SME Products Public Procurement '113.4 Trillion'... Top Buyer is 'LH'

Public Institutions' SME Product Purchase Target Set at 113.4 Trillion KRW, Up 10 Trillion from Previous Year
Highest Since System Implementation... Purchase Amount Exceeds 100 Trillion KRW for Second Consecutive Year
Top Performer in Purchase Record is 'LH' with 6.37 Trillion KRW Last Year

[Asia Economy Reporter Lee Junhyung] The total target amount for exclusive public procurement of small and medium-sized enterprise (SME) products by 849 public institutions, including central administrative agencies, local governments, and public enterprises, is expected to reach 113.4 trillion KRW this year. This amount, which is 10 trillion KRW higher than last year's 103.4 trillion KRW, marks the highest level since the SME product purchase target system was implemented in 2006.

The Ministry of SMEs and Startups announced on the 27th that the "2021 SME Product Public Purchase Target Plan" was reviewed and approved at the Cabinet meeting.

The SME product purchase target system is a policy that legally mandates a certain purchase ratio of ▲SME products ▲technology development products ▲women-owned business products ▲disabled-owned business products ▲startup business products in public procurement markets where public funds are invested, to support SMEs in securing sales channels. Currently, the statutory mandatory purchase ratio for SME products is set at 50% or more of the total purchase amount.

This year, 849 public institutions will purchase SME products, an increase of 11 institutions from 838 last year. The number of institutions that failed to meet the statutory mandatory purchase ratio decreased by nearly half, from 17 last year to 9 this year.

The target amount and actual performance of SME product purchases are on the rise. The purchase target amount increased from 89.9 trillion KRW in 2018 to 93.8 trillion KRW in 2019, and 103.4 trillion KRW last year. Actual purchase performance rose from 94 trillion KRW in 2018 to 105 trillion KRW in 2019, and 116.3 trillion KRW last year. Additionally, the ratio of SME product purchase performance to the total public procurement amount last year was 79.8%, exceeding the original target of 77.6%.

The public institution with the highest SME product purchase performance last year was the Korea Land and Housing Corporation (LH). LH purchased SME products worth 6.37 trillion KRW last year. It was followed by Korea Electric Power Corporation (approximately 5.68 trillion KRW), the Ministry of National Defense (approximately 4 trillion KRW), and Korea Expressway Corporation (approximately 3.3 trillion KRW).

This year, the purchase target amounts for major SME product categories are expected to exceed the statutory ratios. The target for technology development products increased by about 900 billion KRW from last year's plan of 4.9 trillion KRW to 5.8 trillion KRW. Women-owned business products account for 10.5 trillion KRW, which is 7.2% of the total purchase plan of 145.4 trillion KRW, and startup business products account for 11.7 trillion KRW, or 8.1%.

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