May 14, 2014 / 8:22 AM / 5 years ago

UPDATE 1-Shoe maker Yue Yuen suspends Vietnam production amid protests; shares slide

(Adds quotes, share price)

HONG KONG, May 14 (Reuters) - Yue Yuen Industrial Holdings Ltd, maker of footwear for companies such as Nike Inc and Adidas, suspended production in Vietnam on Wednesday amid anti-China protests over a disputed area in the South China Sea.

Thousands of Vietnamese set fire to factories and stormed industrial zones in the south of the country, with Taiwanese companies bearing the brunt of the damage, to protest against Chinese oil drilling in a part of the sea claimed by Hanoi.

Yue Yuen, a $4.7 billion company controlled by Taiwan-listed Pou Chen Corp, told Reuters it was unclear if production would resume on Thursday. It added there had been no damage to factory facilities and its workers were safe.

“With respect to Vietnam, we have told workers to take a day off today and the operations are closed today for the entire country,” said Jerry Shum, head of investor relations at Yue Yuen in Hong Kong.

He added that the disruption on Wednesday would not have any significant impact on the business.

Vietnam accounts for about a third of Yue Yuen’s global production capacity, which amounted to 313 million pairs of shoes last year.

Shares of Yue Yuen slid nearly 5 percent in Hong Kong trade to their lowest since November last year, lagging a 1 percent gain for the benchmark Hang Seng Index. Pou Chen’s stock was up 0.8 percent in Taiwan.

The suspension is the latest blow to Yue Yuen after thousands of workers went on strike last month at a complex in China to demand better social benefits. They returned to work at the end of April after the company agreed to meet some of their core demands. ($1 = 7.7517 Hong Kong Dollars) (Reporting by Donny Kwok and Rachel Lee; Editing by Anne Marie Roantree and Miral Fahmy)

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