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Samsung Group to spend 1.2 tln won on business partners

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(GlobalPost/GlobalPost)

SEOUL, June 5 (Yonhap) -- Samsung Group, the country's top conglomerate, said Wednesday that it will spend 1.2 trillion won (US$1.07 billion) over the next five years to help its business partners and subcontractors.

This year alone, Samsung, which has Samsung Electronics and Samsung Display Co. under its wing, will spend 327 billion won for the co-prosperity scheme, it said.

Under the group's plan, technology and financing support will be provided to its business partners. Also, its 11 affiliates such as Samsung Electronics will set up funds totaling 177 billion won for their business partners this year.

Samsung said it will also provide training courses to employees of its business partners.

Samsung's step is in line with the government's push to promote so-called "shared growth" between conglomerates and smaller businesses.

The voluntary move comes as President Park Geun-hye has vowed to rein in the economic dominance of family-controlled conglomerates and to make small businesses the next growth engine of Asia's fourth-largest economy. She also called for better ties between chaebol and smaller firms.

Smaller companies account for 99 percent of all enterprises and 88 percent of all employees in South Korea, though conglomerates dominate net profits and market capitalization.

Samsung's move follows similar actions by the country's major conglomerates.

LG Group, the nation's fourth-largest business group, said earlier it will award 400 billion won worth of contracts to smaller firms in what could be an apparent move to better ties with the government.

LG is also set to launch a 200-billion-won fund to be used to improve better ties with its business partners.

Hyundai Motor, the country's top automaker, is mapping out additional measures to help its business partners improve their overall results and competitiveness.

In April, Hyundai Motor said it will drastically cut inter-affiliate trades this year by awarding logistics contracts worth 480 billion won to smaller firms.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130605/samsung-group-spend-12-tln-won-business-partners