Samsung promises early payments to suppliers

Samsung Group said Wednesday it plans to pay its bills worth 1.14 trillion won ($1.07 billion) early to its subcontractors ahead of one of the country’s biggest holidays.

The announcement came as the group unveiled a plan to boost domestic consumption and help workers prepare smoothly for Chuseok on Sept. 12.

“Through the measures, Samsung hopes to crank up local economy ahead of Chuseok,” said Rhee In-yong, executive vice president of Samsung communications’ team.

Under the plan, Korea’s largest conglomerate will spend an additional 49 billion won to giving out 200,000 won worth of gift certificates to all employees at about 430 smaller partners.

Samsung also allocated 15 billion won for local special products to donate to children’s homes, elderly care facilities and other social organizations across the country.

On Wednesday, the company hosted a marketplace in front of its headquarters in southern Seoul, in which employees and passers-by buy agricultural products directly from farmers. Some executives including Kim Soo-taek, chief of the group’s strategic planning unit, dropped by and purchased goods.

Samsung is the latest among large businesses that have pledged early payments to their suppliers. Hyundai Motor Group, STX Group and retailers like E-Mart and Lotte Mart announced similar plans earlier and more are expected to come.

“The decision was made to ease the burden of workers at the partner firms who might suffer from lack of funds,” a Hyundai Motor Group official said Monday.

By Shin Hyon-hee (heeshin@heraldcorp.com)