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LG Electronics has decided to support its vendors with some 25 billion won ($21 million) in low-interest funds to help them compete on a more level playing field, the company said on Tuesday.
The electronics maker currently runs a 125 billion won fund with the Industrial Bank of Korea for extending financial support consisting mostly of extremely low-interest loans to suppliers and vendors.
The funds will be extended, LG Electronics said, to smaller vendors who are apparently suffering in the wake of unstable global and local economic conditions.
The loans offered via the fund are given with a low interest of between 1.9 percent to 2.4 percent. The rollover date is due in a year, but extensions are possible, LG Electronics explained.
The Seoul-based company said it will be receiving requests for the loans from its vendors starting this month. The firms will be judged based on their credit ratings and financial situations. Both LG Electronics and the Industrial Bank of Korea will participate in the deliberation to ultimately select 102 suppliers who will be receiving the loans.
LG Electronics is one of the companies here that have avidly adopted the government initiative to level out the field for smaller vendors who have been suffering from both a global economic condition and harsh treatment from the conglomerates they supply to.
Many conglomerates here have taken to more readily paying their vendors in cash, in addition to creating funds to dole out financial and R&D support to the suppliers.
The electronics maker has been particularly noted for its efforts to keep the support going to not only the bigger vendors, but the subcontractors who supply to those vendors.
As a part of such efforts, LG Electronics has dispatched experts to these suppliers to help them upgrade their productivity.
The company also has joined forces with local universities to impart their knowledge and expertise on improving productivity at all levels of manufacturing.
LG Electronics said it will continue to work on ways to help streamline and bolster the efficiency of management at both big and small vendors.
By Kim Ji-hyun (jemmie@heraldcorp.com)
The electronics maker currently runs a 125 billion won fund with the Industrial Bank of Korea for extending financial support consisting mostly of extremely low-interest loans to suppliers and vendors.
The funds will be extended, LG Electronics said, to smaller vendors who are apparently suffering in the wake of unstable global and local economic conditions.
The loans offered via the fund are given with a low interest of between 1.9 percent to 2.4 percent. The rollover date is due in a year, but extensions are possible, LG Electronics explained.
The Seoul-based company said it will be receiving requests for the loans from its vendors starting this month. The firms will be judged based on their credit ratings and financial situations. Both LG Electronics and the Industrial Bank of Korea will participate in the deliberation to ultimately select 102 suppliers who will be receiving the loans.
LG Electronics is one of the companies here that have avidly adopted the government initiative to level out the field for smaller vendors who have been suffering from both a global economic condition and harsh treatment from the conglomerates they supply to.
Many conglomerates here have taken to more readily paying their vendors in cash, in addition to creating funds to dole out financial and R&D support to the suppliers.
The electronics maker has been particularly noted for its efforts to keep the support going to not only the bigger vendors, but the subcontractors who supply to those vendors.
As a part of such efforts, LG Electronics has dispatched experts to these suppliers to help them upgrade their productivity.
The company also has joined forces with local universities to impart their knowledge and expertise on improving productivity at all levels of manufacturing.
LG Electronics said it will continue to work on ways to help streamline and bolster the efficiency of management at both big and small vendors.
By Kim Ji-hyun (jemmie@heraldcorp.com)
