LG Household & Health Care Raises Payments by 2.6 Billion Won for 15 Partners Hit by Middle East War

The Ministry of SMEs and Startups announced on April 14 that it visited LG Household & Health Care to commend the company for overcoming the crisis caused by the Middle East war through mutual cooperation and encouraged the spread of such practices to other companies and industries.

Hansung-sook, Minister of the Ministry of SMEs and Startups, visited Jeonju Nambu Market in Jeonju, Jeonbuk, on the 11th and gave an encouraging speech during a meeting with young merchants. Ministry of SMEs and Startups

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LG Household & Health Care has increased payments for a total of 59 contracts with 15 partner companies affected by the Middle East war, amounting to approximately 2.6 billion won so far. Starting in April, the company also plans to raise payments for up to 16,000 contracts with 47 partner companies sequentially, with a maximum increase of 20 billion won by the end of the year. The company is working to ease the burden on its partners by quickly raising payments even for contracts not subject to the price linkage system.

On this day, Minister Hansung Sook expressed gratitude to LG Household & Health Care employees and partner company representatives, saying, "Systems are only the minimum safety net; genuine mutual cooperation begins with consideration and trust."

In addition, the Korea Food Industry Association stated that it will strive to expand mutually beneficial models like that of LG Household & Health Care throughout the entire food industry. The association also urged the Ministry of SMEs and Startups to provide sincere attention and practical support measures for small and medium-sized enterprises in the food sector.

During the subsequent meeting, partner company representatives shared the challenges they face on the ground due to instability in the global supply chain. The representative of partner company A requested a more active role from the Ministry of SMEs and Startups, noting, "Although the price linkage system has been introduced, small and medium-sized companies still find it difficult to make their voices heard due to a lack of bargaining power."

The representative of partner company B said, "With raw material prices rising by the day, we would have had to consider halting operations if the principal company had not made a prompt decision to adjust payments," and expressed hope that mutually beneficial practices like those of LG Household & Health Care would spread throughout the industry.

Minister Han stated, "The mutually beneficial activities demonstrated by LG Household & Health Care are a valuable asset that enhances the resilience of our economy," and added, "Based on the feedback received here today, the Ministry of SMEs and Startups will rapidly promote the expansion of the price linkage system in the field and implement policies to overcome the Middle East war crisis."

The Ministry plans to promote the spread of such mutually beneficial cases as LG Household & Health Care by offering incentives such as reflecting these efforts in the Shared Growth Index, granting awards for outstanding companies that implement the price linkage system, and exempting regular status surveys for principal-subcontractor relationships.

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