|LG Chem CEO Shin Hak-cheol, second from left, inspects a battery pack case of Dongshin Motech in Haman County, South Gyeongsang Province, Nov. 15, 2019. Courtesy of LG Chem|
LG Chem is increasing its efforts to achieve mutual growth with its subcontractors by providing a variety of support measures, the chemicals, battery materials and biotech arm of LG Group said Thursday.
The company has set five strategies to grow together with subcontractors, or "partners": pursuing fair business transactions, offering financing support, helping partner firms establish safer working environments, providing education programs to improve the abilities of employees of subcontractors and sharing information to strengthen communication.
To create a fair and transparent transaction culture, LG Chem has complied with subcontracting contract standards proposed by the Fair Trade Commission.
LG Chem created a 250 billion won ($217 million) fund to help its partners manage their finances. In 2010, the company started a 62.9 billion won low-interest loan program to help partner firms secure operating funds. LG Chem has also been offering its partners 43.2 billion won in interest-free support funding since 2019 to help them boost their research activities.
In addition, the company created a 150 billion won low-interest loan program in cooperation with state-run Korea Development Bank in 2020 to facilitate partner companies to invest more in their manufacturing facilities.
|LG Chem CEO Shin Hak-cheol, center, visits subcontractor Dongshin Motech in Haman County, South Gyeongsang Province, Nov. 15, 2019. Courtesy of LG Chem|
LG Chem has also provided 2 billion won each year to subcontractors that are unable to improve energy efficiency due to lack of funds.
From 2012 to 2019, the company diagnosed the energy consumption patterns of partner firms and discovered more than 340 ways to save power. Through these activities, LG Chem is spreading the culture of reducing greenhouse gas emissions and promoting energy management as well as reducing the energy costs of partner companies.
To help its suppliers secure sustainability, LG Chem has also provided education programs for employees of its partner firms. Those employees can attend LG Chem's Polymer Processing School to learn about polymer processing technology.
Based on these efforts, LG Chem received the highest grade in an annual mutual growth index assessed by the Korea Commission for Corporate Partnership for the fifth consecutive year since 2015.