Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
POSCO, antitrust watchdog broaden partnership for shared growth
POSCO Holdings President Lee Ju-tae, fourth from left, poses with Fair Trade Commission Chairman Ju Biung-ghi, fifth from left, during a signing ceremony for the agreement between the group and the commission on shared growth at POSCO Center in Gangnam District, Seoul, Thursday. Yonhap
By Lee Gyu-lee
POSCO Group has partnered with the Fair Trade Commission (FTC) to expand its shared growth initiatives, which support supplier financing, technology development and market access, beyond direct suppliers to include second and third-tier vendors.
The group announced that it inked an agreement with the commission on Thursday, aimed at strengthening supply chain competitiveness and promoting fair trade practices across about 5,300 partner companies.
Under the agreement, the group pledged to improve payment terms, expand the use of its shared growth payment system that guarantees cash settlement on due dates and allows suppliers to convert receivables into cash early at lower financing costs.
It also committed to providing incentives to first-tier suppliers that promote shared growth with lower-tier partners and broadening support programs to enhance supplier competitiveness.
“POSCO Group has grown by treating shared growth with its partners as a core value,” POSCO Holdings President Lee Ju-tae said during the signing ceremony.
"We will continue to foster a transparent and fair business culture across the industrial ecosystem and strengthen trust-based partnerships, serving as a reliable long-term ally for our suppliers."
The group said it will make cash-equivalent payments to its suppliers within an average of 10 days, while encouraging direct and second-tier partners to settle payments with their subcontractors within 30 days.
It will also offer evaluation incentives to direct suppliers that sign fair trade agreements with their downstream partners, encouraging voluntary adoption of shared growth practices.
POSCO Group will also expand financial, technology development and overseas market support programs for suppliers. Its profit-sharing program, which distributes financial gains from joint technology development between the group and its suppliers, will be extended to include tier-2 and smaller suppliers.
The agreement is expected to benefit approximately 5,300 suppliers across the group's supply chain.
"Shared growth partnerships are the foundation for POSCO Group's continued innovation and an investment that can lift the entire industrial ecosystem to the next level,” FTC Chairman Ju Biung-ghi said.
The group plans to incorporate the key elements of the agreement into its annual fair trade pact with suppliers, scheduled for early next year, as part of its efforts to build a more sustainable industrial ecosystem.