Samsung is expanding its cooperation efforts to include first to third-tier partners. The company plans to improve payment conditions and provide a total of 3.5 trillion won in financial support to assist partners with facility investments, technology development, and ESG transitions.
According to industry sources, Samsung held a signing ceremony for the "Samsung-1st, 2nd, and 3rd Tier Partner Cooperation Agreement" at its Digital City in Suwon on June 29. The event was attended by over 150 participants, including Fair Trade Commission Chairman Joo Byeong-ki and representatives from Samsung affiliates and partner companies.
The agreement includes major Samsung affiliates such as Samsung Electronics, Samsung Display, Samsung SDI, Samsung Electro-Mechanics, Samsung SDS, Samsung Heavy Industries, Samsung E&A, Samsung C&T, Hotel Shilla, Cheil Worldwide, and Semes. Approximately 6,700 partners within Samsung's supply chain are expected to benefit from this agreement.
A key focus is to extend the benefits of cooperation beyond first-tier partners to second and third-tier partners. Samsung will maintain a principle of payment within 10 days after the deadline for first-tier partners and will continue cash payments and payments based on a cooperative payment system. Second and third-tier partners will also have reasonable payment deadlines for their subcontractors.
Samsung plans to offer incentives such as evaluation points, upgraded ratings, and expanded support from the cooperation fund to partners who participate in improving payment conditions. Additionally, the company is working on a plan to proactively reflect changes in labor costs, which are not legally linked, in payments.
Industry insiders believe that if payment periods are shortened and labor and energy costs are linked for small and medium-sized partners facing increased cost burdens, it will significantly improve cash flow.
The scale of financial support will also be expanded. Samsung will operate a cooperation fund and an ESG fund totaling 3.5 trillion won to support partners with facility investments, technology development, and environmental and safety improvements. Samsung Electronics will provide low-interest loans to first to third-tier partners through a 2.2 trillion won fund and offer interest-free support for ESG initiatives to first-tier partners.
Samsung plans to incorporate the contents of this agreement into a fair trade agreement to be signed with partners early next year. The Fair Trade Commission intends to provide incentives such as evaluation points for companies that faithfully implement the agreement.
Chairman Joo Byeong-ki stated, "Through this cooperation agreement, Samsung's efforts for mutual growth will lead to the mutual growth of our partners, marking the beginning of a healthy corporate ecosystem."
* This article has been translated by AI.
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