LG Group will award 400 billion won (US$357 million) worth of contracts to smaller firms, to support the growth initiative spearheaded by South Korean president Park Geun-hye and her administration.
Under the plan, the group will award system integration (SI) contracts worth 230 billion won (US$206 million), advertising deals worth 100 billion won (US$895 million) and construction contracts worth the remaining amount to smaller firms, The Korea Times reported on Monday.
Within the SI sector, LG Group affiliates will directly offer 115 billion won (US$103 million) worth of business projects to local suppliers, while the remaining 115 billion (US$103 million) won will be put out to tender.
The group also decided to invest 3.2 trillion won (US$2.87 billion) to build a cutting-edge software development center in Magok, Seoul by 2020, an increase from its original 2.4 trillion won (US$2.15 billion) investment.
"We will ask the Seoul Metropolitan Government to allow us to buy more land to build a bigger complex. We will invest 800 billion won (US$716 million) more for the project by 2020 and the total research staff will be increased to 30,000 from the previous 20,000 after the complex opens," Kim Min-jeong, the group spokesperson said in the report.
The move comes as part the group's effort to support the South Korean government's policies to support a creative economy, use IT as a main tool for economic growth and ensure growth between large firms and small and medium-sized enterprises (SMEs).
"LG will use the complex to develop market-leading projects and to find out the group's next cash cows; but closely collaborating with local ventures, startups and suppliers. We will also offer internship programs to students and some of them will be offered regular jobs," Kim said.
This is not the first time LG Group announced initiatives for local suppliers. In April to aid its second and third tier suppliers, the firm invested 200 billion won (US$178 million) to launch a fund for mutual growth.
Other companies have unveiled initiatives in support of the government's plan to use IT to develop a "creative economy". Samsung last week said it will invest a total of 1.5 trillion won (US$1.34 billion) over the next 10 years to establish a new foundation for South Korea to develop patents in the next-generation technologies.