LG Electronics Expands Win-Win Cooperation Fund to Third-Tier Partners This Year

[Asia Economy Reporter Ki-min Lee] LG Electronics is expanding the Win-Win Cooperation Fund to third-tier suppliers in order to strengthen the foundation for mutual growth with its partners.

On the 19th, LG Electronics announced that it will expand the scope of support for the Win-Win Cooperation Fund, which had been operated for first- and second-tier suppliers, to include third-tier suppliers starting this year.

Since 2010, LG Electronics has been operating a Win-Win Cooperation Fund worth 200 billion KRW in collaboration with Industrial Bank of Korea, Korea Development Bank, and others. Suppliers can use this fund to obtain low-interest loans when they need financing.

Until last year, only first- and second-tier suppliers who had signed a fair trade agreement with LG Electronics were eligible for support, but from this year, third-tier suppliers can also apply for loans from the Win-Win Cooperation Fund when they need funds. In particular, LG Electronics plans to prioritize support for suppliers facing difficulties due to the COVID-19 pandemic when they apply for loans.

As a result, the number of suppliers eligible to use the Win-Win Cooperation Fund has increased by more than 20% compared to last year, reaching about 1,000 companies. The support limit is 1 billion KRW for first-tier suppliers and 500 million KRW for second- and third-tier suppliers. Members of the "Cooperation Association," formed by suppliers for close exchange and mutual development, can apply for up to 2 billion KRW.

LG Electronics expects that expanding the scope of the Win-Win Cooperation Fund will not only help suppliers facing difficulties but also build a healthy ecosystem for mutual growth.

LG Electronics will provide 40 billion KRW in interest-free funds next month, one month earlier than last year. These interest-free funds will be used to improve suppliers' productivity through automation solution implementation, upgrading aging facilities, and developing new technologies.

Additionally, LG Electronics operates a Win-Win Payment System that allows first-, second-, and third-tier suppliers to receive early cash payments based on the credit of the large corporation on the payment due date, thereby securing liquidity.

The amount paid by LG Electronics' first-tier suppliers to second-tier suppliers through the Win-Win Payment System was approximately 530 billion KRW last year, the largest scale among domestic companies.

LG Electronics provides various support for win-win cooperation, such as ▲developing parts applying new technologies and new methods ▲consulting for manufacturing innovation ▲free training, to help suppliers incorporate diverse innovative technologies into their overall management.

Lee Si-yong, Executive Vice President of LG Electronics' Purchasing and SCM Management Center, emphasized, “We are actively seeking various ways to support suppliers facing difficulties and grow together. We will strive to ensure that various support activities for win-win cooperation extend not only to first-tier suppliers but also to second- and third-tier suppliers.”

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