South Korea’s top steelmaker Posco said Wednesday it will invest a total of 20 billion won ($17.3 million) for the next five years to help small and midsized companies construct smart factories.

The funds will go toward the construction of new smart factories as well as consulting programs for SMEs. Each SME can benefit from 20 million won to 100 million won in subsidies to build their own smart factories.

Through consulting, Posco will also help SMEs find ways to improve manufacturing processes through Posco’s innovative production system Quick Six Sigma, the company said.

Since 2013, Posco has engaged in industrial innovation to help foster small and midsized companies. Over the past five years, it has provided a total of 19.7 billion won to the factories and carried out 1,660 improvement tasks for 876 SMEs.

The smart factory projects include Posco’s cooperation with Seoul Engineering, a steel company that supplies copper castings and industrial machinery products used in steel mill factories.

By establishing an energy usage monitoring system for electrical furnaces, the smart factory was able to reduce copper melting time by 30 minutes, improving copper melting efficiency.

“We have also reduced electricity usage by more than 20 percent compared to the past,” said Seoul Engineering CEO Lee Won-seok.

“We thank Posco for providing the necessary support for SMEs and hope that this meaningful cooperation will spread further within the industry,” Lee added.

By Cho Hyee-su (chohyeesu@heraldcorp.com)