Samsung Group to Pay Suppliers Early Under New Win-Win Agreement

Samsung Group has signed a win-win agreement aimed at improving payment conditions for its partner companies. The pact, announced by the Fair Trade Commission, involves 12 Samsung affiliates and their suppliers.

Under the new terms, Samsung will pay its primary suppliers within 10 days of receiving goods, significantly earlier than the current legal limit of 60 days. The group will also maintain its principle of paying through cash-like methods and its win-win payment system, which automatically transfers funds to subcontractors and lower-tier suppliers based on agreed payment deadlines. Early payments will also be prioritized during holiday seasons.

Suppliers at the first and second tiers are also committed to reasonably managing payment deadlines for their own subcontractors, aiming for within 30 days after the end of a period. They will also strive to use cash-like payments and the win-win payment system. Samsung plans to support participating suppliers by offering preferential treatment in comprehensive supplier evaluations and expanding financial and technical assistance to second and third-tier suppliers.

Samsung Electronics' commitment to supporting second and third-tier suppliers and establishing an industrial accident fund, part of its 5 trillion won social contribution pledge announced in May, is included in this agreement. The Fair Trade Commission anticipates that approximately 6,700 partner companies will benefit from this initiative. The commission will also provide incentives, such as bonus points in fair trade agreement evaluations, to companies that faithfully implement the agreement.

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This win-win agreement will serve as a starting point for opening a virtuous cycle that allows Samsung's performance to flow smoothly to small and medium-sized partner companies.