LG Innotek (CEO Young-ho, Hur) signed a contract for provision of direct loans to partners at the company’s head office in Seoul on March 11.
As the first move in its strides towards co-growth for 2011, LG Innotek held a contract signing ceremony to provide direct funds designed for co-growth, which calls for lending 3.6 billion won to nine of its partners. In attendance at the ceremony were key executives, including LG Innotek CEO Young-ho, Hur and CEOs of partner companies, including NewFlex.
LG Innotek selected the nine partners with high growth potential for its various business divisions through an internal review of subcontractors by the “Committee on advancing co-growth.” The funds will be provided directly to the partners, free of interest, in the form of loans with a one-year grace period and two-year installment-based repayment.
Through the signing of the contract, LG Innotek plans to offer to the respective subcontractors direct assistance for ▲ facility investment ▲ improvement of product quality and labor productivity ▲ joint advance into markets ▲ and development of cutting-edge technologies. Notably, the company plans to push for co-growth through domestic development and production of core parts.
The provision of direct loans is a specific measure of action in the financial assistance segment of the “Treaty on c-growth and fair trade,” which LG Innotek announced last year. LG Innotek has secured and is operating some 30 billion won in funds to provide financial assistance to subcontractors.
LG Innotek provided 15 billion won in hybrid financial assistance, including a co-growth and cooperation fund, last year. In 2011, the company will provide direct and indirect financial assistance such as 4.5 billion won in direct funds, including 3.6 billion won to be provided this time, plus 10 billion won in network loans.
Additionally, LG Innotek is implementing various other assistance activities for subcontractors, including R&D, a society for research independence, management consulting, and training on capacity building.
LG Innotek’s CEO Young-ho, Hur told partner company CEOs who were attending the event, “We hope that our direct assistance funds will be used in practically implementing the funds’ purported goals, including domestic production of core parts, rather than simply in business operation, and thus help your companies to grow as our global parts and components partners.”
At the signing ceremony, the CEO of a subcontractor said, “LG Innotek’s financial assistance will directly contribute to increasing sales of the partner companies by helping improve quality and labor productivity, and to expediting domestic production of products.
