UPDATE 1-Coronavirus to hit Vietnam's garment industry hard - association chairman

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HANOI, Feb 25 (Reuters) - Vietnamese garment makers will face a severe shortage of materials starting in the second quarter because the new coronavirus has disrupted their supply chains, the chairman of the Vietnam Textile and Apparel Association said on Tuesday.

Garments and textiles are Vietnam’s third-largest export earner, after smartphones and electronics. Garment makers in the Southeast Asian country rely heavily on materials from China, where the virus has killed more than 2,600 people.

“Domestic firms have sufficient materials for production until the end of the first quarter, but many of them will face severe shortage of materials from the second quarter because they have trouble importing materials from key suppliers in China, Japan and South Korea,” Vu Duc Giang told Reuters.

Giang said more than 50% of materials for the country’s garment industry are shipped from China.

“We don’t know yet to what extent the coronavirus will impact Vietnam’s garment output this year,” Giang in a phone conversation. “But we expect garment output in the first quarter to stay flat from a year earlier.”

Giang said several garment makers will have to cancel or delay deliveries of their products.

“We are trying to diversify our sources of materials to mitigate the impacts of the virus,” Giang said, adding that some companies are making more face masks and medical protective gear.

Vietnam’s garment and textile exports last year rose 7.8% to $32.85 billion, according to government’s customs data.

On Tuesday, Vietnam Ministry of Health said all of the 16 people confirmed infected with the coronavirus in the country had recovered. (Reporting by Khanh Vu; Editing by Muralikumar Anantharaman and Gerry Doyle)