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| LG Chem Vice Chairman Shin Hak-cheol, second from left, visits the company's partner firm Dongshin Motech in Haman, South Gyeongsang Province, on Friday, Feb. 24. Courtesy of LG Chem |
LG Chem has adopted standard subcontracting agreements and four growth-sharing practices, recommended by the Fair Trade Commission, for its small partner firms to create fairer and more transparent business environments, company officials said Sunday.
Korea's largest chemical company is taking the lead in establishing a fair and transparent management system by introducing its own "fair trade self-compliance program" to appoint a manager to oversee the process, operating an education program and forming an internal supervisory system.
LG Chem is providing a total of 206.1 billion won ($156.3 million) worth of financial support as of 2023 to help its partner firms maintain a smooth management of funds.
In particular, LG Chem created a low-interest loan program called "win-win fund" worth 62.9 billion won in 2010 to support the operations of its subcontractors. In 2019, the company introduced an interest-free loan program called the "innovative growth fund" worth 43.2 billion won to support key research and development at its partners.
LG Chem is contributing every year to a 2 billion won mutual growth fund to help partner firms that seek to strengthen their capabilities but lack the budget and manpower. The chemical company also plans to provide education and consulting in the environmental, social corporate and governance (ESG) sectors as well as an evaluation system to help subcontractors improve their competitiveness in ESG management.
From 2012 to 2022, LG Chem conducted energy efficiency diagnoses on its partner firms and discovered 388 energy-saving items. It is expanding its activities in the renewable energy sector to reduce partner firms' energy costs and greenhouse gas emissions.
LG Chem is also operating various programs such as technical support and protection for its partners so that they can secure self-sustaining power in the long run and grow into global-level operations. (Advertorial)
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