Gyeonggawon Activates Payment Linkage System... Also Supports Labor and Energy Costs

Gyeonggi-do Type Payment Price Linkage System Activation Support Project Guide Poster

The Gyeonggi-do Economic Science Promotion Agency is recruiting participating companies for the ‘Gyeonggi-do Type Delivery Payment Linkage System’ until the 30th of this month.

The Gyeonggi-do Type Delivery Payment Linkage System is a system that adjusts delivery payments in linkage with fluctuations when costs such as ‘material costs, labor costs, and expenses (electricity, gas)’?which account for more than 5% of the delivery payment?change beyond a certain range. The government mandates the application of the delivery payment linkage system when costs fluctuate by more than 10% of the delivery payment.

Last year, Gyeonggi-do was the first local government nationwide to start a support project for the delivery payment linkage system.

This year, to alleviate the energy cost burden on participating companies, the linkage targets have been expanded from raw materials to include labor costs and expenses (electricity, gas). These are items with a high proportion in the manufacturing costs of root industries such as heat treatment and mold making, and this measure proactively reflects the continuous requests from small and medium-sized enterprises to include them in the linkage system.

Additionally, not only consignment (ordering) companies but also consigned (delivering) companies participating in the linkage system whose delivery payments have decreased will be selected as excellent companies and awarded additional points. Furthermore, the number of excellent companies selected has been expanded from the previous 10 companies to 20 companies.

The recruitment target is consignment companies that have signed a special delivery payment linkage agreement with at least one small or medium-sized enterprise (consigned company) within the province.

Consignment and consigned companies selected as excellent companies will be awarded the Governor’s Commendation at an awards ceremony at the end of October, and will receive interest rate benefits and additional points for applying to corporate support projects in next year’s program. Excellent consignment companies will be provided with up to 30 million KRW in sales support funds, which can be used according to the company’s preference in areas such as marketing, commercialization, workplace improvement, and corporate social responsibility (CSR).

A Gyeonggi-do official stated, "By proactively providing projects tailored to the realities of companies, such as expanding linkage targets to energy costs, we will contribute to stabilizing the delivery supply chain."