Vietnamese officials have called on Apple Inc supplier Foxconn Technology Group (富士康科技集團) to voluntarily reduce power use by 30 percent at its assembly plants in the north of the nation where there were electricity outages last year, two people familiar with the matter said.
The request for energy-saving measures, which two other industry sources said was sent to multiple manufacturers, is precautionary and aimed at averting a repeat of last summer, when power shortages led to more than US$1 billion in lost output.
The request to Foxconn — known as Hon Hai Precision Industry Co (鴻海精密) in Taiwan — was “an encouragement,” not a requirement and has not had any impact on production, one of the people said.
Photo: Ritchie B. Tongo, EPA-EFE
Vietnam is increasingly welcoming multinational companies, some spreading their risk from traditional manufacturing base China amid rising trade tensions with the US.
The Southeast Asian nation relies on foreign investment for economic growth and has been trying to attract energy-intensive industries, such as semiconductor manufacturing.
However, a heat wave in May and June last year triggered power shortages that interrupted business in the north, causing US$1.4 billion in losses, or 0.3 percent of GDP, World Bank preliminary estimates showed.
Vietnamese Prime Minister Pham Minh Chinh in March pledged to foreign investors that power shortages would not happen again.
The government has asked coal-fired power plants to delay maintenance to meet higher electricity demand in the hottest months, one of the people said.
Foxconn is the world’s largest contract electronics manufacturer. It has half a dozen plants in northern Vietnam, including in Bac Giang Province where local authorities said it assembles Apple Inc’s MacBooks and iPads.
State-owned provincial power distributor Bac Giang Power Co in March said that it had asked industrial parks and authorities “to coordinate in implementing electricity savings,” according to a statement posted on the Web site of the Electricity Regulatory Authority of Vietnam.
Vietnam’s weather conditions are less challenging this year than last year, but authorities have boosted imports of coal and encouraged energy-saving to avoid shortages.
Energy-saving measures appear to differ nationwide. An official at an industrial park in another northern province said manufacturers have been asked to reduce power consumption on some days this month.
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