State-run natural gas developer Korea Gas Corp. said it will further boost its efforts for achieving mutual growth with its contractors and other philanthropic activities, the firm said.

KOGAS’ service was recognized last year when it was made Fortune Magazine’s list of the World’s Most Admired Companies. The firm ranked the fourth in the energy firm category.

It received good marks for its excellence in human resources management, corporate social responsibility, long-term investment and global competitiveness.

It became the sole Korean state-run firm included in the prestigious list and ranked second among Korean firms following POSCO, the country’s largest steelmaker.

The firm attributed the result to its devotion to serving diverse stakeholders and seeking sustainable growth in line with the United Nations Global Compact. The 2007 U.N. compact is a strategic policy initiative for businesses committed to aligning their operations with principles in the areas of human rights, labor, environment and anti-corruption.

“We have been pursuing sustainable business since we became a member of the U.N. Global Compact in 2007,” a KOGAS official said. “We will keep stepping up our efforts to elevate KOGAS’ brand value in the future as well.”

The firm has, in particular, been increasing its contributions to mutual growth between large and smaller firms in recent years, KOGAS said.

President Lee Myung-bak has been spearheading the campaign for shared growth between large and small businesses as a key part of his agenda.

Lee has been urging regulators to forge a better business environment for smaller suppliers, even launching a committee devoted to co-prosperity between large and small firms last year.

In line with this effort, KOGAS created a new team in charge of supporting their small and medium-sized suppliers in November, it said. The firm has also been trying to assist small and medium-sized contractors’ businesses through diverse measures over the past few years, it said.

It has been carrying out research and development projects with smaller firms to localize development of parts, sharing technologies with them and assisting them financially.

Localizing parts, in particular, has also helped the firm cut costs by 2 billion won and reduce the time required for completing a purchase from six months to one so far, KOGAS officials said. 

The list of such projects includes buying products like pressure adjuster, worth 780 million won ($678,000), from small producers.

KOGAS said it aims to keep expanding such activities to make 20.5 percent, or 315 billion won, of its total purchase this year from small and medium firms.

In addition to purchasing, the firm said it plans to include more small companies in large-scale plant construction projects and their service-related business sectors in the future.

KOGAS will also offer more financial assistance to their contractors, raising the rate of advance payments to them, and listening to and resolving their difficulties.

Another focus of the firm is executing their social responsibility, it said. Its employees are regularly involved in diverse social activities including blood, book and money donations, as well as volunteer works at local welfare facilities, the firm said.

The firm has also been making diverse social contributions on a corporate-level, it said.

KOGAS has spent more than 2 billion won in 2010 to improve the heating systems and energy efficiency of low-income households, together with Community Chest of Korea. It also funded underprivileged students with scholarships.

The firm has also been making efforts to improve the country’s air and water quality, protect its cultural assets and support low-income families’ cultural activities, according to KOGAS.

The scope of the firm’s social activities is not limited to Korea, according to KOGAS.

The firm has recently invested more than 100 million won to fund the education of children in Iraq, Mongolia and Uzbekistan, where it is holding diverse resource development projects.

By Koh Young-aah (youngaah@heraldcorp.com)