Lotte Construction to Pay 100% Cash for Subcontracting Fees to Outsourcing Partners for Win-Win Growth

[Asia Economy Reporter Choi Dong-hyun] Lotte Construction announced on the 12th that it has been paying subcontracting fees in cash to all external partner companies since the 10th.

Lotte Construction started paying in cash to excellent partners in 2018 and has been increasing the cash payment ratio every year. Last year, the amount paid to external partners using the 'Corporate Purchase Card' was approximately 780 billion KRW, and it is estimated that paying in cash from this year will incur an annual interest cost of over 4 billion KRW.

A Lotte Construction official said, "Paying fees in cash is a support measure that partners can immediately feel the effect of," adding, "We made this decision to help partners secure liquidity amid difficulties caused by the novel coronavirus infection (COVID-19)."

Meanwhile, since 2011, Lotte Construction has held a fair trade agreement ceremony with partners every year to create opportunities for developing win-win growth plans. In particular, last year, through management improvement consulting, it helped strengthen the capabilities of 20 partner companies, and through the operation of the Win-Win Growth Academy, it supported education to enhance the understanding of the Construction Industry Basic Act and the Subcontracting Act for 309 partner company practitioners.

Additionally, Lotte Construction supports partners financially to help them discover new business opportunities. It operates an interest-free loan fund of about 5 billion KRW as direct support to provide short-term operating funds to partners. Furthermore, through deposits at Industrial Bank of Korea, it has established and operates a total of 54 billion KRW in a win-win fund. This program uses interest from Lotte’s contributions to automatically reduce loan interest rates for small and medium-sized partners trading with affiliates. It supports loan interest rate reductions at the industry’s highest level, ranging from 1 to 2.4 percentage points.

This content was produced with the assistance of AI translation services.