Samsung Electronics Eyes W1 Tln Fund for Contractors

Samsung Electronics will expand support for secondary and tertiary subcontractors and help primary suppliers grow as global companies.

Samsung will also directly buy major raw materials for its suppliers to resolve the problem of raw material prices not being properly reflected in the prices of their products.

In a news briefing Monday at its headquarters in southern Seoul, the company announced a seven-point plan for mutual development with suppliers.

Park Jong-seo, head of Samsung`s mutual development and cooperation center, said, “We came up with this plan after listening to our suppliers about their needs.”

Samsung reviewed its activities for mutual cooperation in June by talking to its 80 subcontractors.

The company and Industrial Bank of Korea will create a “supplier support fund” of up to 1 trillion won (842 million U.S. dollars) for secondary and tertiary suppliers. The plan will take effect in October and select the top 50 suppliers to nurture them into global companies by 2015.

A Samsung source said, “The plan is our first response to government criticism that businesses are not living up to their social expectations. By September, we will also come up with mutual development plans for the Samsung Group.”

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