Gyeonggi Province to Offer Consulting on Supply Price Indexation System for Food Manufacturers

The Gyeonggi Provincial Government and the Gyeonggi Institute of Economics and Science are recruiting food manufacturing companies within the province to participate in the "Consulting Support Project for the Supply Price Indexation System" until June 26.

The supply price indexation system is a scheme in which, at the time of entering into a supply contract between a principal and a supplier, both parties prearrange the criteria and methods for reflecting key cost fluctuations—such as raw material and labor costs—in the supply price.

Amid rising cost burdens for the manufacturing sector due to recent geopolitical instability and surging raw material prices, this system is gaining attention as a way to promote the management stability of small and medium-sized suppliers and to strengthen the foundation for fair trade.

This project is particularly meaningful in that it offers tailored support specifically for the food manufacturing sector. Since food manufacturing is directly affected by fluctuations in international grain prices, oil prices, and various raw material costs, establishing a system for adjusting supply prices is directly linked to corporate competitiveness.

The Gyeonggi Provincial Government has established a support system centered on professional consulting to enable participating companies to effectively implement and operate the indexation system in the field.

Gyeonggi Provincial Government

The main areas of support include ▲ analysis and verification of the proportion of key raw materials ▲ customized indexation agreement consulting for each company ▲ advice on contract execution and operation ▲ regional information sessions and practical training. Companies can receive one-stop support for the entire process, from understanding the system to applying it in actual contracts.

Incentives will also be provided to companies that operate the indexation system effectively. The Gyeonggi Provincial Government plans to select 15 outstanding companies and offer a total of 17 benefits, including a citation from the Governor of Gyeonggi Province, preferential interest rates, deferment of tax audits, and additional points for various SME support programs.

In addition, five outstanding principal companies will receive a total of 20 million won in market development support funds. Each company can receive up to 10 million won, which is expected to help spread the system and foster a culture of mutual growth and cooperation.

Seo Bongja, Director of the Fair Economy Division of the Gyeonggi Provincial Government, stated, "The food manufacturing industry is particularly sensitive to fluctuations in raw material prices, resulting in a significant burden on small and medium-sized businesses. We hope this project will not only ease cost burdens for companies but also provide practical help in establishing a fair and sustainable culture in supply transactions."

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