LG to Make Early Payments of 980 Billion Won to Partners Up to 14 Days Ahead of Chuseok

LG Affiliates Roll Out Various Social Contribution Activities
Topped the Fair Trade Commission's "Subcontract Payment Inspection" Last Year

On September 18, LG announced that, ahead of the Chuseok holiday, it will make early payments to its partner companies and engage in social contribution activities such as distributing daily necessities in an effort to promote mutual growth.

LG Group Headquarters in Yeouido, Seoul. Photo by Kang Jinhyung

Eight LG affiliates-including LG Electronics, LG Innotek, LG Chem, LG Energy Solution, LG Household & Health Care, LG Uplus, LG CNS, and D&O-have decided to pay their partner companies' supply payments up to 14 days in advance for the Chuseok holiday. The total amount of these payments is 980 billion won. This move is expected to help partner companies manage their finances, especially as demand for funds temporarily increases before the holiday due to payments for raw materials and bonuses for employees.

Previously, during the Lunar New Year holiday, LG also advanced 1.5 trillion won in supply payments to help small and medium-sized partners maintain smooth cash flow.

In addition to early payment of supply fees, LG affiliates operate financial support programs totaling approximately 1.2 trillion won, such as mutual growth funds and direct loans, enabling partners to secure funding through interest-free or low-interest loans.

LG Electronics operates a 300 billion won mutual growth fund in partnership with commercial banks using deposits and contributions, providing low-interest loans to partners in need of business funds. For partners investing in new and automated facilities, LG Electronics offers 40 billion won annually in interest-free funding to help them enhance manufacturing competitiveness. LG Innotek operates mutual growth and support funds and financial support programs totaling 140 billion won, LG Chem 200 billion won, and LG CNS 47 billion won, helping partners secure funding and transition to more sustainable business structures.

LG is also actively utilizing the mutual payment system to ensure partners can access necessary funds in a timely manner and stabilize their operations. The mutual payment system guarantees cash payment to partners on the due date, and allows them to receive early cash payment before the settlement date at low financial costs equivalent to those available to large corporations. Last year, 10 LG affiliates paid primary partners through this system, accounting for 8.7% of the total mutual payment amount disbursed in Korea.

According to the Fair Trade Commission's announcement of the "2024 Second Half Subcontract Payment Terms Disclosure Inspection Results," LG paid 81.2% of its subcontract payments within 10 days, ranking first among 88 corporate groups that disclosed their subcontract payment terms for the proportion paid within 10 days.

LG affiliates are also participating in activities to share warmth with local communities by delivering daily necessities and other goods to neighbors in need.

LG Display is supporting low-income families living near its plants in Paju, Gyeonggi Province, and Gumi, North Gyeongsang Province, and is conducting various volunteer activities at welfare facilities with which it has established partnerships. LG Chem is delivering daily necessities to neighbors living near its plants in Yeosu, Daesan, and Cheongju. To mark Chuseok, LG HelloVision is running the "Sharing from the Heart Package" initiative to support local small business owners and vulnerable groups. These packages, which include local specialties and daily necessities sold by local small business owners, will be distributed to people with disabilities, the elderly living alone, multicultural families, and young people preparing for independence through community welfare organizations.