Samsung Electronics Provides Interest-Free Loans to Partner Companies Facing Financial Difficulties Due to 'Isolated Production' in Vietnam

[Asia Economy Reporter Kim Hyewon] #. In July, when the A company’s Vietnam branch supplying smartphone covers to Samsung Electronics was preparing for the production of strategic smartphones in the second half of the year, it had to implement 'quarantine production' due to the spread of COVID-19. At that time, many employees could not come to work due to local lockdowns, and those who could come had to live and work inside the facility. Due to restrictions on personnel movement, the operating rate dropped so much that production volume reached less than half of the plan, and parts supply from partner companies was also disrupted. As PCR testing costs for employees increased, the management situation rapidly deteriorated. In this crisis, A company found a breakthrough to resolve the crisis by quickly establishing a quarantine production system with Samsung Electronics’ support. Samsung Electronics negotiated with Bac Ninh and Bac Giang provinces to allow partner companies to use nearby schools as temporary accommodations and supported the repair of essential facilities such as electricity and water. A shuttle bus was also provided to facilitate commuting between the temporary accommodations and the workplace. The operating rate of A company’s facility gradually increased, and management stabilized. The head of A company’s Vietnam branch said, “Samsung Electronics’ emergency financial support was a great help in overcoming the financial difficulties caused by COVID-19 and quarantine production.”

This is a case where Samsung Electronics supported the production and management stabilization of local partner companies in Vietnam facing difficulties due to the spread of COVID-19. On the 5th, Samsung Electronics announced that despite the severe COVID-19 situation in Vietnam, it is operating an emergency production system and providing interest-free loans totaling about 220 billion KRW to more than 120 partner companies that overcame difficulties together.

So far, about 80 partner companies have applied. Among them, about 50 companies have received support totaling about 100 billion KRW. Financial support for the remaining 30 partner companies will also be carried out sequentially.

Interest-Free Loan Support for Vietnam-Based Partners Facing Management Difficulties Due to Prolonged COVID-19

The areas near Hanoi and Ho Chi Minh, where Samsung Electronics’ partner companies are located, experienced emergency situations with entire regions or industrial complexes locked down from May to September due to the spread of COVID-19.

The local governments restricted all residents’ movements, including commuting, and controlled business activities. Companies that needed to operate for production and export were allowed to conduct limited production under a quarantine production system, provided they established temporary accommodation and dining facilities inside or near the workplace and implemented thorough quarantine measures.

To continue production, Samsung Electronics’ branches and partner companies urgently prepared temporary accommodations not only in existing dormitories but also in on-site training facilities and nearby schools. Securing accommodation space using cots and tents was a challenge, but costs for urgently preparing bedding, laundry rooms, restrooms, showers, and cafeterias, as well as mandatory and repeated PCR testing for all working personnel and purchasing various quarantine supplies, continuously increased operating funds.

Samsung Electronics recognized that Vietnam partner companies, whose management conditions worsened due to the prolonged COVID-19 situation and quarantine production operations, faced growing difficulties. After actively reviewing ways to support partner companies that maintained the global supply chain through emergency production, Samsung Electronics decided to provide interest-free loans.

Coexistence with Partners to Overcome COVID-19... Support for Shuttle Buses, Air Conditioner Installation, Diagnostic Kit Purchases, etc.

In addition to the interest-free loan support, Samsung Electronics carried out various support activities to help Vietnam-based partner companies overcome COVID-19. In cooperation with the central and local governments of Vietnam, Samsung Electronics helped partner company employees receive priority vaccination and supported partner companies in quickly securing accommodations in nearby schools to conduct quarantine production.

Furthermore, Samsung Electronics provided shuttle bus operations between external accommodations and partner companies, installed air conditioners in accommodations, purchased rapid COVID-19 diagnostic kits for working personnel, and supplied bedding and daily necessities to enable stable production activities by partner companies.

A Samsung Electronics official said, “We will continue to provide support in areas that are practically needed to resolve difficulties faced by our partner companies.”