[2020 Asia Construction Awards] Daelim Construction Establishes Win-Win Growth Fund to Support Partner Companies' Financing

Minister of Land, Infrastructure and Transport Commendation in the Win-Win Cooperation (Financial Support) Sector

Jonamchang, CEO of Daelim Construction

[Asia Economy Reporter Onyu Lim] Daelim Construction, which received the Minister of Land, Infrastructure and Transport Commendation in the Win-Win Cooperation (Financial Support) category at this year's Asia Construction Comprehensive Awards, is a company launched in July through the merger of the former Samho and Goryeo Development. The company has taken the lead in establishing a culture of growing together with partner companies, including creating a 7 billion KRW Win-Win Growth Fund in 2018. In particular, Daelim Construction is actively expanding not only corporate competitiveness through the merger but also the establishment of a fair trade culture, financial support for partner companies, and bidding opportunities.

First, to promote mutual growth with partner companies, Daelim Construction established a 7 billion KRW Win-Win Growth Fund in 2018 in collaboration with financial institutions. Partner companies can receive preferential loan interest rates of up to 1.3% through this fund. As of December last year, a total of 100 partner companies benefited from this.

Daelim Construction has also significantly improved payment terms. Since May 2018, the payment date for subcontracting fees to partner companies has been advanced to the 14th of each month, the earliest among companies, and during holidays when cash demand is high, payments are executed about a week earlier than the agreed date to practically alleviate the financial difficulties of partner companies.

Payments to partner companies are made in cash and cash equivalents through B2B Plus (accounts receivable secured loans without repayment claims), continuously increasing the proportion of cash payments. To ensure that progress payments made to first-tier partner companies are properly passed on to second- and third-tier partners, a payment settlement system has been introduced and applied at all sites since 2015. Since last year, the company's share of stamp duty on electronic subcontract contracts has been increased from the original 50% to 70%, reducing the burden on partner companies.

Daelim Construction has also established an institutional foundation for profit sharing with partner companies. It offers partner companies opportunities for management participation and seeks mutual growth by soliciting cost reduction ideas to improve productivity and cost competitiveness. When ideas are adopted, 50% of the performance gains are shared, and up to 30 bonus points are awarded during partner company evaluations.

The company is also committed to establishing a fair trade culture. Since being selected as a company subject to the Fair Trade Agreement Implementation Evaluation in 2018, Daelim Construction has signed fair trade agreements with 100 partner companies annually. By strictly adhering to the four major guidelines of the Fair Trade Commission, Daelim Construction prohibits acts that undermine fair trade order, such as verbal orders, failure to provide written orders, unfair order cancellations, prohibiting transactions with other companies, unfair reductions in construction payments, payment in kind, disclosure of cost data, and the outflow of professional personnel. Additionally, it operates guidelines on standard subcontract contracts, prohibitions on unfair special clauses and double contracts, retaliation bans, and confidentiality obligations.

Daelim Construction has also introduced a resource bidding system to prevent subjective opinions of ordering managers from interfering in competitive bidding and to enhance the utilization of excellent partner companies. This system is evaluated to have secured transparency in bidding. Furthermore, Daelim Construction signed an agreement with Gimpo City, Gyeonggi Province, in 2018 to revitalize local businesses, executing contracts worth approximately 16.3 billion KRW with companies in the Gimpo area, thereby contributing to the revitalization of the local economy.

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