Large Corporations Support Partners Affected by COVID-19

Samsung Provides 2.6 Trillion Won to Component Supply Crisis Companies
Hyundai and LG Also Support with Early Payment and Goods Assistance

[Asia Economy Reporter Dongwoo Lee] Major domestic conglomerates such as Samsung Electronics and Hyundai Motor Company have stepped up to support partner companies struggling due to the spread of the novel coronavirus infection (Wuhan pneumonia). As the impact of the new coronavirus spreads to domestic partner companies with factories in China, these conglomerates are practicing win-win management centered on large corporations in response to the crisis.

According to the business community on the 10th, Samsung Group will urgently provide a total of 2.6 trillion won in funds to stabilize the management of partner companies facing difficulties in procuring parts due to the suspension of operations at factories in China. This includes partner companies of major affiliates such as Samsung Electronics, Samsung Display, Samsung Electro-Mechanics, Samsung SDI, Samsung SDS, and Samsung C&T.

Samsung Group will first support 1 trillion won in operating funds linked to win-win programs such as the Win-Win Fund and Water Supply Support Fund through interest-free and low-interest loans. In particular, Samsung Electronics has separately decided to cover actual logistics costs if partner companies switch to air delivery for urgent material supply. This involves sharing logistics company and customs clearance information and developing and proposing alternative and bypass routes beyond existing logistics. If partner companies diversify their sources for raw and subsidiary materials to procure parts, Samsung will shorten the parts approval time and procedures and provide consulting for this purpose.

Earlier, Hyundai Motor Group also launched an emergency fund support of 1 trillion won for automobile parts partner companies. Hyundai Motor Group will provide interest-free management funds amounting to 308 billion won to about 350 partner companies and will make early payments of 587 billion won in delivery payments and 105 billion won in parts mass production investment costs. The group plans to increase the support effect by encouraging first-tier partners to advance payments to second- and third-tier partners.

Direct aid is also continuing in regions affected by the novel coronavirus in China.

LG Group’s affiliates conducting business in China, including LG Electronics, LG Chem, LG Display, LG Household & Health Care, and LG Hausys, jointly provided 3 million yuan (about 510 million won) in cash, 1.2 million masks, and 10,000 protective suits. Additionally, they supported hospital flooring materials covering 6,000㎡ (approximately 1,815 pyeong) and are reportedly reviewing additional support plans through local Chinese governments.

LS Group is also considering providing supplies such as masks and sanitizers to regions including Wuxi and Dalian, where affiliates like LS Industrial Systems and LS Cable & System have business sites in China. Doosan Infracore is sponsoring donations and supplies to the Wuhan area through the Yantai government in Shandong Province, where it has a business site, and has strengthened monitoring of its business sites.