two countries.

Taiwan’s Formosa, which has several facilities in Vietnam, said in a May 14 statement that a mob of 300 people broke into a campus in Dong Nai province that produced biaxially oriented polypropylene and fibers, where they looted and caused other damage.

Formosa said in a May 15 statement that one person died from heat stroke during a riot on the afternoon of May 14 at a separate company facility, a steel manufacturing plant in Ha Tinh province, and 90 people were injured.

Adding to the confusion on the ground, Formosa said the Vietnamese rioters at the steel plant are actually employees of a Chinese contractor working on the site. It added that none of its Taiwanese or Vietnamese staff were attacked and that the mob left at about midnight, about two hours after the head of the Ha Tinh province arrived to help control the situation.

Haitian said in a May 16 statement that it stopped operations at its factory in Binh Duong, near Ho Chi Minh City, on May 14 out of concern for safety of its staff.

It said it had no reports of injury or deaths among its staff or any material damage to its factory, where the company builds injection molding machines.

Haitian, based in Ningbo, China, said the Binh Duong factory accounted for less than 1 percent of its total output in 2013, suggesting that any effect on the company’s overall business would be minimal.

Kaohsiung, Taiwan-based Formosa said managers at the Dong Nai facility called police at around 10:30 p.m. May 13, and the county chief arrived with his team, but they had little impact on stopping the mob from entering the industrial park. Rioters did not leave until about 4 a.m., so damage was still being assessed.

The company gave no reports of deaths or injuries, and a spokesman for the Nhon Trach Industrial Park also told Plastics News there were no reports of people being hurt or killed.

Formosa said it deeply regrets the incident and said the foreign-owned factories being targeted by rioters have no connection to the political dispute over maritime boundaries between China and Vietnam.

It said it also regrets the inability of the Vietnamese government to handle riots and protect foreign investment. The company said it believes foreign investors will have doubts about the security in Vietnam, and will step back on new investments. It urged Taiwan’s government to pressure Vietnam to adopt effective protection measures.

A report from Reuters news agency said that “the brunt [of the damage] appears to have been borne by Taiwanese companies in the zones … as rioters mistook the firms to be Chinese-owned.”

The New York Times quoted media in South Korea stating that 50 Korean companies also were damaged during the rioting. Reuters quoted a spokesman for exporter Li & Fung, which supplies toys, clothing and other consumer products to U.S. retailers, as saying some of its suppliers in Vietnam halted production as a precautionary measure.

The Dong Nai site is a large production base for Formosa.

The company has invested $1 billion there thus far, setting up yarn, polyester fiber and BOPP production, and it announced late last year it was spending another $500 million, including $100 million for a 200,000-metric-ton-per-year polystyrene factory.

Formosa is currently Vietnam’s largest foreign-invested company, according to an English language website of the Communist Party in Dong Nai.

A series of demonstrations escalated in Vietnam in recent days, after China moved an oil drilling rig into waters claimed by both countries. Coast guard vessels from the two nations used water cannons and tried ramming each other’s vessels to disrupt operations.

Press reports said foreign factories were also damaged at Singaporean-owned industrial parks in Vietnam.