Seoul POSCO Center exterior view./POSCO
POSCO Group is building a win-win cooperation system with the Fair Trade Commission (FTC) that encompasses suppliers down to the second and third tiers.
POSCO Group said it held a win-win cooperation agreement signing ceremony on the 16th at the POSCO Center in Gangnam-gu, Seoul, attended by about 130 people including FTC Chairman Joo Byung-ki, POSCO Holdings (005490) President Lee Ju-tae, POSCO President Lee Hee-keun, POSCO International (047050) President Lee Kye-in, and representatives of first- and second-tier suppliers.
At the event, POSCO Group pledged to implement four action items: improving payment terms, activating the win-win payment system, giving preferential treatment to first-tier suppliers that join in win-win cooperation, and providing win-win cooperation support to enhance suppliers’ competitiveness. The group also decided to solidify a win-win ecosystem in which substantive support extends beyond first-tier suppliers to second- and third-tier suppliers.
The win-win payment system is a settlement scheme that guarantees first-, second-, and third-tier suppliers cash payment on the payment date, while also allowing them to convert settlement amounts into cash at low financing costs even before the payment date.
To ensure smooth cash flow for suppliers, POSCO Group pays the full amount in cash equivalents within an average of 10 days. First- and second-tier suppliers each support payment to their lower-tier suppliers within a maximum of 30 days. The group also raises the utilization of the win-win payment system to help suppliers recover their payments. It plans to grant incentives during supplier evaluations to first-tier suppliers that sign fair trade agreements with second- and third-tier suppliers, encouraging the voluntary spread of a win-win culture.
The scope of the “benefit-sharing program,” which shares financial gains achieved through joint technology development with suppliers, will be expanded from existing first-tier suppliers to second-tier and lower suppliers.
POSCO Group expects that some 5,300 suppliers within the supply chain will benefit under this agreement.
Chairman Joo encouraged the participants, saying, “Win-win cooperation will be the foundation for POSCO Group’s continuous innovation and an investment that can elevate the entire industrial ecosystem by one level.”
President Lee responded, “We will continue to spread a transparent and fair trade culture throughout the industrial ecosystem and solidify partnerships of trust to become a reliable companion.”