Samsung 2 Trillion KRW · SK 649.5 Billion KRW... Large Corporations Pay Partner Companies Early Ahead of Chuseok

Hyundai Motor Group KRW 1.8524 Trillion · LG Group KRW 950 Billion
POSCO Group to Pay Delivery Fees Daily Until the 8th

Samsung Electronics Vice Chairman Lee Jae-yong is visiting the Suwon plant in Gyeonggi-do on the 26th of last month, inspecting strategic products to be launched next year. Photo by Samsung Electronics

[Asia Economy Reporter Choi Seoyoon] Ahead of Chuseok, large corporations are practicing win-win management by paying delivery fees to their partner companies early. This is intended to help partner companies that experience a temporary surge in operating fund demand around the holiday due to employee bonuses and raw material payments.

According to the business community on the 3rd, Samsung decided to pay 2.1 trillion KRW in goods payments to partner companies up to ten days earlier. This year's early payment amount is 1.3 trillion KRW more than last year's Chuseok (800 billion KRW). Thousands of partner companies supplying goods to Samsung Electronics, Samsung Display, Samsung Electro-Mechanics, Samsung SDI, Samsung SDS, Samsung C&T, and others are the targets.

A Samsung official explained, "The early payment of goods fees is in line with Vice Chairman Lee Jae-yong's win-win vision of 'sharing together and growing together,' and is part of efforts to create a win-win industrial ecosystem with domestic small and medium enterprises."

SK will also pay 649.5 billion KRW in goods fees to partner companies before Chuseok. Ten affiliates, including SK Hynix (450 billion KRW), SK Telecom (132 billion KRW), SK Siltron (37.7 billion KRW), SK E&S (10.5 billion KRW), SK C&C (8 billion KRW), and SK Specialty (7.7 billion KRW), participated. Payments will be made on average 10 days earlier to partner companies. SK will bear the interest costs.

Chairman Chey Tae-won of SK Group attended the closing session of the 'Icheon Forum 2022' on the 25th of last month, discussing ways to strengthen ESG management with employees. Photo by SK

Hyundai Motor Group will also pay 1.8524 trillion KRW in delivery fees up to 13 days earlier than the original payment date. In particular, first-tier partner companies will be encouraged to pay delivery fees to second- and third-tier partner companies before Chuseok to spread the effect of early payments. A Hyundai Motor Group official said, "We will make efforts so that this fund is distributed evenly to second- and third-tier partner companies, allowing them to have a warm holiday amid difficult situations such as global inflation."

LG Group decided to pay 950 billion KRW early to partner companies trading with eight major LG Group affiliates, including LG Electronics, LG Display, LG Chem, and LG Energy Solution. LG Group also paid 1.3 trillion KRW in delivery fees to small and medium partner companies earlier than scheduled during last Lunar New Year. An LG official said, "We will continue win-win activities that help partner companies, such as early payment of delivery fees and expansion of the win-win payment system."

POSCO Group also plans to pay 550 billion KRW in delivery fees early. POSCO, which used to make payments on Tuesdays and Thursdays every week, will make payments daily from the 1st to the 8th. The cooperation work fees of partner companies, which are settled monthly, will also be paid daily during the same period based on settlement performance.