LG Group has announced new measures to aid its second- and third-tier suppliers, most notably investing 200 billion won (US$178 million) to launch a fund for mutual growth.
Citing the group's spokesperson Jeong Jung-wook, The Korea Times reported Tuesday its four affiliates LG Chemical Technology, LG Display, LG Life Sciences and LG Innotek, have collaborated to create a new fund for shared growth with LG's local suppliers. The Industrial Bank of Korea (IBK) will manage the fund, it added.
The creation of the fund is aimed at helping its second- and third-tier suppliers, Jeong said, adding some 500 subcontractors in these two categories can borrow money at lower interest rates and have their loans approved within three days.
LG had launched a similar mutual growth fund worth 340 billion won (US$303 million) in September 2010 to support its top-tier subcontractors, he added.
The group will also dispatch technicians to these channel partners to help them utilize advanced technologies to reduce administrative costs, and share patents in new business areas which are relevant to their respective fields, he said.
According to the report, LG Chairman Koo Bon-moo has consistently stressed the importance of shared growth since the start of 2013. In February, for example, the chairman summoned 2,000 LG executives to a special session on fair trade with its local suppliers.