Next Month's Pilot Implementation of Delivery Payment Linkage System... Samsung, LG, etc. "Final Review for Participation Underway"

[Asia Economy Reporter Park Sun-mi] Ahead of the pilot operation of the delivery price linkage system scheduled for next month, major conglomerates such as Samsung, LG Electronics, Hyundai Motor Company, and POSCO are conducting final review work to participate.

According to the industry on the 27th, major conglomerates that participated in the delivery price linkage system task force (TF) team, including Samsung, LG Electronics, Hyundai Motor Company, Kia, POSCO, and SK Hynix, have settled on participation and are conducting final preparations to submit applications for the pilot operation. Since 'autonomy' is granted within the pilot operation framework, large companies believe there is no significant burden in participating and expect to submit applications within the deadline. The Ministry of SMEs and Startups initially planned to accept applications for companies wishing to participate in the delivery price linkage system pilot operation until this afternoon but extended the application deadline by one week until the 2nd of next month.

The delivery price linkage system is a system that reflects the increase in raw material prices in the delivery unit price in transactions between primary contractors and subcontractors. The Ministry of SMEs and Startups plans to select about 30 companies through applications from interested companies and start the pilot operation of the system from next month.

Major conglomerates recognize the need to reduce the burden of rising raw material prices on subcontractors from the perspective of win-win cooperation with small and medium-sized enterprises, but they do not expect noticeable changes from the pilot operation alone. A representative from a major conglomerate said, "Many large companies that have expressed their intention to participate in the pilot operation have already established mechanisms to reduce the burden of rising raw material prices on subcontractors," adding, "No significant changes are expected immediately."

Since 2003, POSCO has independently operated a delivery price adjustment system and linkage system for 22 items at about 30% of annual material purchases as part of win-win cooperation with small and medium-sized enterprises. Samsung and LG Electronics also adjust delivery prices when the raw material price burden on subcontractors is high, or they directly purchase raw materials and sell them to subcontractors, using a paid supply method that reflects price fluctuations in the unit price.

Some have expressed concerns about the pilot introduction leading to legislative efforts. It is difficult to uniformly set standards and scope for major raw materials that can be applied and raw material price criteria, and side effects from legally controlling market price functions are expected to arise, meaning large companies cannot be free from responsibility for legislation. Another burden is that large companies are currently facing profitability concerns due to overlapping burdens of rising raw material and logistics costs amid a consumption downturn.

An industry official said, "If the details discovered during the pilot operation are not properly revised and legislation is pushed forward, there could be situations where large companies face reverse discrimination," adding, "Since regulation of prices, which are the core of the market economy, is being considered, a cautious approach is necessary."

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