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LG Chem Vice Chairman Shin Hak-cheol (center) visits the facility of Dongshin Motech, one of the company‘s major domestic parts and equipment partners. (LG Chem) |
LG Chem Vice Chairman Shin Hak-cheol on Tuesday emphasized five inclusive growth strategies to bolster the transparency and competitiveness of its suppliers.
According to South Korea’s leading chemical company, the five principles are creating a fair trade culture; providing financial support and improving payment conditions; pursuing mutual growth through safe environments and eco-friendly business; building the capacity of suppliers; and sharing information and exchanging ideas.
To ensure fair trade with vendors, LG Chem’s subcontracts abide by the standards set by the Fair Trade Commission. Also, the company operates a self-monitoring program to voluntarily promote fair dealings.
To facilitate a healthy cash flow, LG Chem runs a fund worth 206.1 billion won ($173.5 million) for its partners. The firm created a low-interest loan program worth 62.9 billion won in 2010 and even established a free loan to promote innovative research and development activities of partners. This year, it formed an environmental, social and governance fund worth 100 billion won.
Also, LG Chem is offering financial support worth 2 billion won every year for small and mid-sized enterprises that struggle to improve energy efficiency due to lack of skilled personnel and necessary capital. From 2012 to 2020, the company ran energy diagnostics on suppliers and found 360 areas where energy can be saved. Starting this year, LG Chem is requiring a life cycle assessment from all its vendors as it looks to cut emissions in all value chains -- from procuring raw materials to throwing away waste.
To bolster the competitiveness of its suppliers, LG Chem’s R&D center and tech center conducts roughly 10,000 free analyses and tests for suppliers that lack proper test equipment.
By Kim Byung-wook (
kbw@heraldcorp.com)
